Why didn't social media kill advertising?

One of the more unfortunate things about the economic downturn's timing is that it has come just as the media industry is going though a radical transformation (some would say amputation) at the hands of digital technology. That means it's really hard to figure out where the damage is coming from. How much of global adspend's 0.2 per cent drop last year was economic hardship, and how much was structural change? And how can people in the business of making and selling media really make decisions until they know?

Behind these questions is a nagging, nasty little doubt: As consumers become smarter and more empowered, won't advertising become increasingly meaningless to them?

The hard truth behind much of digital advertising is that, when you can actually measure how many people click on your ad, you find out that a shockingly small number actually do.  If newspapers had to measure how many people actually read and absorbed their ads, they'd be doomed. Advertising -- answers to questions that nobody asked -- is noise, and the human brain is really good at filtering out noise.

People in the advertising industry know this of course, and fret about it a lot. But there is generally a belief within the industry, in my experience, that brands can override this noise filter by operating cleverly within the social media sphere.

But in Jaron Lanier's recent manifesto against our culture's increasing reverence for this sphere, You Are Not A Gadget, Lanier questions the assumptions that most of us make about the unstoppable march of all things cloud-ward. He begins by asking a question I've always wondered: Why didn't social media kill advertising? His answer, essentially, is that the crowd is not as wise as we have been trained to think: