Conceptually, advertising is good for everyone. It subsidizes the cost of several consumables for people, including entertainment. It ensures that manufacturers and retailers stay in business and remain profitable. It also acts as a catalyst for new businesses.

Historically, advertising has been a marketing function not held to the same Return on Investment (ROI) accountability as many other business functions for a myriad of reasons, two of which are:

• Mediums of communication were rudimentary and incapable for the most part, or monitoring was rendered inefficient by the cost of doing so.

• Whatever efforts were made, had satisfactory results.

This isn’t the case anymore. With the advent of mobile internet, commoditization of bandwidth, permeation of data-capable cellphones and rapid advances in user interface and usability, it is now easier and cheaper than ever before to measure and monitor consumer responses to communication.

With this increased mobility and a culture of increasing distraction, vying for the consumer’s attention is a fairly arduous task. There aren’t more people but there are more customers. To elaborate, more people experiment with more brands, but these are time-deprived, price-sensitive customers with access to more information, hence more awareness, and the resulting worry of attrition for brands.

Facebook, Twitter, Google+, Youtube, Foursquare, Pinterest, Instagram, Tumblr, Newsletters, Mobile Apps (iOS, Android, Windows Phone), the regular search engine listings (Google, Bing etc) plus industry-specific, third-party media monitoring like Yelp, UrbanSpoon, search-engine reviews etc.; all point to a fragmented market for consumers.

Brands have to incur a substantial amount of operating expenditure and allocate significant resources to try and keep up. For manufacturers and retailers, the problems are further compounded as internet transactions create complex issues spanning the entire business spectrum including supply-chain, retail channels, real estate, sales and human resources.

Internally, positions and titles, like ‘Social Media Manager’, are being created. Externally, specialized digital agencies and ‘new media marketing’ are becoming commonplace. Yet despite all this, a dichotomy exists between the efforts and the results because the offline world cannot seamlessly integrate with the online world. Ironically when things should have gotten a lot better, they’ve gotten worse because basic hurdles like taxation, licensing and privacy have not been overcome.

Large brands in the retail sector are going out of business. The establishment (brick-and-mortar businesses of yesteryear), are lobbying the government to impose the same sales tax on internet sales as conventional retail stores have to endure. The adoption of this has varied by state (in the US) and largely, by country.

On both levels, it creates another layer of fragmentation. Licensing and content deals are another detriment creating substantial disparity across countries and regions. Pandora, an internet radio service, is not available outside the US while Deezer of France is. Pandora’s veteran CEO Joe Kennedy just resigned following another quarterly loss. Deezer just scored $130 million dollars in 4th round funding.

There are many reasons why so many social media channels have sprouted up.

For one, the tech industry has been very lucrative in the past 5 years or so; but more importantly, no one has been able to solve the problem of unifying communication efforts interactively without running into major privacy-related issues.

In the western world, this presents a colossal problem.

Target, a large consumer goods store, recently shocked a family when their purchase-activity monitoring determined a young girl (in their household) was pregnant before the family knew. The issue came to light because the family started receiving advertising material targeted at expecting mothers and new parents.

Issues like these escalate when consumers start to fight back, as speculated in the alleged deterioration of Instagram’s user base after they changed their Terms of Service to accommodate advertising, or as evidenced in the case of Angel Fraley vs. Facebook Inc. for the unlawful use of names, profile pictures, photographs and identities to advertise or sell products without the consent of users. There are many other, similar instances like this.

Advertising is also at odds with the user experience of most social media channels especially since none of them address the consumer’s potential commercial interests initially.

They start with no clear monetization strategy only looking to gain traction in the form of a significant customer base - an undertaking solely aimed at raising funding - and then try to interject advertisements when the money starts to run out. This is not too dissimilar from the conventional advertising model which aims to insert suggestions into the consumer’s mind via borrowed interest of some kind.

As firms now have the ability to measure efficiently and economically, the restraint is no longer the technology, but the methodology. All of this spells trouble for the future. The size of the pie is not increasing proportionately, and each slice is costing the advertisers more to acquire. It doesn’t bode well.