I would be thrilled if online advertising became unviable as a business model. Most of what makes the web suck today (megabytes of javascript on every page; clickbait articles; outrage-driven social media; warehouses of PII waiting to be bought/sold/stolen) is because of advertising. Yes, I do want to pay for the services I use.
This. So much this. But there is hope. It seems that people are starting to realize the "price" of free content and are more and more willing to pay for it.
It could be microtransactions/in-app purchases-as-a-microtransaction, it could be subscription based models, it could be "media flat rates" (cross publication subscriptions), or something else entirely.
A lot of content, especially newspaper/magazine articles, at least here in Germany, already are paid-only, either through subscriptions or both subscriptions and alternatively microtransactions (mostly more in-depth reporting). The UK Guardian and the German taz employ voluntary payments/subscriptions with some success last I heard. US media seems to be pushing a lot more for subscriptions now ("you got free 3 articles this month")
Creators on patreon and on OnlyFans (NSFW) seem to be making good money off of subscriptions, on a smaller scale (and if they sell a product that has some demand, of course).
Relatedly the greater independence of creators from advertising would in turn mean fewer ads, which in turn means potentially more competition for the available ad space again and thus potentially higher prices.
Microtransactions are difficult legally, due to taxes.
If someone in state/country X buys something from a site in state/country Y, both X and Y may levy taxes on that transaction.
Many have thresholds for small businesses, where you don't have to collect taxes if your total business volume is below some threshold. For US states, the threshold is often of the form "more than $T total sales OR more than N sales".
With microtransactions, it is easy to exceed N sales even though you are not actually collecting much money, and then the costs of preparing and filing your quarterly sales tax reports can exceed your revenue.
Advertiser supported sites don't suffer from this problem. If someone in X visits a site in Y and Y gets payed by an advertiser for showing an ad to that person, the site does not have to worry about taxes in X, and in Y the ad revenue will just be income that gets dealt with on their income taxes.
Until we can get microtransaction-friendly cross jurisdiction sales tax reform microtransactions are going to have limited viability, at least for sites that want to operate legally.
But there there are people that intentionally bypass paywalls. Almost every article posted on HN behind a paywall has a user “neonate” who posts a paywall circumventing link. Then we collectively complain about advertising and paywalls. There is a large number of people that seem to think that all content should be free and that the people creating it are somehow a charity. I am ok with paywalls, but I don’t like to subsidize free riders. Apple News+ as a concept is a pretty good one, hopefully we can see more innovation in that sort of model.
I pay for a few paid news but I'm not fine with paywalls. It blocks non-subscriber's access, that's the problem. Obviously no one can subscribe all subscriptions, a few is max for most people. Ads is far better in this time. I wish Apple News' approach is getting popular.
Advertisers would put stupid banners on my page because they cannot do anything else but still want to advertise. Maybe they spend less because they get less return. I actually think it would increase quality of content.
Most content I consume is, like your comment, already shared by users without them receiving any compensation for it. It is usually someone who is not the content creator that profits from content on the internet.
I honestly want to see evidence for this claim. Sounds to me it makes running an ad network harder and therefore probably more expensive, but it is far from a certainty that this translates into advertisers' willingness to pay more (and pass it on to consumers).
Personally, I use ads as a signal to avoid buying certain products. If the ads are too prominent and omnipresent, it's an indication for me that I would be paying quite a premium on their marketing. But that's just me.
Let's say you're a startup trying to advertise on Google, and somebody has paid a bot network to fraudulently click on your ads. Now Google can't detect that those clicks are fraudulent, so you're billed for them.
Your channel efficiency unavoidably goes down, which increases your cost of customer acquisition because your other channels cannot pick up all of the slack.
Increasing the cost of customer acquisition is going to be bad for your business. You will either need to reduce costs (by hiring less, for example), or increase your prices.
This is a pretty status quo biased view. Maybe stronger privacy protection enables a startup search engine (or whatever) with a more privacy oriented funding method which wasn't thought viable before.
It's certainly possible new channels emerge to restore equilibrium, but I don't see Neeva (or whoever) replacing Google as a customer acquisition channel any time soon.
I think people are misconstruing me here. I'm not saying Google advertising is somehow fundamentally necessary to the economy. I'm just saying that it is straight up incorrect to think that there aren't legitimate downsides to removing their ability to police fraud.
I think there is a more charitable view of how people (I, at least) view what you are saying. There is a certainly a disadvantage to existing ad-revenue funded companies to not being able to identify their audience at the most specific possible level.
But there are also (potentially huge and beneficial) opportunity costs. We will never see alternative business models which are not viable in the existing ecosystem.
Agreed. Entrepreneurs always see opportunity in disruption, because you can always rebuild something better. Just don't @ me too hard for pointing out that the disruption is real and will affect the ecosystem (including startups!) as it is today.
There are alternatives to fight ad fraud than unqiuely tracking users everywhere.
The tracking part isn't necessary for fraud detection not even for conversation tracking. It's only necessary for "personalized ads" aka spying on users.
Products/services are typically priced according to what the market can bear. If advertising costs become cheaper for a given company, for whatever reason, who's to say this decreased expense is going to be passed down to consumers in the form of lower prices?
Living in an advertising-saturated and/or privacy-deprived world is also a "cost" borne by members of society.
> who's to say this decreased expense is going to be passed down to consumers in the form of lower prices?
Because economics. I know this intimately. I have a product we manufacture and sell on Amazon along with other channels. And if I am saving $1 on a customer acquisition, I am lowering my price one dollar because that would mean I can sell more at the same profit. Because if I try to keep that extra dollar, my competition will lower their price. Basically the cost of keeping that saved dollar is more than the gain from lowering the price a dollar. That’s how competition is supposed to work.
I know my cost of goods sold and my cost of sales down to the penny and have a pretty good idea of the elasticity curve for my product: if I lower my price by $1, I would sell x more bottles. However if I lower my price by $1 right now, I would decrease in profitability unless my costs also decreased by $1. There is a point on the curve that represents the optimal price.
It would seem that fundamental microeconomics is something not taught in many schools and that’s tragic because you get statements like “who’s to say this decreased expense is going to be passed down to consumers.” Because competition is what makes this statement silly in principle.
If consumers are desensitized to targeted advertising it could make products cheaper as they'd seek out other sources of information that don't require paying Google a hefty tax.
I don't really think that the students are the ones being "helped" when google gets paid $90 a click on student loan refinancing queries. They end up paying that $$ in the end.
