One of my main issues with the idea of advertising as the attention economy that pays for the internet is that with the VC structures that fund startups, most services don't demand profitability until they're well into (or past) the scale-up phase. So, the typical growth curve for a "free" online product seems to be:
-free to use at the beginning, no ads, "we are a startup! we do this cool thing that you will love"
-as a critical mass of users is built and the demands for profit begin, it turns into "we are a scale-up. we're sorry to do this, but we need to monetize in some token and nonintrusive way"
-eventually, the tool/service/offering becomes a critical gatekeeper (login with FB/Google/Apple; you need an email address to apply for any professional job today; event organizing gets walled behind FB accounts; can't read twitter/reddit/fb--places where legtimate--though possibly ill-informed or intentionally manipulated--discourse actually takes place), "hey, the shareholders demand growth and dividends. enjoy the ads we sold your eyeballs for."
Who ever asked for their smart TV to show ads as part of the software? No one? Why does the stock weather app on my Samsung phone have ads--it didn't always. I didn't sign up for this.
I signed up for a non-intrusive experience. The service got made into something that should you choose not to participate, you will suffer economically. And the advertising got inserted--accept the EULA and the ads, or suffer the consequences.
BTW: ads don't work nearly as well as the ad publishers want you to think they do. The measurement is manipulated by the companies who do ad measurement (I work for one of these), because if the measurement makes the ads look bad, then Google (or whoever) will just find a different ad measurement company (very 2008 bond-rating-agency dynamic going on here). The publishers, of course don't mind inflated estimates of ad effectiveness, because the more successful advertising is on their platform, the more they can sell ad space for, and the more ad space they can sell. The marketers at the advertiser don't want accurate measurement--they want to look like last year's ad campaign did well because that's how the marketers get their annual bonuses. (We report results to the publishers, and the marketers at the advertisers. We should really be reporting to the CFO, because if you're a shareholder YOU ARE LOSING VALUE BECAUSE OF THE WASTE AND FRAUD IN THE AD ECOYSTEM.
Want to learn more? Freakonomics Radio has a couple good shows on how advertising doesn't really work. Professor Kinshuk Jerath (Columbia University) has written recently about the misalignment of incentives in the advertising ecosystem (i.e., pubs don't care about inflated results; marketers don't either, and it's in the best interest of the ad measurer to look good). Professor Anna Tuchman (Northwestern University), et. al. have recently done a huge analysis of TV advertising, suggesting that its effects are an order of magnitude lower than the ad industry would have you believe.
-free to use at the beginning, no ads, "we are a startup! we do this cool thing that you will love" -as a critical mass of users is built and the demands for profit begin, it turns into "we are a scale-up. we're sorry to do this, but we need to monetize in some token and nonintrusive way" -eventually, the tool/service/offering becomes a critical gatekeeper (login with FB/Google/Apple; you need an email address to apply for any professional job today; event organizing gets walled behind FB accounts; can't read twitter/reddit/fb--places where legtimate--though possibly ill-informed or intentionally manipulated--discourse actually takes place), "hey, the shareholders demand growth and dividends. enjoy the ads we sold your eyeballs for."
Who ever asked for their smart TV to show ads as part of the software? No one? Why does the stock weather app on my Samsung phone have ads--it didn't always. I didn't sign up for this.
I signed up for a non-intrusive experience. The service got made into something that should you choose not to participate, you will suffer economically. And the advertising got inserted--accept the EULA and the ads, or suffer the consequences.
BTW: ads don't work nearly as well as the ad publishers want you to think they do. The measurement is manipulated by the companies who do ad measurement (I work for one of these), because if the measurement makes the ads look bad, then Google (or whoever) will just find a different ad measurement company (very 2008 bond-rating-agency dynamic going on here). The publishers, of course don't mind inflated estimates of ad effectiveness, because the more successful advertising is on their platform, the more they can sell ad space for, and the more ad space they can sell. The marketers at the advertiser don't want accurate measurement--they want to look like last year's ad campaign did well because that's how the marketers get their annual bonuses. (We report results to the publishers, and the marketers at the advertisers. We should really be reporting to the CFO, because if you're a shareholder YOU ARE LOSING VALUE BECAUSE OF THE WASTE AND FRAUD IN THE AD ECOYSTEM.
Want to learn more? Freakonomics Radio has a couple good shows on how advertising doesn't really work. Professor Kinshuk Jerath (Columbia University) has written recently about the misalignment of incentives in the advertising ecosystem (i.e., pubs don't care about inflated results; marketers don't either, and it's in the best interest of the ad measurer to look good). Professor Anna Tuchman (Northwestern University), et. al. have recently done a huge analysis of TV advertising, suggesting that its effects are an order of magnitude lower than the ad industry would have you believe.