Here's the reality - We only have 2 options to enable the value exchange of content: direct (via you moving funds to the publisher) or in-direct (monetizing through ads). It's a binary choice. It's one or the other, that's it. There's no magic 3rd option that's available (today).
Here are a few reasons why advertising is still a better model:
- It's fast. Faster than money transfer.
- It's efficient. Money is not cheap to transfer, even today.
- It's passive. No mental energy expended or decision making required.
- It's anonymous. No need for payment details or 3rd party to handle funds.
- It's secure. Again no need for payment information, there's not much ads can do. (Malware is a different problem.)
- It's accessible. Your wealth doesn't determine the amount of content you can get. Everyone can access everything equally.
This is fundamentally a question of human behavior and the common reaction is to take things for free when possible. People just do not value content that highly, if at all. You can already see the reaction to rising rates for netflix and spotify even though they provide so much value, certainly more than an equally priced cup of coffee.
Add to that the amount of willpower and decisioning it requires to judge whether a piece of content is worth it or not and it's clear that this is not a scalable system. Perhaps a "cable subscription" for the internet with time-based billing for each domain might be something that works as a direct-payment option in the future but this is a massive technical, security and privacy challenge the way things are now.
I do agree that ads have gotten out of hand recently - however this is an implementation problem. Regulation and standards and enforcement are what's needed to fix this. It has nothing to do with the ad model itself which is still the most universally scalable and viable monetization system for content.
I mean, would you say that dumping a type of toxic waste into a river is an "implementation" problem when there's no law against it?
> It's fast.
Except when ad-frameworks slow down browsing to a crawl because they heap innumerable delays on the page-load in order to "auction" the spot and maximize revenue.
> It's anonymous
Except for our big ad-networks that incorporated quita lot of fingerprinting, profiling, and even surveillance.
> It's secure
Except for how ad-networks are a vector for malware, since there's no incentive to vet content beyond maintaining their own throughput.
Ads are fast. Ad networks however are slow. Bad tech with old vendors is most of the problem. Our ads load faster than the content half the time. Sites like Washington Post, The Guardian, Ars Technica show how you can have a fast site with ads. Very solvable through technology.
Ads are definitely more anonymous than payments. Payments = credit cards or bank accounts. Guess what that means? Your name, address, age, credit history, employment, etc all perfectly accessible and tied to your identity. Profiling is used to give you more relevant ads. Someone who doesn't have children doesn't need to see diaper ads so it's a perfectly reasonable thing. I agree that sometimes it's taken too far with retargeting where you see the same ads constantly but this is a different matter. Our network focuses mostly on context of the page (tech site = tech ads) and performs just as well without any tracking (other than history of ads seen to avoid showing same ads).
The internet is a vector for malware. There absolutely is a way to vet content, but standards and enforcement is just not there right now. Ad networks dont really suffer anything when bad stuff happens so they have no incentive to do much about it. We don't even accept any 3rd party content on our network so we're far more secure than even the sites we run on.
Again, all of this is down to implementation - nothing wrong with the ad model itself.
> It's efficient
Money may not be changing hands, but a lot of information is, which is easily worth more. Leaving out these costs are yet another reason why advertisers have a reputation for dishonesty.
Also, the article specifically discussed the terrible power efficency that is always going to be associated with the extra transfer and processing associated with fetching ads. Or do you think they get to violate conservation on energy to be downloaded? If you are adding ad to a page, you are making the client pay more to see it. Offloading costs like this - while pretending it is efficient - should really be criminal.
> It's passive
Bullshit, and you know it.
The very idea of advertising is to be distracting. The arms-race we've seen over the last few decades where advertising went from simple banners, to popups, to various other dynamic rendering tricks, to the modern modal/click-through video ads - and worse - are all about not being passive. This is suck a basic concept in advertising that I have to conclude you are dissembling deliberately, or are such a "true believer" in advertising you cannot see it any other way.
Also, it takes an incredible amount of energy to ignore ads. Anybody that thinks ads don't cost any mental energy is either lying or addicted. Install an adblocker and use it 100% reliably for several months to break the addiction, and you will be shocked at the energy advertising wastes when you see it again.
> It's accessible
Except if someone is poor, they cannot afford whatever it is you are advertising. I've seen this meme a lot recently, so it's obviously a talking point the advertising indujstry is using to try to justify their drain on society. You're not fooling anybody, and this kind of appeal only makes advertisers look desperate.
--
While Terr_ already mentioned this one...
> It's secure.
You don't get to exclude malware, when advertising is the vector.
Even ignoring that, leaking tracking information makes you malware!
These are externalities. Do you get upset that articles have images in them? What about products coming in packaging that you just throw away? Isn't that gas and energy you are wasting on something you don't want?
Power efficiency of ads is really not that big of a deal.
>>> Bullshit, and you know it.
I was talking about the effort involved in choosing to pay for each pageview. Not ad formats. I believe you're conflating the two together.
>>> The very idea of advertising is to be distracting.
Actually the idea is to gain your attention. And yes, we already know this because it's quite literally what advertisers are paying for. Your attention.
>>> advertising went from simple banners, to popups, to various other dynamic rendering tricks
Yes, this is an implementation issue where ads have gotten out of hand. I agree with you that we need to return to better standards. However this doesn't mean the advertising model is broken. It's still magnitudes less effort required than having to decide to pay everytime you load a new page.
>>> to ignore ads
The point isn't to ignore ads. Advertisers are paying for your attention which pays for the content. It obviously wouldn't be a very good model if they never got the attention that they paid for. Yes it takes energy to ignore, also takes energy to choose to pay. Ads are generally easier to deal with.
>>> when advertising is the vector
Everything is a vector. Pick any object in the world. It's a vector for use by a criminal. We should focus on stopping the criminals, not banning everything.
>>> leaking tracking information makes you malware
Genuinely don't understand this. What tracking information and what is harming you?
http://www.wired.com/insights/2014/11/malvertising-is-cyberc...
Advertising is an attack vector. A security risk for the end user.
As mentioned in another comment - We also have cars and cellphones that can be used by criminals. That doesn't mean modern transportation and communication has a problem, it means that criminals will be criminals and we need better ways of dealing with them. As far as I can see, that's an implementation problem.
Here's the truth: I've been in the ad industry for a long time and there is literally 0 enforcement of anything. Lots of fraud and shady practices but no regulation and nobody to answer to. If you do get caught, change the name of the company and try again. I can guarantee that if we actually send people to jail for not vetting malware or running illegal or shady ads, this problem will pretty much go away immediately.
So the question is, who are these special few?
NYT times costs hundreds of millions to run. That's just a single publisher. Most major sites require somewhere in the 8 figures. As theory and data have shown, human behavior is not conducive to paying if you can avoid it. Unless your plan is to turn content publishers into tax-funded state-run companies, I fail to see how this could possibly work.
* Before it's mentioned: Wikipedia is perhaps the only example of donations working at scale. However, it's not really working because Wikipedia doesn't produce any content. It's also not a business. Wikimedia which is an actual business runs the wikia.com network of sites and they're all monetized through ads.
Not really. This is the same as the "stealing causes us to raise prices for other shoppers" misperception. Supply and demand set the prices of products and services. If advertisers could maximize profits by charging more they already would be. Advertisement dollars mainly just come out of profits.
Costs affect prices because if companies can't make a profit, they stop doing business. Under (near perfect) competition, prices tend to be a bit over cost. Supply and demand may be the mechanism, but costs do indeed come into it.
In many cases though, advertising lowers prices because if you can sell more products, the average cost can be lower because of economies of scale.
The cost of marketing (which includes advertising) is usually a small fraction of the overall cost of production for most products and services.
An interesting environmentalist argument would be, to ask everyone to pay more to producers of all kinds (online or otherwise), to prevent the "need" for extra resource consumption on any medium.
It "should" be an easy argument because people are clearly already paying for ads, they just don't see how. For instance, your electric bill would go down if you knew your TV would run for a half hour less every day.
I feel like there has to be a happy medium where publishers get paid some reasonable amount for their content, and readers also get to enjoy the content for a reasonable price. I think this model can coexist with the current model if the reader/content consumer doesn't mind the ads.
Individuals are the largest single source of funding, but they don't make up the majority of it, at least for NPR. Corporate sponsorship is the next biggest piece, and while it's not very intrusive, AFAIC the sponsorship messages on NPR are basically ads (very tolerable ads, but still ads).
And unfortunately, the messages they run to acknowledge corporate and foundation sponsors get more and more ad-like with each passing year.
A rationally self-interested person would not donate, because in most cases, their donation would not give them as much benefit as the cost.
The way you'd measure benefit is the value received from the site, times times the chance that their donation makes the difference between the site existing and not existing. That chance is typically a very small number.
Naive articles like this don't bother factoring in what the chance is that your donation will make a difference....in other words they ignore the fact that most people would rather be a freeloader than a sucker.
That implies "most" content has negligible value. People that offer quality content seem to have no problem getting people to donate. Just because you haven't seen this doesn't mean it doesn't exist.
> They certainly fail any game theoretic model. > A rationally self-interested person would not donate,
This isn't particularly relevant, as humans are not "rational actors". Even thought economists like to pretend otherwise, "Homo economicus" obviously doesn't actually exist in reality.
> Naive articles like this don't bother factoring in what the chance is that your donation will make a difference
Sure they did. You just don't like the results. Good content will usually be paid for, and junk content will go out of business, just like they should.
> most people would rather be a freeloader than a sucker.
Your politics is showing. Such a limited view is not helpful.
one designated spotlight, no animations
i actually pay attention to them willingly
It just improved the implementation to what it should be. Our ad network takes a similar approach and sees great results.
Regardless though, the advertising model itself is completely fine.
People always seem to forget that most of the Internet is free BECAUSE of ads.
There are websites which are actually free to end users. They don't serve ads, they might have a donation page, and largely exist because the operator simply wants to publish something. Most of the 'old web' embodies these qualities.
The assumption that the only way for websites to make money is via ads or paywalls is completely pervasive and it's simply not true. These two options are the most naive monetization strategies. My favorite counterexample is the Welcome to Nightvale Podcast. Their podcast is gratis and without ads. They make money through donations, selling swag, their book, and by performing live shows -- all which sell out extremely fast because I've been trying to get tickets recently.
The Internet is quite expensive because of ads.
Really? Not true because why? You haven't actually provided any real counterexample of a 3rd and better option.
Payment is either direct (funds transferred) or indirect (attention monetized through ads). The podcast you mentioned is just direct (donations, selling books, selling tickets, etc). In fact they seem to make money doing other things for direct payment and do the podcast for free, so it's not even a real business model but rather just a hobby.
> The Internet is quite expensive because of ads.
The internet is incredibly free, open, democratic and accessible because of ads. If you had to pay for the same amount of content consumption your monthly bill would likely be in the hundreds of dollars per month.
It's still free. You choose to access an API, whatever that may be. You don't get to decide what the format is and you don't get to decide what the content (the ads are content in the HTML) is.
> The assumption that the only way for websites to make money is via ads or paywalls is completely pervasive and it's simply not true.
You are lumping all websites together, which is unhelpful. A tumblr page vs Apple.com. How you measure profitable is not cut and dry. Google's search isn't profitable, but the reselling of data and injection of data side is. Just because you have an agenda, doesn't mean the ecosystem matches your ideal wishes. The internet itself transmits VAST (pun!) amounts of data and ads are a small portion of that compared to say...video. 300 Hours of Video Uploaded to YouTube Every Minute. How much of that are ads? It's about 2 hours. The internet is not expensive because of ads. They sit nicely on top of it, which is part of why they are tolerated.
Magazines also are affordable because of ads. Most magazines are pure trash I would never read.
I certainly don't find celebrity gossip very valuable but the vast amount of people who read and consume that content shows that it is valuable to them. Who am I to judge that? There's nothing good to come of vastly reducing the amount of content out there. More choice and options are always a good thing.
2) Ads only created part of the internet. Insisting otherwise only makes you willfully ignorant.
3) Welcome to capitalism. Websites will get to find out their true value. I look forward to a lot of worthless junk going away.
With donations, I'm offering free information, that they're really supposed to pay for, but instead of just asking for the money as an exchange, I rely on the goodness of their heart, or guilting them into feeling bad and owing me. Then they pay, but the information was already free, so they're not actually paying for it, instead they're paying for the smugness of being one of the few that actually paid what they owed, and I become the charity case in their eyes, and they are disappointed if they're not rewarded for their good deed. They expect me to do something, give them some feedback, either by personally thanking them, or posting on the website how great they are for donating. Either way, I owe them, they owe me, and it's all in this fuzzy emotional space that's outside the actual exchange of information and costs of hardware and networking.
I hate donations. I tried them once, and where I would've made $100 per day, I'd be lucky if I got $1 per day, maybe even $1 per week it was that low. Because I don't want to have a "family". I don't want charity. I refunded donations and put ads back up.
Ads are what people want. Nobody wants to pay directly, and nobody wants to be guilted and in debt. The people who donate are doing it for other purposes than paying for nothing. They want something out of it, and I don't want to give them it.
Go ahead and block ads. So what. They aren't for everyone. Then you get free information, donated to you by the people who like ads and support those who pay to advertise, and the businesses who take the risk in paying to have their name part of your site.
People love ads, even those who block them.
You're not going to change human behavior so donations instead of ads means 99% of the content out there disappears.
