It’s 2016 and in between the constant debates around encryption and the future of the open Web, we’re also discussing the future of online ads. Publishers have been putting up ads and users have been blocking them ever since we realized the Web was a fantastic place.
More recently though, the debate has been sparked by Apple adding in content blockers in iOS 9. Not only did it rejuvenate the oft-forgotten debate about invasive Internet ads, but it directly pointed out just how important ads were for the Internet giants. There is speculation Apple added in these ad blocking features to beat Google, which derives about 90% of its revenues from serving ads.
The ad-networks most websites and publishers use present a while different set of problems. Last week, an ad-network that spread ransomware through its ads affected mainstream websites like The New York Times, BBC, MSN and others operated by AOL. With ad-networks failing to test the ads they display and publishers testing every avenue available to break even, the online ad-industry seems to be in a pretty situation now. There are advocates on both sides of this debate.
Those in favor of ad-blocking preach about faster load times and reduced intrusion to their browsing history and their privacy. And this is true. Most web services, and ad-networks try to gather up as much information as they can about their users, in order to serve them ads they’d be interested in. This is a great system, if the implementation was perfect. If an ad showed showed me a product I am interested in, or even better, something I was planning to buy, then it’s great for me and the website/app that served the ad. It’s a win-win situation. But as I said, it depends on the implementation being perfect. And it never is. Most apps track everything they can: location, device state, texts sent and received, the list of apps a user has installed, sometimes, even their browsing history. The ads they serve, after gobbling up all this data is still piss-poor and uninteresting. Ads are great. If they show relevant information without making me feel like I’ve sold my soul to them.
Those in the advertising and marketing industry point out that with more users blocking ads, media companies and publishers have no reliable source of revenue. And this is true. We live in an age when most publishers are going bankrupt with declining print sales and a dearth of money to be made online. The Internet’s great power to bestow equality to every voice works against publishers, since everyone is a news source online. There is a huge amount of competition, where everyone has to fight with the same news, for the same set of eyeballs. Add to that, services like Twitter and Instagram switching to a Facebook-style algorithmic feed, and publishers have to work even harder to have their content seen.
So in such a situation, how can publishers make money without having to resort to ads. The first method that might come into most people’s minds is paywalls. A subscription model where readers pay a recurring fee to get access to some parts of the website, or even the whole website. It sounds like a great plan, in theory. After all, we pay for magazine and newspaper subscriptions in real life, right?
But the ugly truth is, paywalls don’t work unless you’re a really big publisher with lots of users and your readership is comprised of people who are actually willing to pay for your content. The content that a publisher wants readers to pay for is almost the same as content they can find on other websites.
Sure enough, there are a few websites that can be considered successful in their paywall endeavours, like The New York Times and The Information. But for small and medium publishers, the question that remains is, how do you get readers to pay for content that they can get elsewhere albeit with a few ads thrown in?
This is a puzzle that is still unsolved and I bet someone with a great solution could make it big in the near future. A slightly hacky solution that some websites have adopted is Patreon, where patrons pledge a small amount of money monthly, to support the creators of content, be it long form articles, like in the case of Wait But Why, or videos, like Kurzgesagt.
For now, Patreon helps support the creators of great content, so they don’t have to resort to having nasty ads on their websites and videos. But in the future, we might see a fully complete system that just might make ads obsolete.