Advertising Technology

No, The Web Can’t Survive Without Advertising

TomHespos_200“If you’re not paying for it, you’re not the customer; you’re the product being sold.” – Someone on MetaFilter

This quote is awfully popular with the anti-advertising crowd.  You know the type.  They believe that the Internet was once successful as a non-commercial medium and it can be so again, if it weren’t for all these pesky advertising companies cluttering up the landscape.  Many of them will download ad-blocking software, block cookies or wipe them regularly, and do pretty much whatever they can to avoid being digitally advertised to.

Those who go to such lengths are typically outliers – an extremely vocal minority – and comprise such a low percentage of a typical digital community’s user base that publishers have been able to effectively ignore them for years.  But with controversies over third-party cookie blocking, the continued uptake of ad-stripping browser plugins and an increasing diversity of operating systems and browser types, a publisher or community owner might wonder whether the core of ad-accepting, engaged visitors will always continue to be there.  But that is another column for another time.

What I’d like to delve into is the oft-repeated assertion that the Internet was just fine as a non-commercial medium and that we can somehow press forward without a viable ad model.

Folks, it’s easy to set up a blog, forum, mobile app or some other presence in some deep, dark corner of the Internet and ensure its continued existence with change from your couch cushions.  However, as soon as that thing in that dark corner provides utility to a significant number of Internet users, there are costs that can quickly grow beyond what one can reasonably expect to find in the cushions.

Speaking from experience, traffic can grow to levels where a shared webhost can’t keep up with demand.  Suddenly, your $9.95/month shared hosting plan is inadequate and you need to upgrade.  Databases get too big and need to be upgraded, too.  Maybe the forum software you’re using for your community of hobby enthusiasts needs to be relicensed or moved to another platform because the original authors of the software couldn’t protect it against hackers anymore.  Or maybe you’re supporting more users of your mobile app than you ever thought possible, and you simply need to upgrade your systems.

If it scales, it costs money. Without an ad model to defray costs, you might find yourself trying to bridge a very wide gap.  Without an ad model, what’s really open to someone who wants to scale a digital presence?  You’ve got, essentially, two or three options:

1)   Paid Access.  There are various ways to implement a paywall, but the model has a tough time working for digital products that people don’t use on a near-constant basis.  People are hesitant to pay for something unless it’s providing regular utility. If you happen to be moving from a free model to a paid one, it’s likely that only a small percentage of your most engaged community members will pay to use the community.  And with the sheer number of people who will run in terror once a paywall goes up, a community can easily stagnate and die. You can allow tiered access, restricting the access of non-paying members, but even if you succeed you’ll hamper growth severely.

2)   Extended Functionality for Paid Users.  This is really just a fancy paywall, but the thinking is that you keep functionality and access the same for all your users, but offer some sort of enhanced functionality or permissions to people who will plunk down their credit card for the privilege.  This can be a risky proposition, as it puts you in the position of having to predict whether or not existing users will pay for a higher level of service or not.  If not, you may end up investing in development of Gold-level features and payment systems you might not be able to monetize.

3)   Virtual Tip Jar.  You can beg your users for contributions in order to cover costs, but there are problems associated with it.  For one, it’s tough to project whether your users will donate at all, much less donate enough to offset your costs.  How many publishers or community owners can we point to who have made this model work?  I mean, other than Jimmy Wales?

If you’ve ever had a grassroots community or publishing organization, you know that not only does advertising provide the ability to avoid angering your user base by not providing a free access model, it also plays an important role in a digital entity’s life cycle – it’s the one thing on the paid publishing continuum that lies between the free model and directly appealing to users for revenue.  In other words, it’s the training wheels many free communities and applications need in order to access the proving grounds for a paid access model.

You see those training wheels in action all over the web, from the community leader who serves ads to users until they see enough value to cough up a subscription fee, to the app developer who provides both a paid download and a free ad-supported version of the same app in order to provide utility to the widest audience possible.

Now, tell me with a straight face that digital media can survive without a viable ad model.  Picture what might happen if, every time you searched on Google, the majority of the sites behind the search results had their hand out for an access fee.  How many of those sites would continue paying for bandwidth and technology out of their own pockets, as a labor of love?

Tom Hespos is a contributor at The Makegood and Founder and Chief Media Officer at Underscore Marketing, a boutique firm that creates and manages digital marketing programs.

 

  • Jairus

    Wow. So what I’m reading is, people pay to update or upgrade their services on the web, and having them to a vast majority of people cost money that isn’t easy to find without ads. Ads is the only way to keep up as hardware gets better and spread to a broader audience.

    Is this supposed to be a red herring? Are we completely ignoring the consumer experience now, as they’ve become such a product (as you said) that all that matters is business?

    Nothing in this article speaks to how the internet was before ads and thus why they’re necessary now. All I honestly see here is complaining, and not to minimize your complaints in saying so either; however tough luck your or anyone/thing’s shit is though, ads are annoying, invasive, interrupting, careless for consumer leeches that NOBODY LIKES. REALLY: NO ONE VIEWING THEM–by their encroaching invasive dead weight nature, it is illogical to actually enjoy and want ads from the user experience.

    As the quote you started with above trickles from, selling something to someone used to be a fair exchange, where they could listen or not, and take it or not.
    That was forever ago, and then the act of advertising itself became the reward, and people became the products. This was STILL tolerable, but we have to come to a very honest appreciation here; a very practical one at that, now…

    When you see a bill-board, it’s off in the distance…
    When you walk in a mall, it’s often outside your line of vision…
    When you watch TV – which is now being skipped with PVR of course – it’s in your home, but you’re busy, got other things to do, could go use the bathroom…

    As you’ve likely guessed by now, ads really have simply encroached too far when you’re on your computer. Sure the screen is that much closer to your face, but let’s think humanely and not just physically: you’re doing a possible, and often actual PLETHORA of different things in different places on the internet, and ads are interrupting, blocking, slowing down, irritating, distracting, scrunching space of the actual content and often tactlessly overreaching, buzzing around everything you do!

    So I’ve made the user experience clear. You’ve made the business experience more so clear, at least. So what’s my point; what do I think is the verdict, then?

    My point is that the battle on ads is a COMPLETELY natural, logical and necessary one. My point is that too many websites, publishers etc. are talking and taking from a corporate perspective, and that’s not the only way the world runs.
    I don’t care about your political or financial beliefs: the world runs on human appreciation and understanding too, and as people push to forget it we’ll just loose ourselves in the COMPLETE ILLUSION that things MUST progress as they are! That we MUST fulfill the advertisers, the growing viewer base, the competition, so on and so forth people continue to endlessly blindly dive only in to being better than yesterday, comparing themselves to the charts and statistics only of yesterday!

    When in reality, it’s not always about taking a step forward or back, but all around you; not about being better than yesterday in the eyes of yesterday, but in the eyes of right now. People, publishers, websites, etc. become sell outs, but what’s the point of maintaining a better self, a better system of any kind, when all that it amounts to scratches by to see clearly to begin with.

    Just cus the internet’s a machine doesn’t mean we have to be. We don’t have to continually upgrade our considerations based solely on keeping up to current statistics, when we control the origin of the parts that make those statistics up to begin with. People forget that, mind’s will forget we even existed at all, and soullessly keep running the system.Inflating the bigger and better balloon until one of the two pops: be it the balloon, or the people it entertained.

  • Tom Hespos

    Thanks for your comments, Jairus. Just to be clear, this article was written some time ago. (June of 2013). In the time since this was written, the consumer experience has gotten much worse, with ads and their infrastructure often overwhelming desktop and mobile devices to the point where they slow to a crawl or crash.

    That said, much of what is in here is still very much valid. The piece wasn’t supposed to be about whether ads are ruining consumer experience. (They are.) It’s about whether other models have proven successful to content publishers. (They haven’t.)

    Since you mentioned the pre-advertising Internet, I can tell you that it looked nothing like the Internet today. Much of the initial non-commercial web was supported by universities, government organizations and other not-for-profit entities. They had ways of funding an Internet presence that didn’t involve advertising. But neither could they afford modern tech costs for hosting, bandwidth, applications, data storage, etc. Prior to the fourth quarter of 1994, when advertising on the Internet first made its debut, much of the World Wide Web was academic in nature – there just simply wasn’t a lot there.

    In order for it to be viable as a medium that could pay for itself, the web needed four things – a mass audience, a way to access it, some standards and – yes – advertising.

    I know because I was there. AOL, Microsoft, Netscape and a number of other companies brought the Internet to the masses. How did they afford it? Advertising. First with things like slotting fees that companies paid for premium positioning on things like home screens or in lists of pre-fab bookmarks. The W3C, WWWAC, and a bunch of others took care of the standards bit. By the end of 1994, you had commercial companies discovering the beginnings of a mass audience on the WWW and taking steps to get websites live. Retailers looked to an e-commerce model, but depended greatly on advertising, because in the pre-Google universe, the only way to drive a ton of traffic to your shopping site was to advertise heavily, both online and off. Content publishers, on the other hand, played a dangerous game of audience arbitrage, trying to get as big as they possibly could and become a content “destination” while paying less for incoming traffic than they were getting from advertising fees. The only things significantly different about back then as opposed to now are that 1) Companies paid more for advertising on a CPM basis, because there was more demand for it and a lot less supply, 2) Irrationality prevailed in setting prices because putting out press releases that had the words “World Wide Web” in them made your stock price jump 50% or more.

    Advertising gave rise to the web. Remove it now, however cumbersome it currently is, would destroy its ability to perpetuate. Of course, to your point, that doesn’t exactly address the consumer experience question, but to my mind, we need alternatives before we detonate what’s currently keeping the web alive.

    Or would you rather have every website you visit beg your for money like Jimmy Wales on Wikipedia?

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