
Why ads are a problem - nononoxd
http://typed.pw/a/26
======
manigandham
This is a rather shallow article with barely any real points. Talking about
all those externalities only serves to create noise rather than support any
arguments against the ad model. You can just as easily argue that images and
CSS should be removed to save even more bandwidth and processing power. Why
even go online at all actually when you can get a newspaper for a few cents?

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.

~~~
Terr_
Saying "it's just an implementation problem" understates the severity of that
problem, and I think it's a little deceptive to claim that laws, regulations,
and economic models are all "implementation" just as much as the raw code.

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.

~~~
manigandham
I believe you missed the statement where I said this is an _implementation_
problem. I recently founded an adtech company to show how these issues can be
fixed.

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.

~~~
mirimir
> 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.

So what does 15n1xkeDCGJJQAcYv17M4bPVfGqnksihLG tell you about me?

~~~
manigandham
Not much. Here's how our (modern) ad network works:

New user seen, gets assigned random UUID like ABC12345. Show an ad based on
what we know about site context.

Show ad, track that ABC12345 has seen this ad. Next time, we check your
history and know to show you a different ad. If you click on anything, we see
that as a signal that you perhaps like that category of ads.

Eventually we have a list of ads you've seen (to keep the frequency of those
ads in check) and what categories you seem interested in (based on your
clicks). Combine this with the context of the site and we can give you better
ads. We DO NOT magically get your name, address, birthday, or any other
personally identifiable information.

\--

Just for more detail: Facebook and Google are different. They are the biggest
adtech players and own about 80% of the market not only because of their size
but because of how much they know about you. Most people willingly tell both
companies everything about their lives so they have a distinct advantage. They
also know your identity across devices because of logins. These massive
companies are a much much bigger privacy issue than any independent adtech
company simply because independent players do not have access to all this
detailed 1st party information (or it's provided through rough
aggregated/statistical means).

~~~
mirimir
My point was that payments can be arbitrarily anonymous.

I'd prefer a micropayment system that was as automated as the current ad
system is. Browsing a site would trigger an initial small payment. The total
payment would be proportional to engagement, including the percentage of the
article read, time spent on the site, links followed, and so on. There'd also
be options to pay more, or to cancel payment.

I'm guessing that browsing would cost about $0.001, and that reading would
cost between $.01 and $0.10 for average news articles, blog posts, etc.
Magazine-length articles and reports would cost more. Is that about right to
match typical ad income?

~~~
manigandham
Yea I mentioned this is my first post as time-based subscriptions would be
perhaps the ideal instead of micropayments. The amounts you quoted are pretty
fair.

The most scalable payments option is typical credit cards or bank transfers,
which obviously come with identity information. Perhaps there can be an option
for bitcoin but it's definitely not ready today. No company would deal with
that at scale.

~~~
mirimir
Why not gift cards? Gyft and eGifter both accept Bitcoin. And numerous
businesses accept gift cards, including Apple and Amazon, and many chains.

~~~
manigandham
Sure, you're right, we can reframe this and just say you're buying prepaid
credit cards using cash/bitcoin. That could take care of the payment info
anonymity. Not sure of scalability for mainstream but it could work.

The remaining issues of scale/tech remain though which is still a big problem.

------
mattmaroon
"Advertisers must pay to publish ads, this results (indirectly) in higher
prices of products and services."

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.

~~~
robbrown451
I have a problem with that statement too, but for different reasons.

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.

~~~
manigandham
Exactly. Advertising usually leads to more volume and availability which has a
much greater effect in actually reducing the price of goods.

The cost of marketing (which includes advertising) is usually a small fraction
of the overall cost of production for most products and services.

------
makecheck
While online ads consume substantial resources (energy, etc.), traditional ads
did as well. Consider the cost of printed pages, or even making your TV run
for slightly longer than it otherwise would because your TV show lasts 30
minutes with ads even though it would last 22 minutes with no ads.

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.

~~~
PhilWright
I don't think this would change the number of minutes people spend watching
TV. They would simply watch one more program in the available time.

------
potatote
Is it fair to assume that the model of voluntary contribution/donation doesn't
stick with the major publishers because they could potentially make less money
by adopting such model? Is there any major content publisher which adopts
voluntary-donation-as-income model? I can see that a lot of casual reader like
me will forget (or some intentionally ignore) to "tip/donate" whenever we
read, say, the New York Times (by "casual", I mean someone like me who reads
one NYT article a day at most). For cases like mine, what about encouraging
(via a pop-up at the corner?) the site visitors to donate if they visit your
site to read a certain number of articles in a day or a week? Will that work?

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.

~~~
singron
What about public radio and TV? There are some sponsors and government
funding, but I think they are largely based on private donations.

~~~
autarch
[http://www.npr.org/about-npr/178660742/public-radio-
finances](http://www.npr.org/about-npr/178660742/public-radio-finances)

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).

~~~
robbrown451
I often find the sponsership messages less tolerable than ads, at least when
talking about public TV.

------
robbrown451
Donations rarely work. They certainly fail any game theoretic model.

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.

~~~
pdkl95
> Donations rarely work.

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.

------
nononoxd
How many of you do actually donate?

~~~
tofupup
so i donated ... this person has linux games and it is the holidays ...
perfect gift for my nerd friends ... an ad that is anti-ad ... sly fox if you
ask me.

------
Lapsa
stackoverflow.com fixed ads problem beautifully

one designated spotlight, no animations

i actually pay attention to them willingly

~~~
rpgmaker
This. Although we pay attention to them because they're mostly job postings. I
doubt most publishers can post those kind of ads effectively :)

------
js4
Ahh yes. Another "ads are bad" post.

People always seem to forget that most of the Internet is free BECAUSE of ads.

~~~
Spivak
If your websites serve ads then by definition your content isn't free. As long
as you believe that ads actually work and influence people then you are
imposing a cost on your users.

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.

~~~
manigandham
> 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.

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.

~~~
Spivak
> You haven't actually provided any real counterexample of a 3rd and better
> option.

That's because there isn't such an option -- at least not that I know of. Ads
can be added on top of pretty much any website to generate revenue independent
of the actual content of the site itself. And if the content is valuable
enough paywalls are also universal in this sense.

The '3rd option' I'm proposing is something dependent on the underlying
business and admittedly requires creativity and business sense.

> The podcast you mentioned is just direct... but rather just a hobby.

That's quite a simplification -- without the podcast they wouldn't sell books,
swag, tickets, or receive donations. You can consider their business model as
a form of direct payment but no listener is required to give them any form of
compensation and their model is much more successful than if they had simply
paywalled their content.

> The internet is incredibly free, open, democratic and accessible because of
> ads.

I disagree and think it's none of those precisely because of ads -- at least
as it applies to ad sponsored websites.

* Websites that serve ads are not free. We might have to agree to disagree on this point but as long as ads serve their intended purpose they impose a cost on every user that views them.

* Ad supported websites are not open, as every part of the ad network except for the literal content served to the client is closed and a trade secret.

* Ad supported websites are not democratic because advertisers will not want to have their brand associated with 'unsavory' topics or opinions which means that the overall content on the web is curated by small group ad networks that effectively 'bless' content on the web by providing them ad revenue.

* The accessibility of ad sponsored content is just an accidental byproduct of paying customers visiting the site. If ad networks had the tools to discriminate between people who had high disposable income then the web would no longer be accessible to the poor as it would make business sense to simply not serve them the page.

~~~
manigandham
> That's because there isn't such an option

This contradicts your original post. And it's true, there is no 3rd option.
Very smart people have spent decades looking at alternatives and yet here we
are.

> That's quite a simplification -- without the podcast they wouldn't sell
> books, swag, tickets, or receive donations.

Ok, let's reframe it then. It's a business that sells books, swag and tickets.
And the podcast is a marketing cost center. Same outcome, they're a company
that sells stuff for money. And sometimes people donate.

> Websites that serve ads are not free.

They are. The monetary sense is what we're talking about here. Not sure of
this other "cost" your describing.

> Ad supported websites are not open, as every part of the ad network except
> for the literal content served to the client is closed and a trade secret.

What? By open I mean that websites are equally available to anyone regardless
of logged in users or anonymous. This isn't a closed platform like Facebook
where you have to be logged in to use it, thus revealing your identity.

> Ad supported websites are not democratic because advertisers will not want
> to have their brand associated with 'unsavory' topics or opinions which
> means that the overall content on the web is curated by small group ad
> networks that effectively 'bless' content on the web by providing them ad
> revenue.

That's not how it works. There's a tremendous amount of advertising material
to fit virtually any vertical or environment. Sites are democratic because
it's the audience that gives them value. Give the readers what they want and
you get more readers and thus a more valuable audience to monetize. The site
doesnt get to just make up whatever content it wants, it only works if there
is a readership for it.

    
    
      > The accessibility of ad sponsored content is just an accidental byproduct of paying customers visiting the site. If ad networks had the tools to discriminate between people who had high disposable income then the web would no longer be accessible to the poor as it would make business sense to simply not serve them the page.
    

Again, this is not how it works. "poor" people are not indigent (and those
people are most likely not online that much). They still buy plenty and there
are products for every price point. Most ads are sold on an
impression/awareness basis so there's always value in showing the message to
more people. And ad networks already have access to data like household
income. Most ad campaigns use both the context of the site as well as various
data points of the user to target ads - this is why you see Rolex ads on the
WSJ but not on your local news site. Either way ads monetize all users which
in turn let's the publisher keep the site open to everyone, as in it's
accessible to everyone regardless of who you are or where you're from. That's
a good thing (whether it's a byproduct or not).

