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None of these web monetization efforts address the fact that the pool of [all consumers' discretionary income they'd be willing to spend] is likely a small frac

None of these web monetization efforts address the fact that the pool of [all consumers' discretionary income they'd be willing to spend] is likely a small fraction of the size of [all commercial companies' marketing budgets]. No matter how much you reduce the friction for having people make small tips to websites, there's just significantly less money to go around, so it can never replace advertising revenue. The only way that would change is if online advertising went away overnight, and instead of companies redirecting that to other forms of advertising, the prices of all consumer goods went down so it stayed in our collective pockets.

Retric 7y ago
Alternatively if advertising became significantly less effective companies would spend less money on it. That's the upside of Ad-blocking which could theoretically make a huge impact.
- manigandham 7y ago
  Some banners ads are not all of advertising. You’re affected by numerous channels and mediums that would pick up the slack (and already have) from adblocking on the web.
  - danShumway 7y ago
    Does that matter? If advertising moves off of the web onto other channels and mediums, then necessarily the economics of the web would still change, right? Taking revenue away from a single medium will still alter the economics of that medium. Mozilla isn't trying to change the economics of the entire market, they're trying to change the economics of specifically web content.
    - manigandham 7y ago
      Sure, if that actually happened, but the comment was that ad blocking could do it. In reality, ad-blocking is already priced in and slowly being recovered. All it did was create a new addressable segment of tech-savvy/ad-resistant consumers. The slack is now recovered in first-party walled-garden platforms, native advertising, "influencer" and other underground techniques.
- adventured 7y ago
  > Alternatively if advertising became significantly less effective companies would spend less money on it. What's the strategy for making advertising on Google and Facebook (+Instagram) - where the majority of all online advertising outside of China occurs - significantly less effective? Google controls search, Android, Chrome and the Android app store (along with of course YouTube, Google Maps and Gmail, three other giant services). Facebook has its own massive walled off kingdom that exists nearly entirely in apps where they can heavily control ad blocking. Google nearly doubled its sales in three fiscal years, from $74b to $136b. Something that big doubling in that span of time, is extraordinary. They'll probably hit near $160b in sales for 2019. I'll take the bet that a giant that large, entirely dependent on advertising, will continue to figure out how to insulate itself from ad blocking by controlling the territory around it. Your premise will always be a non-starter so long as the ad giants control their own sprawling acreage (which they will fight to the death to retain, because it is life or death to them). The ad giants have made sure to control their own destiny, they saw the ad block threat plainly a decade ago or more and moved to stay out in front of it.
  - ignoramous 7y ago
    > Facebook has its own massive walled off kingdom that exists nearly entirely in apps where they can heavily control ad blocking. True, hence the rise of DNS based content blocking like pi-hole. Sure, it is trivial for apps to workaround it by using a custom DoH impl themselves, it hasn't been done yet. Another possibility is to patch the apps, ref YoutubeVanced Yet another possibility is to run an app within a user-land emulator on the device and block content and deny requests. See: VirtualApp
- kjeetgill 7y ago
  I'm not sure where you got this idea. Ad-blocking might hurt in some future with hypothetically high enough percentages of traffic. Right now they make ads more effective (marginally). By self selection, a population with relatively low click-rates has removed themselves from having any money spent on them. This helps Google and Advertisers since right now, the volume of available impressions is plenty high, the name of the game is targeting better. If anything, ad blockers just hurt select publishers who can potentially see a large volume of their potential ad traffic blocked.
  - lonelappde 7y ago
    Advertisers converge toward pay per conversion on average, so removing non-converting traffic doesn't affect spend or payouts.
    - Retric 7y ago
      It’s unlike that add blockers are exclusively used by people who are completely unaffected by advertising.
  - danShumway 7y ago
    This sounds completely reasonable to me, and I don't know where it's wrong, but it doesn't square with my experience and I think it's wrong. If this were true, nobody would be getting mad about ad blockers. But both advertisers and publishers (big and small) regularly complain about ad blockers, and even with a relatively small portion of users installing a blocker, multiple journalism sites have started adding paywalls. This paranoia isn't restricted to small sites either -- Google's even listed ad blockers as a potential revenue problem in investor disclosures. A couple of potential causes: maybe it's that impressions actually do matter to revenue in some cases and we haven't completely moved over to conversions yet, or maybe it's that advertising increases consumer spending even without direct conversion rates, or that most publishers are engaged in fraud and ad-blockers make it harder to do that. It might even just be that publishers/advertisers are all stupid and haven't realized that ad blockers don't matter, but I think that's unlikely. What seems plausible to me is that most of the people who block ads are not as immune to advertising as they claim. If they didn't block ads, they would occasionally click on an ad and provide a conversion. I would not be surprised to see that exposure to advertising increased overall spending, and didn't just redirect it to specific companies. I could be wrong though, maybe it's something else. I'd be interested to see research on that kind of thing. Regardless, it is very difficult for me to square the world you describe with a world where a huge fraction of news sites I visit are including banners that tell people to whitelist ads, or anti-adblocking technology outright, or are just giving up and switching to subscription models. I can't think of an explanation for that other than, "ad blockers decrease revenue", and I think that having an explanation for that behavior is a prerequisite to making a believable claim that ad blockers aren't hurting revenue right now. I mean, Google's not dumb. They would not have wasted time on the acceptable ads initiative if they didn't feel like they needed to.
- paulie_a 7y ago
  Or make the demographic info useless by intentionally clicking on ads at random costing them money.
devoply 7y ago
The web was fine without these commercial companies. Not like their content added a ton of value to the web. The news is mostly propaganda anyhow, belonging to various wealthy parties that want people to pay for their propaganda... If they funded it completely out of pocket, that would be a more honest approach to these "businesses". The other companies like FB, they took bunch of content that belonged to users that users had tools to publish for free and willingly put them in silos. There is maybe 1% of content that needs saving. The rest of it is the same sort of drivel that you get from tabloids and I say making that stuff economic non-viable is a good thing. The elites though care about making it work because otherwise the democratic media is "fake news", meaning news heavily slanted to what people want to believe rather than what they are told to believe. If you want that, then they should pay for it. Not the people through taxes as Bernie is proposing... or this scheme. Other than that we have good models like BBC or PBS on how to do independent government and publically funded programming. In fact if we re-engineered the web so that there was no data sharing between various systems on the frontend, something like everything has to be served from the same canonical domain, and put it in law that you could not share data between various private companies on the backend without heavy regulation and oversight that would be a better web. I mean prism is already sharing all this data, why don't we put controls on that?
- potta_coffee 7y ago
  The web was hands-down better when most content was made by hobbyists without a profit motive. I used to be able to spend countless hours online. Now it's rare for me to stumble across anything worth looking at. Granted, it's easier to search for and find specific information.
  - ivanhoe 7y ago
    Totally, just like so many bands were better young, clubs, beaches and restaurants better before they got popular, etc. Unfortunately it's just something that happens when things get mainstream, you can't reverse the process.
- xchaotic 7y ago
  You mean like censorship? Who gets to decide? Or do we continue to upvote like we do now?
tlb 7y ago
> the pool of [all consumers' discretionary income] is likely a small fraction of the pool of [all commercial companies' marketing budgets]. "Discretionary income" is a short-term idea, defined as [income - cost to maintain current lifestyle]. Over longer periods, lifestyles expand to fit current income and the idea is meaningless. For instance, when cars were new, people could only buy them if they had a large chunk of discretionary income to spend on them. But now, most middle-class people own a car that costs more than their discretionary income. So discretionary income isn't a cap on what people can spend in the long term.
- weberc2 7y ago
  Discretionary income is measured in dollars/time, cars are valued in dollars. That’s relevant because cars are affordable to middle class Americans because of _financing_ (also because of mass production). Your car payment deducts from your discretionary spending while web advertising does not—without web advertising you would need to subscribe to the websites and services you consume and that would come from your discretionary dollars. Whatever your views on the matter, getting rid of advertising isn’t going to come for free.
robbrown451 7y ago
Does it say somewhere it is tip based? It seems like there are a ton of things that can be done to make it work better than where it is totally based on "small tips."
AndrewKemendo 7y ago
If online advertising went away overnight I'd extend that to all advertising and I think we might be out of this mess permanently. It seems like an insane concept, because advertising is a part of modern life, but I think it's the only way to effectively kill the surveillance/influence peddling hydra. Otherwise, all these efforts just redirect ad dollars to other forms of systems of influence which may be similarly as invasive.
- tqi 7y ago
  What counts as advertising?
  - AndrewKemendo 7y ago
    This is the same as saying "Define Pornography." You're asking for a bulletproof formula that doesn't exist. That doesn't mean we can't take a pretty good bite out of it. How about this: Any action taken by an individual or organization with the intent of influencing another individual to execute a commercial transaction. No billboards, TV commercials, newspaper advertisements, hyperbolic statements about products. I'm sure some wacky new loophole would be found, but it would be just that, some wacky loophole, not a massive trillion dollar industry built around manipulation.
    - cameronbrown 7y ago
      > Any action taken by an individual or organization with the intent of influencing another individual to execute a commercial transaction. That definition pretty much boils down to every interaction between businesses and individuals, ever. Any kind of negotiating or sales or communication..
      - AndrewKemendo 7y ago
        Correct. Like I said, it's pervasive to the extent that we just assume it's the only way it could be, but it's behind every terrible thing. I know this first hand, I built these systems. The end state is to know and predict everything you do, and then sell you something about it. Whether its a product or an experience or a feeling. That's where it all leads - you lose your agency. Getting rid of online marketing or nudging it one direction or the other won't really change it. You can ban it online outright, but it will persist in another form. Our entire world economy is based on different groups vying for your attention to monetize, to the point that as we go further, nothing is not monetizable. It's the Truman show, but everyone is Truman.
gumby 7y ago
> the fact that the pool of [all consumers' discretionary income they'd be willing to spend] is likely a small fraction of the size of [all commercial companies' marketing budgets]. I don't understand this statement. The companies marketing to people with discretionary income presumably get their revenues from that discretionary income. So mathematically their marketing budget would have to be smaller than the revenue from these people.
- savanaly 7y ago
  By [all consumers' discretionary income they'd be willing to spend] I think the parent meant [all consumers' discretionary income they'd be willing to spend on web content] which is obviously a subset of all their discretionary income. Marketers are peddling tangible useful items, and people will pay a lot more for that than for the ability to read given words on the internet.
- dangrossman 7y ago
  > presumably get their revenues from that discretionary income This is where you made a mistake. Their revenues comes from spending on necessities, not from discretionary income. Proctor & Gamble's $7 billion a year in advertising is coming from our buying soap and laundry detergent and toilet paper, not what you have left over for movie tickets. The $30 billion a year in medical marketing is coming from insulin and blood pressure pills, not your Netflix subscription. Most consumer spending is on necessities (food, housing, car payment, health/auto/home insurance, mortgage interest, fuel, etc) and those companies do the bulk of the advertising. People cannot choose to spend that money tipping websites instead unless they stop eating, stop taking medication, etc.
  - austhrow743 7y ago
    I don't think that distinction is precise enough for this. Sure soap is a necessity, but if you buy some premium fancy soap from P&G that had a lot of marketing budget contributing to its high cost rather than the supermarket brand plain soap, then plenty of that soap money was discretionary.
kbuchanan 7y ago
Adding to this, in the same way that privacy specialists struggle to convince the public of the supreme importance of security and privacy, it's difficult for superusers to appreciate the general public's feelings about the trade-offs of advertising—in other words, the general public might never care. (Mozilla's campaign is a form of activism by superusers, for superusers.)
bill_rr 7y ago
That first sentence took me a little while to wrap my head around and I don't think it's true or logical. In other words, even if it was true, I don't see why it matters. I'm building a company that plans to charge people to read things. The reading experience, without ads, is superior. It's worth paying for. That means that an ad free future is possible.
- ribosometronome 7y ago
  >It's worth paying for. Given the current state of the web and the struggle that many media companies are having, I don't think we can take this for granted today. Fingers crossed that you and experiences like Mozilla's proposed can change this.
- SQueeeeeL 7y ago
  You may think it's worth paying for, but your average consume will not. It makes sense from a consumer point of view, how am I to know if this "superior" experience is worth my money if I haven't tried it. How do I know it will stay that way, lots of magazines and newspapers quality tanked after they got high subscription numbers.
  - awad 7y ago
    Forget the average consumer...it's pretty much guaranteed there will be an outline.com link posted on any paywalled article on HN (along with the usual paywall complaint) and this crowd seems to fancy itself above the average consumer.
  - sebastos 7y ago
    "Did you see that new Thai joint opened up down the street? I heard it was pretty good. Want to try it out?" "And just how are we to know for _sure_ that this trumped up restaurant is truly superior?" In other words, this is how capitalism works. Businesses and vendors make value propositions, then people take chances on them. It works for every single other class of good, but for some reason the big brains that run the internet can't wrap their head around how it would work for them. Some people have understood this, and they're making a killing from it. For instance, which do you watch more of, HBO, Hulu, Prime and Netflix or broadcast TV? Tons and tons of people are happy to shell out cash for products they consider worth it. Newspapers and magazines have tried to convince us that these asshole millenials refuse to pay for things anymore, but what they mean is they refuse to pay for shitty things. They're actually perfectly happy to OVERpay for things they like. It just turns out newspapers and magazines aren't, you know, worth that much.
hutzlibu 7y ago
Why does it not adress it? It is also about changing the mindset of people. Make it easier -> make it more common to voluntarily pay for thing you value -> more projects are financed that way -> more people see it is a way to make a living -> better content -> more people willing to pay, especially seeing the difference to normal ad madness
- dangrossman 7y ago
  Nothing in that feedback loop will allow people to spend money they don't have. A big chunk of the money you spend on groceries, car payments, insurance, medication, etc is going into those companies' marketing budgets, and that ends up as the ad revenue that finances the web today. You don't have that money to give to website owners directly instead, as you've already spent it on those goods.
  - hutzlibu 7y ago
    Marketing makes people buy plenty of things they don't really need nor want. If people choose not to be exposed to tailored ads so much, they would have this money to spend for other things, like paying directly to support what thes want and not the long route indirectly and ineffectivly via ads.
    - dangrossman 7y ago
      Most marketing is for necessities, to steer which brand you decide to buy, not to make you buy a category of product you wouldn't buy otherwise. You need soap, they just want it to be Dawn soap. You need laundry detergent, they just want it to be Tide detergent. Etc etc. You're not going to stop buying food, soap, medication, gas, etc so that you can direct that money to tipping websites instead.
sebastos 7y ago
This kind of seems like a troubling insight at first glance, but it doesn't pass basic sanity checks imo. You could make the same exact argument about any other type of industry. Watch: >The [pool of discretionary income people have to spend on books] is a small fraction of [all commercial companies' marketing budgets], therefore it will always be more profitable to run free bookstores that try to make money by putting ads inside the dustjackets and all along the shelves. But this obviously isn't true - Barnes and Noble is a thing. Or you could even consider Kindles and the ebook market examples of how this isn't true. It can be far _superior_ in terms of revenue to offer a product that people pay for directly, as opposed to baiting them into a space with ads in it. I think the mistake came in when you compared all of the marketing budgets combined, (call it M), with all of the discretionary income combined, (D), and took it as axiomatic that D << M. But... how could that possibly be true? Most companies will not be operating at a loss, which means their annual marketing budget will be some fraction of their gross revenue. From what I can tell from some googling, at least ~60% of that revenue, averaging over all corporations, is coming directly from... consumers' pocketbooks. Some more googling tells me that marketing spend from US companies was ~$200 billion in 2018. US consumers spent $14 trillion. So the whole premise strikes me as questionable. Am I missing something?
- cameronbrown 7y ago
  Your argument breaks down when you consider the thing that allows newspaper/web ads to be profitable is the cost of delivery effectively being reduced to zero, whereas a book still has massive printing costs that cannot be scaled as well (thousands of the same books vs. millions of the same newspapers/page views)
  - sebastos 7y ago
    B-b-but what about ebooks?
    - deleted 7y ago
      [deleted]
    - 7y ago
mirimir 7y ago
That may be true. But I have no clue where those marketing expenditures go. I do recall reading about major firms realizing that most of their marketing expenditures more or less accomplished nothing. From a bottom-up perspective, I've read that ad income is typically on the order of $0.01-$0.10 per page view. As a more or less middle-class American, I'd be willing to pay that. Or at least, I would if ad blockers stopped working. And while that wouldn't be affordable for most people worldwide, I'm sure that there's some way to normalize by user geolocation. In fact, I wouldn't be surprised if ad payments aren't already normalized by user geolocation.
- eitland 7y ago
  My thoughts as well. Between GDPR making current ad models harder to pull off and more risky and the fact that ads are getting less effective I think I might see an advertising bubble: Here are my thoughts, comments on why this is wrong are welcome: the market for online ads seems to have been growing more than consumers disposable income for two decades. Much of that might have come from cannibalizing other forms of advertising, but sooner or later it can't grow anymore as a new equilibrium has been reached between TV ads and online ads and consumers don't have more money to spend anyway. I remember an old blog post from Google or something showing a whiteboard with crazy thoughts: what if we could have a mirror behind the earth to reflect sunlight and make the day longer? Then people could spend more time searching => more ad impressions => more revenue. I feel we are at that point now, only consumers have enough time to browse, they just can't buy more than they already do (and some markets might be even beyond that point, fueled by credit card debt etc.)
  - mirimir 7y ago
    I've argued this point before, and have hoped for comments from people who run ad-supported blogs. Or manage larger commercial sites. Just to see if my estimate low-balls ad income. But no ... I do believe that we're in an ad bubble. For one thing, I've read that it's hard to measure effectiveness. You can look at revenue vs ad spending. But so many other factors affect revenue. Some you have measures for, such as how the economy's doing. But for others there's no public data. Such as ad spending by competitors. You can measure that directly, or buy data from firms that do. I gather that's a key use for VPN services with residential IP blocks. And then there's the fact that you're typically running multiple ad campaigns. So it may not be obvious which of them actually increased revenue. Bottom line, I suspect that firms have been throwing money at online advertising. Either blindly, or seduced by bullshit from ad management firms. And so it's entirely possible that total ad spending is greater than users' discretionary income. But if that disappeared, and was replaced by user micropayments, I doubt that all sites would be impacted equally. HN and Wilders wouldn't be impacted at all, for example, because they don't run "ads" per se. And popular sites generally could probably earn as much as they do now from ads. At least, if their paywalls couldn't be gamed. So is there anything that would disappear that's valuable? I can't imagine that anyone would miss ad-supported link farms, for example.
PeterStuer 7y ago
I do not agree with your premise. The amounts that companies make of blatantly selling out your data to be abused is often much lower than I would be willing to pay. I pay for YouTube Premium primarily to get rid of the adds. I stopped using Facebook in 2017, but if I used it I would gladly pay the single digit dollars per year they seemed to make of me. Now where i do agree is that even with people paying for content and services directly, advertizing would creep back in, because it would always be a potential supplementary revenue stream just sitting there tempting the content or service providers. This is where we need strong regulation such as the GDPR enforced to stem this general race to the bottom.
- dangrossman 7y ago
  Facebook's ad revenue for 2018 was $55.8 billion from 2.7 billion MAU. That means each user is worth $20.67 per year. In reality, not all users are worth the same, and as an English speaker, you're probably worth at least double the average. So, figure $40 a year to remove ads from Facebook, not single digits. Now what about the other 10,000 websites you touch each month?
  - PeterStuer 7y ago
    About $50/month for a family plan should be fine for a completely add free internet. How that fee is distributed across the different sites I visit is an administrative issue.
NicoJuicy 7y ago
That's not exactly how it works. I don't price my products depending on marketing. Marketing is a % of my profit I'm willing to spend, to try new things.
- dangrossman 7y ago
  That's not how it works for most businesses.
simula67 7y ago
> [all consumers' discretionary income they'd be willing to spend] is likely a small fraction of the size of [all commercial companies' marketing budgets] Assuming you meant all spending, this cannot be true, because all marketing budgets are paid out of people's spending. You are paying for advertisements, they are included in prices of goods and services you buy.
- Freak_NL 7y ago
  It can be true if people spend more than they think they are willing to spend on content via advertisements. That is, people underestimate how much advertisements affect them. And of course there are people who simply block advertisements. Either that, or advertisers overestimate the impact of online advertising.
- buboard 7y ago
  marketing pays itself to an extent through increased revenue and scale. Historically, companies have spent more or less the same percentage of their revenue on marketing. It seems they find an equilibrium
- dangrossman 7y ago
  I can't forego buying food and housing and medication so that I can reallocate "what I pay for advertisements" to tipping websites. If there's less advertising inventory available on websites, P&G is going to reallocate that spend to some other form of advertising, they're not going to drop the price of the shampoo and toilet paper I buy from them. The money's not in my pocket to spend, it's in theirs.
  - C4stor 7y ago
    You can reallocate. Only top tier brands use ads, and the price of the advertising is part of the premium you pay for the brand name. For a lot of products, there's no functional difference with their cheaper alternatives. So, this brand premium is in fact discretionary spending that you could reallocate.
    - 7y ago
dalbasal 7y ago
You are assuming that any effort will be trying to break the advertising paradigm in favour of a direct payment one. The article/grant doesn't seem to be about that. Whatever the business model, this seems to be more about breaking platform capture than breaking business model. The alphabook platforms particularly. Ultimately it's a big field. We have direct payment models (netflix, spotify, iTunes, kindle...), ad-suported models and quite a lot of online content production where monetisation is secondary to distribution. I think it's a good time for this initiative. YouTubers (for example) with millions viewers can (a) make very little money (b) chaffe at various policies, either money or content related and (c) generally have far less power vis-a-vis alphabook than their audience size implies. Meanwhile, podcasts, a much freer medium, is both more profitable and quality oriented because of the platform openness. ...open doesn't mean no advertising. The main thing it means is decentralised, or centered around content creators. This a a good idea. YouTube is no longer necessary. If it suddenly disappeared, online video content would quickly recover fully around alternatives. They contribute the least value while extracting the most.
- Eridrus 7y ago
  > Meanwhile, podcasts, a much freer medium, is both more profitable and quality oriented because of the platform openness. I don't think this is true. Podcasts are more profitable since their production costs are lower, their audience skews wealthy and its inherently easier to make longer audio content, so it's possible to put more ads in. Nothing is stopping YouTubers from not using the default ads and getting their own sponsors.

Retric 7y ago

Alternatively if advertising became significantly less effective companies would spend less money on it. That's the upside of Ad-blocking which could theoretically make a huge impact.

manigandham 7y ago
Some banners ads are not all of advertising. You’re affected by numerous channels and mediums that would pick up the slack (and already have) from adblocking on the web.
- danShumway 7y ago
  Does that matter? If advertising moves off of the web onto other channels and mediums, then necessarily the economics of the web would still change, right? Taking revenue away from a single medium will still alter the economics of that medium. Mozilla isn't trying to change the economics of the entire market, they're trying to change the economics of specifically web content.
  - manigandham 7y ago
    Sure, if that actually happened, but the comment was that ad blocking could do it. In reality, ad-blocking is already priced in and slowly being recovered. All it did was create a new addressable segment of tech-savvy/ad-resistant consumers. The slack is now recovered in first-party walled-garden platforms, native advertising, "influencer" and other underground techniques.
adventured 7y ago
> Alternatively if advertising became significantly less effective companies would spend less money on it. What's the strategy for making advertising on Google and Facebook (+Instagram) - where the majority of all online advertising outside of China occurs - significantly less effective? Google controls search, Android, Chrome and the Android app store (along with of course YouTube, Google Maps and Gmail, three other giant services). Facebook has its own massive walled off kingdom that exists nearly entirely in apps where they can heavily control ad blocking. Google nearly doubled its sales in three fiscal years, from $74b to $136b. Something that big doubling in that span of time, is extraordinary. They'll probably hit near $160b in sales for 2019. I'll take the bet that a giant that large, entirely dependent on advertising, will continue to figure out how to insulate itself from ad blocking by controlling the territory around it. Your premise will always be a non-starter so long as the ad giants control their own sprawling acreage (which they will fight to the death to retain, because it is life or death to them). The ad giants have made sure to control their own destiny, they saw the ad block threat plainly a decade ago or more and moved to stay out in front of it.
- ignoramous 7y ago
  > Facebook has its own massive walled off kingdom that exists nearly entirely in apps where they can heavily control ad blocking. True, hence the rise of DNS based content blocking like pi-hole. Sure, it is trivial for apps to workaround it by using a custom DoH impl themselves, it hasn't been done yet. Another possibility is to patch the apps, ref YoutubeVanced Yet another possibility is to run an app within a user-land emulator on the device and block content and deny requests. See: VirtualApp
kjeetgill 7y ago
I'm not sure where you got this idea. Ad-blocking might hurt in some future with hypothetically high enough percentages of traffic. Right now they make ads more effective (marginally). By self selection, a population with relatively low click-rates has removed themselves from having any money spent on them. This helps Google and Advertisers since right now, the volume of available impressions is plenty high, the name of the game is targeting better. If anything, ad blockers just hurt select publishers who can potentially see a large volume of their potential ad traffic blocked.
- lonelappde 7y ago
  Advertisers converge toward pay per conversion on average, so removing non-converting traffic doesn't affect spend or payouts.
  - Retric 7y ago
    It’s unlike that add blockers are exclusively used by people who are completely unaffected by advertising.
- danShumway 7y ago
  This sounds completely reasonable to me, and I don't know where it's wrong, but it doesn't square with my experience and I think it's wrong. If this were true, nobody would be getting mad about ad blockers. But both advertisers and publishers (big and small) regularly complain about ad blockers, and even with a relatively small portion of users installing a blocker, multiple journalism sites have started adding paywalls. This paranoia isn't restricted to small sites either -- Google's even listed ad blockers as a potential revenue problem in investor disclosures. A couple of potential causes: maybe it's that impressions actually do matter to revenue in some cases and we haven't completely moved over to conversions yet, or maybe it's that advertising increases consumer spending even without direct conversion rates, or that most publishers are engaged in fraud and ad-blockers make it harder to do that. It might even just be that publishers/advertisers are all stupid and haven't realized that ad blockers don't matter, but I think that's unlikely. What seems plausible to me is that most of the people who block ads are not as immune to advertising as they claim. If they didn't block ads, they would occasionally click on an ad and provide a conversion. I would not be surprised to see that exposure to advertising increased overall spending, and didn't just redirect it to specific companies. I could be wrong though, maybe it's something else. I'd be interested to see research on that kind of thing. Regardless, it is very difficult for me to square the world you describe with a world where a huge fraction of news sites I visit are including banners that tell people to whitelist ads, or anti-adblocking technology outright, or are just giving up and switching to subscription models. I can't think of an explanation for that other than, "ad blockers decrease revenue", and I think that having an explanation for that behavior is a prerequisite to making a believable claim that ad blockers aren't hurting revenue right now. I mean, Google's not dumb. They would not have wasted time on the acceptable ads initiative if they didn't feel like they needed to.
paulie_a 7y ago
Or make the demographic info useless by intentionally clicking on ads at random costing them money.

devoply 7y ago

The web was fine without these commercial companies. Not like their content added a ton of value to the web. The news is mostly propaganda anyhow, belonging to various wealthy parties that want people to pay for their propaganda... If they funded it completely out of pocket, that would be a more honest approach to these "businesses". The other companies like FB, they took bunch of content that belonged to users that users had tools to publish for free and willingly put them in silos. There is maybe 1% of content that needs saving. The rest of it is the same sort of drivel that you get from tabloids and I say making that stuff economic non-viable is a good thing. The elites though care about making it work because otherwise the democratic media is "fake news", meaning news heavily slanted to what people want to believe rather than what they are told to believe. If you want that, then they should pay for it. Not the people through taxes as Bernie is proposing... or this scheme. Other than that we have good models like BBC or PBS on how to do independent government and publically funded programming. In fact if we re-engineered the web so that there was no data sharing between various systems on the frontend, something like everything has to be served from the same canonical domain, and put it in law that you could not share data between various private companies on the backend without heavy regulation and oversight that would be a better web. I mean prism is already sharing all this data, why don't we put controls on that?

potta_coffee 7y ago
The web was hands-down better when most content was made by hobbyists without a profit motive. I used to be able to spend countless hours online. Now it's rare for me to stumble across anything worth looking at. Granted, it's easier to search for and find specific information.
- ivanhoe 7y ago
  Totally, just like so many bands were better young, clubs, beaches and restaurants better before they got popular, etc. Unfortunately it's just something that happens when things get mainstream, you can't reverse the process.
xchaotic 7y ago
You mean like censorship? Who gets to decide? Or do we continue to upvote like we do now?

tlb 7y ago

> the pool of [all consumers' discretionary income] is likely a small fraction of the pool of [all commercial companies' marketing budgets]. "Discretionary income" is a short-term idea, defined as [income - cost to maintain current lifestyle]. Over longer periods, lifestyles expand to fit current income and the idea is meaningless. For instance, when cars were new, people could only buy them if they had a large chunk of discretionary income to spend on them. But now, most middle-class people own a car that costs more than their discretionary income. So discretionary income isn't a cap on what people can spend in the long term.

weberc2 7y ago
Discretionary income is measured in dollars/time, cars are valued in dollars. That’s relevant because cars are affordable to middle class Americans because of _financing_ (also because of mass production). Your car payment deducts from your discretionary spending while web advertising does not—without web advertising you would need to subscribe to the websites and services you consume and that would come from your discretionary dollars. Whatever your views on the matter, getting rid of advertising isn’t going to come for free.

robbrown451 7y ago

Does it say somewhere it is tip based? It seems like there are a ton of things that can be done to make it work better than where it is totally based on "small tips."

AndrewKemendo 7y ago

If online advertising went away overnight I'd extend that to all advertising and I think we might be out of this mess permanently. It seems like an insane concept, because advertising is a part of modern life, but I think it's the only way to effectively kill the surveillance/influence peddling hydra. Otherwise, all these efforts just redirect ad dollars to other forms of systems of influence which may be similarly as invasive.

tqi 7y ago
What counts as advertising?
- AndrewKemendo 7y ago
  This is the same as saying "Define Pornography." You're asking for a bulletproof formula that doesn't exist. That doesn't mean we can't take a pretty good bite out of it. How about this: Any action taken by an individual or organization with the intent of influencing another individual to execute a commercial transaction. No billboards, TV commercials, newspaper advertisements, hyperbolic statements about products. I'm sure some wacky new loophole would be found, but it would be just that, some wacky loophole, not a massive trillion dollar industry built around manipulation.
  - cameronbrown 7y ago
    > Any action taken by an individual or organization with the intent of influencing another individual to execute a commercial transaction. That definition pretty much boils down to every interaction between businesses and individuals, ever. Any kind of negotiating or sales or communication..
    - AndrewKemendo 7y ago
      Correct. Like I said, it's pervasive to the extent that we just assume it's the only way it could be, but it's behind every terrible thing. I know this first hand, I built these systems. The end state is to know and predict everything you do, and then sell you something about it. Whether its a product or an experience or a feeling. That's where it all leads - you lose your agency. Getting rid of online marketing or nudging it one direction or the other won't really change it. You can ban it online outright, but it will persist in another form. Our entire world economy is based on different groups vying for your attention to monetize, to the point that as we go further, nothing is not monetizable. It's the Truman show, but everyone is Truman.

gumby 7y ago

> the fact that the pool of [all consumers' discretionary income they'd be willing to spend] is likely a small fraction of the size of [all commercial companies' marketing budgets]. I don't understand this statement. The companies marketing to people with discretionary income presumably get their revenues from that discretionary income. So mathematically their marketing budget would have to be smaller than the revenue from these people.

savanaly 7y ago
By [all consumers' discretionary income they'd be willing to spend] I think the parent meant [all consumers' discretionary income they'd be willing to spend on web content] which is obviously a subset of all their discretionary income. Marketers are peddling tangible useful items, and people will pay a lot more for that than for the ability to read given words on the internet.
dangrossman 7y ago
> presumably get their revenues from that discretionary income This is where you made a mistake. Their revenues comes from spending on necessities, not from discretionary income. Proctor & Gamble's $7 billion a year in advertising is coming from our buying soap and laundry detergent and toilet paper, not what you have left over for movie tickets. The $30 billion a year in medical marketing is coming from insulin and blood pressure pills, not your Netflix subscription. Most consumer spending is on necessities (food, housing, car payment, health/auto/home insurance, mortgage interest, fuel, etc) and those companies do the bulk of the advertising. People cannot choose to spend that money tipping websites instead unless they stop eating, stop taking medication, etc.
- austhrow743 7y ago
  I don't think that distinction is precise enough for this. Sure soap is a necessity, but if you buy some premium fancy soap from P&G that had a lot of marketing budget contributing to its high cost rather than the supermarket brand plain soap, then plenty of that soap money was discretionary.

kbuchanan 7y ago

Adding to this, in the same way that privacy specialists struggle to convince the public of the supreme importance of security and privacy, it's difficult for superusers to appreciate the general public's feelings about the trade-offs of advertising—in other words, the general public might never care. (Mozilla's campaign is a form of activism by superusers, for superusers.)

bill_rr 7y ago

That first sentence took me a little while to wrap my head around and I don't think it's true or logical. In other words, even if it was true, I don't see why it matters. I'm building a company that plans to charge people to read things. The reading experience, without ads, is superior. It's worth paying for. That means that an ad free future is possible.

ribosometronome 7y ago
>It's worth paying for. Given the current state of the web and the struggle that many media companies are having, I don't think we can take this for granted today. Fingers crossed that you and experiences like Mozilla's proposed can change this.
SQueeeeeL 7y ago
You may think it's worth paying for, but your average consume will not. It makes sense from a consumer point of view, how am I to know if this "superior" experience is worth my money if I haven't tried it. How do I know it will stay that way, lots of magazines and newspapers quality tanked after they got high subscription numbers.
- awad 7y ago
  Forget the average consumer...it's pretty much guaranteed there will be an outline.com link posted on any paywalled article on HN (along with the usual paywall complaint) and this crowd seems to fancy itself above the average consumer.
- sebastos 7y ago
  "Did you see that new Thai joint opened up down the street? I heard it was pretty good. Want to try it out?" "And just how are we to know for _sure_ that this trumped up restaurant is truly superior?" In other words, this is how capitalism works. Businesses and vendors make value propositions, then people take chances on them. It works for every single other class of good, but for some reason the big brains that run the internet can't wrap their head around how it would work for them. Some people have understood this, and they're making a killing from it. For instance, which do you watch more of, HBO, Hulu, Prime and Netflix or broadcast TV? Tons and tons of people are happy to shell out cash for products they consider worth it. Newspapers and magazines have tried to convince us that these asshole millenials refuse to pay for things anymore, but what they mean is they refuse to pay for shitty things. They're actually perfectly happy to OVERpay for things they like. It just turns out newspapers and magazines aren't, you know, worth that much.

hutzlibu 7y ago

Why does it not adress it? It is also about changing the mindset of people. Make it easier -> make it more common to voluntarily pay for thing you value -> more projects are financed that way -> more people see it is a way to make a living -> better content -> more people willing to pay, especially seeing the difference to normal ad madness

dangrossman 7y ago
Nothing in that feedback loop will allow people to spend money they don't have. A big chunk of the money you spend on groceries, car payments, insurance, medication, etc is going into those companies' marketing budgets, and that ends up as the ad revenue that finances the web today. You don't have that money to give to website owners directly instead, as you've already spent it on those goods.
- hutzlibu 7y ago
  Marketing makes people buy plenty of things they don't really need nor want. If people choose not to be exposed to tailored ads so much, they would have this money to spend for other things, like paying directly to support what thes want and not the long route indirectly and ineffectivly via ads.
  - dangrossman 7y ago
    Most marketing is for necessities, to steer which brand you decide to buy, not to make you buy a category of product you wouldn't buy otherwise. You need soap, they just want it to be Dawn soap. You need laundry detergent, they just want it to be Tide detergent. Etc etc. You're not going to stop buying food, soap, medication, gas, etc so that you can direct that money to tipping websites instead.

sebastos 7y ago

This kind of seems like a troubling insight at first glance, but it doesn't pass basic sanity checks imo. You could make the same exact argument about any other type of industry. Watch: >The [pool of discretionary income people have to spend on books] is a small fraction of [all commercial companies' marketing budgets], therefore it will always be more profitable to run free bookstores that try to make money by putting ads inside the dustjackets and all along the shelves. But this obviously isn't true - Barnes and Noble is a thing. Or you could even consider Kindles and the ebook market examples of how this isn't true. It can be far _superior_ in terms of revenue to offer a product that people pay for directly, as opposed to baiting them into a space with ads in it. I think the mistake came in when you compared all of the marketing budgets combined, (call it M), with all of the discretionary income combined, (D), and took it as axiomatic that D << M. But... how could that possibly be true? Most companies will not be operating at a loss, which means their annual marketing budget will be some fraction of their gross revenue. From what I can tell from some googling, at least ~60% of that revenue, averaging over all corporations, is coming directly from... consumers' pocketbooks. Some more googling tells me that marketing spend from US companies was ~$200 billion in 2018. US consumers spent $14 trillion. So the whole premise strikes me as questionable. Am I missing something?

cameronbrown 7y ago
Your argument breaks down when you consider the thing that allows newspaper/web ads to be profitable is the cost of delivery effectively being reduced to zero, whereas a book still has massive printing costs that cannot be scaled as well (thousands of the same books vs. millions of the same newspapers/page views)
- sebastos 7y ago
  B-b-but what about ebooks?
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mirimir 7y ago

That may be true. But I have no clue where those marketing expenditures go. I do recall reading about major firms realizing that most of their marketing expenditures more or less accomplished nothing. From a bottom-up perspective, I've read that ad income is typically on the order of $0.01-$0.10 per page view. As a more or less middle-class American, I'd be willing to pay that. Or at least, I would if ad blockers stopped working. And while that wouldn't be affordable for most people worldwide, I'm sure that there's some way to normalize by user geolocation. In fact, I wouldn't be surprised if ad payments aren't already normalized by user geolocation.

eitland 7y ago
My thoughts as well. Between GDPR making current ad models harder to pull off and more risky and the fact that ads are getting less effective I think I might see an advertising bubble: Here are my thoughts, comments on why this is wrong are welcome: the market for online ads seems to have been growing more than consumers disposable income for two decades. Much of that might have come from cannibalizing other forms of advertising, but sooner or later it can't grow anymore as a new equilibrium has been reached between TV ads and online ads and consumers don't have more money to spend anyway. I remember an old blog post from Google or something showing a whiteboard with crazy thoughts: what if we could have a mirror behind the earth to reflect sunlight and make the day longer? Then people could spend more time searching => more ad impressions => more revenue. I feel we are at that point now, only consumers have enough time to browse, they just can't buy more than they already do (and some markets might be even beyond that point, fueled by credit card debt etc.)
- mirimir 7y ago
  I've argued this point before, and have hoped for comments from people who run ad-supported blogs. Or manage larger commercial sites. Just to see if my estimate low-balls ad income. But no ... I do believe that we're in an ad bubble. For one thing, I've read that it's hard to measure effectiveness. You can look at revenue vs ad spending. But so many other factors affect revenue. Some you have measures for, such as how the economy's doing. But for others there's no public data. Such as ad spending by competitors. You can measure that directly, or buy data from firms that do. I gather that's a key use for VPN services with residential IP blocks. And then there's the fact that you're typically running multiple ad campaigns. So it may not be obvious which of them actually increased revenue. Bottom line, I suspect that firms have been throwing money at online advertising. Either blindly, or seduced by bullshit from ad management firms. And so it's entirely possible that total ad spending is greater than users' discretionary income. But if that disappeared, and was replaced by user micropayments, I doubt that all sites would be impacted equally. HN and Wilders wouldn't be impacted at all, for example, because they don't run "ads" per se. And popular sites generally could probably earn as much as they do now from ads. At least, if their paywalls couldn't be gamed. So is there anything that would disappear that's valuable? I can't imagine that anyone would miss ad-supported link farms, for example.

PeterStuer 7y ago

I do not agree with your premise. The amounts that companies make of blatantly selling out your data to be abused is often much lower than I would be willing to pay. I pay for YouTube Premium primarily to get rid of the adds. I stopped using Facebook in 2017, but if I used it I would gladly pay the single digit dollars per year they seemed to make of me. Now where i do agree is that even with people paying for content and services directly, advertizing would creep back in, because it would always be a potential supplementary revenue stream just sitting there tempting the content or service providers. This is where we need strong regulation such as the GDPR enforced to stem this general race to the bottom.

dangrossman 7y ago
Facebook's ad revenue for 2018 was $55.8 billion from 2.7 billion MAU. That means each user is worth $20.67 per year. In reality, not all users are worth the same, and as an English speaker, you're probably worth at least double the average. So, figure $40 a year to remove ads from Facebook, not single digits. Now what about the other 10,000 websites you touch each month?
- PeterStuer 7y ago
  About $50/month for a family plan should be fine for a completely add free internet. How that fee is distributed across the different sites I visit is an administrative issue.

NicoJuicy 7y ago

That's not exactly how it works. I don't price my products depending on marketing. Marketing is a % of my profit I'm willing to spend, to try new things.

dangrossman 7y ago
That's not how it works for most businesses.

simula67 7y ago

> [all consumers' discretionary income they'd be willing to spend] is likely a small fraction of the size of [all commercial companies' marketing budgets] Assuming you meant all spending, this cannot be true, because all marketing budgets are paid out of people's spending. You are paying for advertisements, they are included in prices of goods and services you buy.

Freak_NL 7y ago
It can be true if people spend more than they think they are willing to spend on content via advertisements. That is, people underestimate how much advertisements affect them. And of course there are people who simply block advertisements. Either that, or advertisers overestimate the impact of online advertising.
buboard 7y ago
marketing pays itself to an extent through increased revenue and scale. Historically, companies have spent more or less the same percentage of their revenue on marketing. It seems they find an equilibrium
dangrossman 7y ago
I can't forego buying food and housing and medication so that I can reallocate "what I pay for advertisements" to tipping websites. If there's less advertising inventory available on websites, P&G is going to reallocate that spend to some other form of advertising, they're not going to drop the price of the shampoo and toilet paper I buy from them. The money's not in my pocket to spend, it's in theirs.
- C4stor 7y ago
  You can reallocate. Only top tier brands use ads, and the price of the advertising is part of the premium you pay for the brand name. For a lot of products, there's no functional difference with their cheaper alternatives. So, this brand premium is in fact discretionary spending that you could reallocate.
  - 7y ago

dalbasal 7y ago

You are assuming that any effort will be trying to break the advertising paradigm in favour of a direct payment one. The article/grant doesn't seem to be about that. Whatever the business model, this seems to be more about breaking platform capture than breaking business model. The alphabook platforms particularly. Ultimately it's a big field. We have direct payment models (netflix, spotify, iTunes, kindle...), ad-suported models and quite a lot of online content production where monetisation is secondary to distribution. I think it's a good time for this initiative. YouTubers (for example) with millions viewers can (a) make very little money (b) chaffe at various policies, either money or content related and (c) generally have far less power vis-a-vis alphabook than their audience size implies. Meanwhile, podcasts, a much freer medium, is both more profitable and quality oriented because of the platform openness. ...open doesn't mean no advertising. The main thing it means is decentralised, or centered around content creators. This a a good idea. YouTube is no longer necessary. If it suddenly disappeared, online video content would quickly recover fully around alternatives. They contribute the least value while extracting the most.

Eridrus 7y ago
> Meanwhile, podcasts, a much freer medium, is both more profitable and quality oriented because of the platform openness. I don't think this is true. Podcasts are more profitable since their production costs are lower, their audience skews wealthy and its inherently easier to make longer audio content, so it's possible to put more ads in. Nothing is stopping YouTubers from not using the default ads and getting their own sponsors.