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The entire business model that monetises user data, where the actual customer is the advertiser, users do not vote with their wallets, and honest competition is

The entire business model that monetises user data, where the actual customer is the advertiser, users do not vote with their wallets, and honest competition is impossible because no one can compete with free, should simply not exist and maybe regulated against—especially in social media, where it incentivises algorithms to push aggravating content in the name of engagement and ad views. Whether Apple should be regulated into reducing the fees they charge for access to their hardware and software ecosystem (the ecosystem they unarguably did a pretty stellar job at) is a debatable matter of its own, but it doesn’t strike me as addressing the issue of ad-supported business and how it messes with the way the market is supposed to work. It is true that platform fee means this distorted business model is unfairly favoured. However, this is just an extension of the business based on ad/data mining (especially social media) being generally unfair in so many ways, and even with zero platform fees that business won’t stop being unfair and won’t be seriously challenged. To reiterate, no one can honestly compete with free; fee reduction merely tweaks the formula from “free vs. $X” to “free vs. slightly less than $X”. Furthermore, there is the obvious issue that even if an app or service is paid, it can still be additionally monetising user data. Reducing fees will only favour this doubly shady business. Perhaps what could actually move the needle a bit and make this model less attractive is if walled gardens somehow found a way charge a big fat fee off the ad/data mining revenue, in conjunction with appropriately reducing fees for regular sales of B2C apps and services. Could this be technically possible without walled gardens additionally owning ad exchanges (which might be a can of worms that shouldn’t be opened)?

thfuran 1y ago
I think the fix we need is comprehensive legal privacy protection and (even less achievable) significant restriction on advertisement. That would actually curtail the market for user data and prevalence of ad funding as a model.
mock-possum 1y ago
What’s weird for me is that users can effectively vote with their wallets - they can refuse to engage with ‘freemium’ or ad-supported media - and they can refuse to consume ads when presented, refuse to engage with calls to action, refuse to pay for products advertised to them in this way. Have you ever been shown a mobile ad, and thought to yourself, “this is a good thing, this is an honest description of a product that I am eager to spend money on?” No, on the contrary, they’re the subject of universal ridicule… and yet they persist. Why? How? Who is paying for them? How are they generating revenue? How can that be worth anything? Where is the value coming from? So even though I delete apps that force you to sit through ads, and I refuse to be led by ads towards spending money - even though I am in effect ‘voting’ by doing so - it doesn’t seem to have any impact. The ads keep happening anyway, I can only assume because they do actually work on other less canny consumers. Is the problem really an inability to vote with our wallets? Or is the problem a complete lack of media/marketing literacy, that leads the credulous to engage with ad slop, against their own best interests?
- salawat 1y ago
  >Is the problem really an inability to vote with our wallets? Or is the problem a complete lack of media/marketing literacy, that leads the credulous to engage with ad slop, against their own best interests? The problem is companies/marketers who won't take no for an answer... And unfortunately, short of reverse monetization, (marketers must pay individuals for our eyeballs, which has its own logistical problems), there isn't a way to really prevent the pathological impression pipeline that advertising has gravitated toward. In the U.S. unfortunately, there is zero we can do to corral mercantile speech short of collectively coordinated action by the populace since we've written the capability out of our governmental edifice.
- strogonoff 1y ago
  Some of it is more specific to social media, where it is a vicious circle. I wouldn’t latch to voting with your wallet, it’s merely one symptom of a complex issue. For social it’s key to communicate with others, so as long as you use it you kind of have to be where everybody is, and everybody is where the free stuff is. If you can’t easily leave and continue communicating, because the platform attracts advertisers by the number of figurative eyeballs so it’s not in their interest to let yours go, then you can’t vote with your wallet unless you make yourself an outcast, which humans—extremely social beings—tend to find extremely stressful, which makes it is not really in their best interest no matter their media and marketing literacy. On the other hand, even if you do make this difficult near-suicide move and leave, you have hardly anywhere to go: because of this phenomenon, any honest competition where you can pay for better service that works in your interest and has actual customer support (remember when that was a thing?) has no chance. All viable competition remains mostly free to use—we have been conditioned that it’s got to be free, but of course if neither users nor advertisers are paying then no one can really demand things that we take for granted from commercial services (like uptime, availability, well-supported convenient clients and so on), and the amount of resources that goes into development and support of these services is much smaller and much less coordinated. With non-social ad-supported products it’s not as bad, at least in terms of lock-in. I personally would prefer a paid app from a somewhat reputable developer than risk installing a tracking machine from a shady SDK. However, still, most people default to free, and if platform fee is reduced and that honest app costs slightly less but is still not free, will it make any perceptible difference? I doubt it (maybe you’re right, most people lack media/marketing literacy, they can see that with free their economic utility per dollar approaches infinity and are unaware or not concerned about the intangible damage, including to the ecosystem of developers who try to make an honest living) and so I think ad/data mining based model should be fought on another level.

thfuran 1y ago

I think the fix we need is comprehensive legal privacy protection and (even less achievable) significant restriction on advertisement. That would actually curtail the market for user data and prevalence of ad funding as a model.

mock-possum 1y ago

What’s weird for me is that users can effectively vote with their wallets - they can refuse to engage with ‘freemium’ or ad-supported media - and they can refuse to consume ads when presented, refuse to engage with calls to action, refuse to pay for products advertised to them in this way. Have you ever been shown a mobile ad, and thought to yourself, “this is a good thing, this is an honest description of a product that I am eager to spend money on?” No, on the contrary, they’re the subject of universal ridicule… and yet they persist. Why? How? Who is paying for them? How are they generating revenue? How can that be worth anything? Where is the value coming from? So even though I delete apps that force you to sit through ads, and I refuse to be led by ads towards spending money - even though I am in effect ‘voting’ by doing so - it doesn’t seem to have any impact. The ads keep happening anyway, I can only assume because they do actually work on other less canny consumers. Is the problem really an inability to vote with our wallets? Or is the problem a complete lack of media/marketing literacy, that leads the credulous to engage with ad slop, against their own best interests?

salawat 1y ago
>Is the problem really an inability to vote with our wallets? Or is the problem a complete lack of media/marketing literacy, that leads the credulous to engage with ad slop, against their own best interests? The problem is companies/marketers who won't take no for an answer... And unfortunately, short of reverse monetization, (marketers must pay individuals for our eyeballs, which has its own logistical problems), there isn't a way to really prevent the pathological impression pipeline that advertising has gravitated toward. In the U.S. unfortunately, there is zero we can do to corral mercantile speech short of collectively coordinated action by the populace since we've written the capability out of our governmental edifice.
strogonoff 1y ago
Some of it is more specific to social media, where it is a vicious circle. I wouldn’t latch to voting with your wallet, it’s merely one symptom of a complex issue. For social it’s key to communicate with others, so as long as you use it you kind of have to be where everybody is, and everybody is where the free stuff is. If you can’t easily leave and continue communicating, because the platform attracts advertisers by the number of figurative eyeballs so it’s not in their interest to let yours go, then you can’t vote with your wallet unless you make yourself an outcast, which humans—extremely social beings—tend to find extremely stressful, which makes it is not really in their best interest no matter their media and marketing literacy. On the other hand, even if you do make this difficult near-suicide move and leave, you have hardly anywhere to go: because of this phenomenon, any honest competition where you can pay for better service that works in your interest and has actual customer support (remember when that was a thing?) has no chance. All viable competition remains mostly free to use—we have been conditioned that it’s got to be free, but of course if neither users nor advertisers are paying then no one can really demand things that we take for granted from commercial services (like uptime, availability, well-supported convenient clients and so on), and the amount of resources that goes into development and support of these services is much smaller and much less coordinated. With non-social ad-supported products it’s not as bad, at least in terms of lock-in. I personally would prefer a paid app from a somewhat reputable developer than risk installing a tracking machine from a shady SDK. However, still, most people default to free, and if platform fee is reduced and that honest app costs slightly less but is still not free, will it make any perceptible difference? I doubt it (maybe you’re right, most people lack media/marketing literacy, they can see that with free their economic utility per dollar approaches infinity and are unaware or not concerned about the intangible damage, including to the ecosystem of developers who try to make an honest living) and so I think ad/data mining based model should be fought on another level.