Ad-supported business? Why it’s perfectly rational to start to worry now.
It’s no secret that the online advertising ecosystem is mostly a steaming pile of fraud, wasteful intermediaries, with incorrect data feeding biased algorithms, and ineffective creative delivering the wrong message. It is a byzantine mess — just LOOK AT IT:
Online media — specifically “free” and ad-supported media was the disruption that undid whole chunks of the media industry (in particular newspapers and magazines) — but guess what? Ad-supported Online media is an old business model now. The first banner ad (The AT&T “You Will” Campaign on hotwired.com) ran 27 years ago.
Content and ad personalization metastasized into surveillance capitalism, and social media became the maw into which we fed machines the details of our lives. All this data feeds into other machines that burp up a never-ending stream of guesses of what we might want to buy next, and robots and underpaid humans click and tap on billions of these ads making it seem like they are more effective than they are.
All of this — the whole infinite-party ad/data ecosystem is on the cusp of experiencing the same level of disruption that vast swaths of the media industry experienced in the early 2000’s. Like all business cycles, some of the big players are the disruptive innovators and will emerge different, while some are clinging to their old business models and will have a Kodak moment.
It’s time to re-think ad revenue (and data-brokering) as the only option and get back to making services people will pay for — via purchase, subscription or benefit of membership.
