What Is to Be Done About the Ad-Based Internet economy?

:joy: things move fast around here

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Hello, dear community members,

we are planning the next coming up community call.
What could be done about the Ad-based internet economy with emphasis on the news? An (almost) face to face discussion extending this discussion.

It will take place on Tuesday the 18th of June from 18:00 to 19:00 Brussels time on zoom
If you are interested:

  1. Feel free to specify and propose your own spin on it before and during the call.
  2. Invite whoever you think might be interested from within and outside the platform.
  3. Tell us if you would you like to take some of the topical lead during the call? Who would maybe prepare some questions or a case study/project to present to others?

Please comment here if you are interested and @ the people you think might be interested

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I should be able to be there. Will you post the zoom link here?

Yes :slight_smile:

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Edgeryders Team is inviting you to a community call:

Topic: Any news @ ad-based economy
Time: Jun 18, 2019 6:00 PM Brussels

Join Zoom Meeting

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Hey folks :slight_smile:
New here and just stumbled over this very interesting thread.

I have been thinking for a couple of year about a way that the ad business, and revenue models for content production and curation needs to change. (And actively working in a direction that it will change)

IMO all existing approaches don’t work for their own reasons. What they share is that they are coming from an old thinking where we translate how print worked into the digital age.

  1. Ads.
    Obvious why they don’t work. They put an incentive on quantity of content and shallow clicks, they drive the spread of emotional (mis)information instead of wisdom and useful information.
    However we need to be aware that ads will always be around as they are a tool for the market to optimise distribution by making consumers aware of products and services. The question is if that stays the main income source of online outlets.
    The good thing is that ads bring in money that neither the publisher, nor the consumer has to pay for.

  2. Subscription models
    They are a good start and it helped to validate that people are willing to pay for quality content. What makes the subscription model good is that it frees content providers from the necessity of optimising for clicks, but may be able to focus on producing quality content again.
    However they effectively create a 2 tier consumer society where some people just won’t have access to this information. In my view it working somewhat against the purpose of journalism: to inform people.
    From a user perspective they are also horrible. Most readers are not reading content from just one provider, so buying a subscription from every of their sources is a decision making overkill and frankly too time consuming. Paid news aggregators only ease that problem, they don’t solve it. What about all those little websites that are not big household names like the nytimes? How are they going to be funded if they are not included in something like Apple News or Blendl?

  3. Micropayment Services
    The really good thing was that a user can determine for themselves how much worth their media consumption overall is and distribute the funds to any provider, big and small. This make an approach inclusive to many different types of contributions and potential income to smaller bloggers too. A student might just be able to pay 5 bucks, a CEO 200 and so forth.
    However approaches like Flattr didn’t work because the service required to find an audience that values journalism enough to sign up for such a new service. From a UX perspective practically unusable as it required users to manually press a button for each article they want to pay. Big decision paralysis and frankly too much effort.

So how could a new approach look like?

I think the inclusivity and user-centric flexibility of something like Flattr is the biggest step in the right direction I have seen so far. We’ve seen people like to pay, but we need to solve the UX issues that users have to decide who to give the money to.
This needs to happen automatically.
The question is how?

For doing so it would require having extensive data that can help to determine the usefulness/quality of content people see, and such a solution needs to be baked into another value proposition. It can’t be a standalone service like Flattr.

One of the outputs of the project we run is to provide that data and that service to build on.

At worldbrain we develop Memex, an open source tool to search your web history, annotate and collaborate with peers when doing web research. So you can search for websites, papers and social posts you’ve seen with the vague memories you have. Like “that article I visited last January with the words “climate change” in the text, it was on the nytimes.”
To make search possible the tool gathers data about how users interact with content. (e.g. how long did they stay, how far they scrolled, if shared/liked on social media, sent via email/messenger with (positive) sentiment)
All data is stored locally of course and no data will ever be sent anywhere without user consent.
Soon we will provide an API on which developers and entrepreneurs could build new tools with that data.
One of those could be a plugin that detects the the subjectively most useful content based on interaction data and automatically distributes the funds a user has allocated for their media consumption. This would IMO view solve the UX issues associated with current approaches to micropayments.
Brave has also been going into that direction and it seems to work pretty well. They still combine it with ads though, which is an OK step in-between but hopefully ads will not play such a big role anymore or the market has adjusted to only wanting to run ads on useful content.

For more information on Memex, check out this post: https://edgeryders.eu/t/introducing-oliver-worldbrain-io-memex-and-storex-democratising-knowledge/10157

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Gladly joining :slight_smile:

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Great :slight_smile:

Hi @johncoate also see this one by Noam Kolt in Yale Law & Policy Review (via SSRN):

“Consumers routinely supply personal data to technology companies in exchange for services. Yet, the relationship between the utility (U) consumers gain and the data (D) they supply — “return on data” (ROD) — remains largely unexplored. Expressed as a ratio, ROD = U / D. While lawmakers strongly advocate protecting consumer privacy, they tend to overlook ROD. Are the benefits of the services enjoyed by consumers, such as social networking and predictive search, commensurate with the value of the data extracted from them? How can consumers compare competing data-for-services deals? Currently, the legal frameworks regulating these transactions, including privacy law, aim primarily to protect personal data. They treat data protection as a standalone issue, distinct from the benefits which consumers receive. This article suggests that privacy concerns should not be viewed in isolation, but as part of ROD. Just as companies can quantify return on investment (ROI) to optimize investment decisions, consumers should be able to assess ROD in order to better spend and invest personal data. Making data-for-services transactions more transparent will enable consumers to evaluate the merits of these deals, negotiate their terms and make more informed decisions. Pivoting from the privacy paradigm to ROD will both incentivize data-driven service providers to offer consumers higher ROD, as well as create opportunities for new market entrants.”

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Just as a note - I ran a large web site/forum for 18 years and then another mid-sized for five and I never used any visitor data for anything…although I must admit to having shown some adsense ads on the larger site. Truth is, they never paid very well.
I happened to find the ad model worked for me - due to lower overhead (just me, part time) and also due to “direct to client” ads. Since there was no such thing as an ad network at the time, I contacted manufacturers of said products (high efficiency wood/pellet stoves, etc.) and had them pay yearly fees from $800 to 10K+ for being featured on the site. I never packed any pages with ads so received zero complaints over two decades. The site was profitable (although I never started or ran it for money!) from the first year until I sold it.

The second site was also educational on robotic tech and cameras. Once again I used ads, but in this case they were affiliate. It turned out there were very few vendors of such products, so the readers were going to buy “Brand Y” almost no matter what…but if they bought it after reading my “free” information, I got a cut of it. That did very well also…although again, not intended to make money.

I will note this. The Affiliate model was one of diminishing returns while the “direct client” ad model was not. This is due to the obvious…once a site can make money with Affiliates, 100 sites (or more) will eventually pop up with little or no content but designed just to slice off a piece of that pie. Income from that site was cut in 1/2 three years in a row. It doesn’t take math skills to see that this is not a sustainable model. Still, if the topic had still interested me I would have kept the site even with just “beer money” income.

What amazes me is these well known sites (CNN, etc.) that literally have 100 ads or more (mostly clickbait stuff at the bottom). That is pure desperation as the return per ad has to be incredibly low.

Top down change in those cases could come from ad networks by their limiting of allowable number of ads on each page. But they have little impetus to do so.

Anyway, just some short stories to show that ad-supported situations can work…seems less so as time goes by, tho.

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I am no legal scholar, but this may be because data protection is assimilated to privacy, a human right. Human rights doctrine ringfences away from market logic some aspects of human life. For example, there is certainly a return on child labor (ROCB) – just ask 19th century mine owners. There is also a return on selling yourself away as a slave (ROSYAAS) – and indeed this move was the last recourse of debt-ridden farmer in many societies, including ancient Babylonia. But modern lawmakers conclude that such practices are degrading and should be outlawed, not monetized. Maybe the regulators mentioned in the paper have a similar mindset about consumer privacy (I prefer to talk of “individual” privacy).

Interesting that you read it that way. Rights are both enjoyed and exercised, both of which may well include the generation of value (independent newspapers are a case in point, having a business model and maintaining an infrastructure for freedom of expression / public discourse does not mean rights are monetized). Whether the idea of a return means monetization depends on the values, and there is more than one logic of markets. For people to have a better sense of how (commercial / non-commercial) value is generated with data they provide makes sense to me (also because it resonates with my own interests in whiteboxing tech); and while this particular author begins with customers (of social media platforms, for example) rather than citizens (or non-citizens, for that matter) more broadly, the wide scope - see refs to the debate on whether data is capital or labor - suggests that we are still relatively early in that process of coming to terms with how data operates in processes of value creation…

I like the notion of ROD, but would there ever be a way to get to a realistic number? Would those companies honestly disclose that value? And maybe it isn’t very high per-person but becomes very valuable when aggregated in big groups. Regardless, I do think that an individual should know what data is gathered, what gets rolled up into big group numbers, how it is used, all of that. Only then could you decide if it is worth it to you or not.

Obfuscating to mess with ads? https://m.slashdot.org/story/357538

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Clever…have you tried it?

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Not yet, but I will =)

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An interesting quote from “Chaos Monkeys” by Antonio Garcia Martinez:

In media, money is merely expendable ammunition; data is power. With this new programmatic technology that allowed each and every ad impression and user to be individually scrutinized and targeted, that power was shifting inexorably from the publisher, the owner of the eyeballs, to the advertiser, the person buying them. If my advertiser data about what you bought and browsed in the past was more important than publisher data like the fact that you were on Yahoo Autos right then, or that you were a (supposedly) thirty-five year old male in Ohio, then the power was mine as the advertiser to determine price and desirability of media, not the publisher’s. As it turned out, this “first party” advertiser data - the data that companies like Amazon know about you - is more valuable than any publisher data.

This was a seismic shift that would affect everything about how we consume media, leaving publishers essentially powerless and at the service of the various middlemen between them and advertiser dollars, all in the name of targeting and accountability. If the publisher wasn’t savvy enough to arm itself with sophisticated targeting and tracking before tangling with the media-buying world, then that world would come to them, in the form of countless arbitrageurs and data quacks peddling media snake oil. Which is why even august publishers like the New York Times live at the pleasure of the media supply-side technology, data management solutions, and advertiser technologies that ostensibly pay them. Of course some very protective publishers like Google and Facebook, with unique media offerings, refuse to get arbitraged so openly, and to one degree or another, attempt to own the technical and the business connections between them and their advertising dollars.

Google moves towards implmenting a plugin/extension API to prevent ad-blockers to be effective in Chrome.

Mozilla seems to fight back.

https://blog.mozilla.org/addons/2019/09/03/mozillas-manifest-v3-faq/

ugh. several years ago when I talked with internet startups I advised them to move away from ad-based revenue models, as everyone would soon be using ad-blockers - but I see I was wrong: big tech is more than happy to revert it back to ad-based. Can we not come up with something more creative to make money but to shove products into our faces we don’t really need?

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There are many decades of experience in media (newspapers, radio, TV, etc.) which I think got creative enough to know the basic score.
Ads
Subscriptions
Grants (public TV, Radio, etc.)
Plain ole do-gooders (hard to do on scale)

Unless I missed something that’s about all there is. Even Grant based media uses ads these days (public radio, podcasts), although they are not in-your-face and tracking types.

Micro payments, which were the hot subject a decade or two ago, really never took off - but that is a subscription model in any case.

It’s hard to imagine coming up with anything new after so many millions have thought about this for so long. There are only X number of ways to create income from media…and that is what is being discussed when it comes down to it.

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