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The Digital Advertising Duopoly

149 points| kernelv | 8 years ago |avc.com | reply

110 comments

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[+] shubhamjain|8 years ago|reply
There are only two ways to break the duopoly: create your own massive medium like Facebook or work with publishers. Having worked in this industry, I think working with publishers is an impossible battle. The whole publishing world is rife with fraud and desperate attempts to increase page views.

Most publishers cram their websites with ads. The number of low-content, click-baity websites is just staggering. Sometimes I wonder how could this even be a profitable proposition for advertisers. This is one reason why Google absolutely dominates the space. It has the capability to deal with all the fraud, calculate the right reward for publishers, and give a meaningful ROI to the advertiser.

Maybe a new kind of advertisement medium could unseat Google from its dominance but the way digital advertising works today, it sounds like an impossible idea.

[+] stevesearer|8 years ago|reply
My site https://officesnapshots.com doesn’t really fit into either of those molds.

We sell our own advertising space, self-host it, and use static jpgs for the graphics.

The ads are also targeted against the content (office design) and tend to be for products like office furniture. In a roundabout way this targets the readers but only because if they are on the site they are likely interested in learning about new products in their field.

[+] rhizome|8 years ago|reply
I'd like to see an industry by which companies or their advertising reps engage with sites in a subscription-like mechanism for direct advertising. Cutting out the middleman seems like a logical step in this day and age.
[+] askafriend|8 years ago|reply
Look at Pinterest, Twitter, Nextdoor, SnapChat etc - there are a generation of new advertising and content machines that are being built in different verticals as we speak. Ultimately, they'll hold all the distribution power across different contexts. I wonder what kind of publisher this kind of world incentivizes.
[+] f00_|8 years ago|reply
just a couple counter examples I wanted to point out:

giantbomb.com (ads + subscription only content) 4chan (I would like someone to explain it more deeply to me, but I think they run their own ads, do they use an outside service?)

[+] dreamfactored|8 years ago|reply
Native ads. Match that up with content creator networks
[+] brndnmtthws|8 years ago|reply
All the more reason we need adblockers and private-by-default browsing. It worries me that I can't use something like Privoxy on Android without rooting the device. An alternative would be a good privacy VPN with blocking/filtering of ads and trackers.
[+] organsnyder|8 years ago|reply
I've switched to using Firefox Focus as my main Android browser. It provides ad blocking and privacy features. For apps, I try to avoid ad-supported ones whenever possible, and am happy to pay for apps that I find useful.
[+] wan23|8 years ago|reply
I think you're missing the main point here. What we really need is a better way to pay for the web. If everyone blocks all ads without solving this problem first there won't be any content left to block ads on.
[+] buro9|8 years ago|reply
Isn't this normal?

Doesn't radio advertising have a similar duopoly? Same for outdoor advertising?

The internet never delivered disintermediation, it only changed who those intermediaries were.

[+] herodotus|8 years ago|reply
The problem with subscriptions is not the cost, its the sheer number of them - and some come up almost accidentally. I pay a lot to my ISP every month. I would like to see a company that charges me monthly to eliminate all adware by micro-paying the participating websites for my actual page visits. In fact, if my ISP added such a service for a fee, I would sign up.
[+] majani|8 years ago|reply
The only company that could manage these subscriptions effectively is one that owns either:

1. The browser 2. The app store or 3. The OS

Oh, wait...

[+] manigandham|8 years ago|reply
We tried this - there's a lot of political and business issues that basically mean you can't pull it off unless you're a major player (like Verizon or Google) already. Selling the data (of which one of the uses is advertising) is more lucrative than letting users pay direct, and that's before overcoming the hurdle of most consumers who think that they already pay for "the internet" including all the content.

Google's has the Google Contributor option [1], but that only applies for ads via their ad network and not other potential sources. There's also Flattr which is not as automated but it's now owned by AdBlockPlus crew and has raised rates so it's not such a transparent and clean system anymore.

1. https://contributor.google.com/v/beta

2. https://flattr.com/

[+] harshreality|8 years ago|reply
You want your ISP to [be able to] spy on, and track, your browsing habits? For unencrypted pages, that would probably take the form of DPI and injected javascript. For encrypted (SSL) web traffic, all your ISP has access to are 1) the ip of the website, 2) SNI hostname, if any, in the SSL helo, and 3) how long the TCP stream stays alive, which is probably not representative of your interaction with the site. They have no page-level information.

There's already a service that is probably capable of doing what you ask. It's called google analytics. Google's in the payment business, and google's in the tracking business. If only all publishers could agree to use analytics.js, and petition google to implement micropayments with some agreed upon fee structure.

[+] jacques_chester|8 years ago|reply
> I would like to see a company that charges me monthly to eliminate all adware by micro-paying the participating websites for my actual page visits.

I (and others) am working on this; I call it microsubscription. It's a common idea: I've seen maybe a dozen closely-related variations on it since hitting on it.

In typical techie fashion I became obsessed with the technical problem of preventing publishers from inflating their figures while also preserving user privacy. I solved it, was granted a relevant patent two days ago and I guess we'll see what happens in 2018.

[+] dreamfactored|8 years ago|reply
Next wave - aggregated subscription bundlers? Would also facilitate cross-marketing
[+] jasode|8 years ago|reply
>I don’t think subscriptions are the only answer here, as many do.

>We need models that support free consumption of media for many reasons.

If you rule out paid subscriptions to subsidize the freeriders, what options are left for "free" consumption? Either advertisements or a government-sponsored system (e.g. citizens taxed to support the BBC tv channels).

If there's a crypto financing option that Fred is hinting at, what would that look like?

[+] mtgx|8 years ago|reply
A cryptocurrency-backed tipping model (extremely low friction in tipping compared to any non-crypto alternative) is starting to look very promising.

Take a look at http://steemit.com/ for instance. It's kind of a Reddit clone based on that model. I think it still only has fewer than 1 million users, which means the quality of the user-generated posts won't be as good even as that from the (much larger) Reddit right now. But the tipping itself seems to be (largely) working.

I say largely, because last I checked months ago, I still thought it prioritized a sort of feedback loop for the "rich to get richer" on the platform. But this is easy to change with an algorithm update. My guess is the main reason they don't do it is because having people earn "$1,000 per post" is getting them a lot of publicity and word of mouth promotion, compared to if they made it so "almost everyone can earn at least $1-$5 on every post".

But as the platform grows (and the money on the platform grows with it) I would like to imagine they won't allow the "famous posters" to make tens of thousands of dollars on every post, and they will try to redistribute that to the rest of the platform users. If they don't do that, the platform will fail under its own weight anyway, and another competing cryptocurrency tipping platform will take its place.

But overall, I think this sort of platform has extremely high potential. I've seen many smaller-time Youtubers start using it, because it almost immediately allowed them to make more money than they made from YouTube alone.

Oh, and perhaps the "secret sauce" of the Steemit.com site is that it also spreads the earnings with the upvoters/downvoters as well as the commenters, which is basically paying for the curation of the platform, thus offering real monetary incentive to do those actions properly (although I imagine there may be some who try to abuse it, too).

[+] brucephillips|8 years ago|reply
Yeah I don't understand why he doesn't describe the solutions he claims to be thinking about.
[+] amoorthy|8 years ago|reply
Any idea why Fred is not a believer in subscriptions?

My hypothesis is subscriptions, for news at least, are all-or-nothing propositions. But in a world where there's so much content, much of it for free, we will only want to bypass a paywall for a given site occasionally when we encounter it.

Why hasn't someone built a variable subscription model that is geared to one's reading habits?

[+] CaptSpify|8 years ago|reply
>We need models that support free consumption of media for many reasons.

We have that already. In fact, we've had it for a while. The problem is that we keep taking something that is already free to distribute, and putting it behind arbitrary gates. We then think it's perfectly normal to pay the gatekeepers.

I don't know why we still use this model which hasn't made sense for >10 years.

[+] kiwicopple|8 years ago|reply
This is something that I'm exploring in 2018 with a group of people from the publishing world. Still very early stages, but if you have any further ideas or solutions then we'd love to hear them:

https://pollygot.io

e: link

[+] misterbowfinger|8 years ago|reply
It feels like an obvious revenue stream for content publishers is in education - specifically, MOOCs. "Content" is really access to interesting information and storytelling. That'd lend itself well to highly specialized MOOCs that people would pay for, potentially. (I guess that's not technically a MOOC, but you know what I mean).
[+] Abhishek41783|8 years ago|reply
With increment in dollars spent on digital advertising there seems to be a huge growth potential for online advertising agencies that can create successful campaigns- those not measured by likes, clicks, taps ... But by actual sales figures.
[+] tannhaeuser|8 years ago|reply
All that needed to happen is that the authority responsible for enforcing US antitrust laws vetoed against the acquisition of DoubleClick by Google and of Whatsapp by Facebook. Why haven't they?
[+] jpadkins|8 years ago|reply
both of those acquisitions contribute a small amount to each companies earnings. There will still be a duopoly without those acquisitions.
[+] brucephillips|8 years ago|reply
> I don’t want nor do I expect any governmental response to this market failure.

Why is it a failure? Price? Quality? Something else? I'm not convinced this is a problem.

[+] f00_|8 years ago|reply
market participants not taking externalities into account. i.e. this transaction benefits both you and me, but doesn't take into account the effect of the transaction on the environment/others
[+] CaptSpify|8 years ago|reply
How do you not consider people being openly lied to and manipulated on a daily basis anything other than a failure?
[+] weeksie|8 years ago|reply
Being against government intervention is naive. If the US did what the EU has done with allowing people to avoid being tracked the big tech companies would be nudged toward developing smarter business models. Maybe it's not necessary but it's foolish to dismiss government out of hand.

Allowing your largest companies to compete over hijacking your public's attention is precisely the sort of thing that reeks of government failure.

This generation of internet users is a lot more willing to pay for content than mine was. Gen X's reluctance to spend money online is what created the attention economy to begin with. Maybe the shift will happen on its own, but how much damage will we do in the meantime?

[+] ovao|8 years ago|reply
> This generation of internet users is a lot more willing to pay for content than mine was.

I haven't seen any evidence to suggest this is the case. Do you know of any?

[+] xPhobophobia|8 years ago|reply
> If the US did what the EU has done with allowing people to avoid being tracked the big tech companies would be nudged toward developing smarter business models. Maybe it's not necessary but it's foolish to dismiss government out of hand.

Do you think that they would really get "better" for a consumer, or more covert as they become "smarter"? I'd assume the latter.

[+] mgraczyk|8 years ago|reply
If the US did what the EU has done, I would probably have to wait another 50 years for products I use every day like - Google Maps - Google Speech Recognition - Google Photos Search - Google Home

I'm thankful that my government has allowed innovation to continue. I'm glad they have represented my interests as a consumer by favoring technological growth over protection I neither want nor need.

[+] malchow|8 years ago|reply
Cofounder of successful mid-tier competitor in this space (www.publir.com). Can confirm.
[+] IBM|8 years ago|reply
>I don’t want nor do I expect any governmental response to this market failure.

You should want it and it's weird not to expect it because the EU has already begun.

[+] nerdponx|8 years ago|reply
Isn't that the role of governments in a healthy economy? To step in when markets fail?