Pros of an advertising revenue model for our product:
- It’s historically the easiest model for us to implement and market to investors. According to Zuckerman, we could contract our revenue growth to an ad network and solely focus on building an audience
- Online advertisement lets us see who’s looking at an ad — knowing who we’re even reaching is crucial to figuring out how to expand or certain demographics we’re targeting but missing.
- “An ad supported web is a web open to everyone”, especially since ad support lets users “try before they buy” and enables services to scale “to hundreds of millions of users at an unprecedented rate. There’s a powerful network effect here — Zuckerman uses the example of “when all of your friends are on Facebook, there’s a strong temptation to join, even if you don’t like the terms of service.”
Cons:
- It’s hard to advertise online without surveillance. This conflicts with our product’s value of privacy and anonymity — we’re providing a personalized service which means collecting user data, while vowing to not maliciously use and never sell that user data. If we’re using the advertising revenue model, how can our users trust us when we say that we value privacy?
- In general, “advertising creates incentives to produce and share content that generates pageviews and mouse clicks without thoughtful engagement” (clickbait!)
- Advertising model centralizes the web. Because companies like Facebook want to reach the most users, they can use cash from investors/sales to acquire smaller companies that have rival networks. (See: Instagram and Whats App)
- In general, a lot of places try to make up for the downsides of advertising by offering a ‘personalized’ experience, which often leads to echo chambers and a more polarized/divisive world
