The podcast talks about how Ethan Zuckerman’s relied on pop up ads in his trial to monetize user-generated content without implicitly endorsing that content. Unconsciously, he created a trend that has reshaped internet revenue models with free-content sites that monetize users through ads. This happened a couple of decades ago, and now regrets the consequences. He actually apologizes.
But, what are the pros and cons of an advertising revenue model for your product, and the internet overall? Let’s review some.
Main cons
- Potential conflict of interest – freedom of speech is limited by your advertising contracts. In a way, the website content will be ad supplier dependent.
- Worse User Experience – users usually hate advertising, both the content and the intrusive nature of pop ups. The balance between the product/user design and demanding attention is tricky.
- Dubious practices – we don’t need any visual, intrusive ads anymore. We have normalized surveillance and assumed that the internet can collect and sell our data for whatever reasons.
Main pros
- Free for users (allegedly) – a core benefit of an advertising business model is that you can offer free services or content to attract users. If your business provides similar or better quality than subscription-based competitors, you should be able to attract a sizable customer base. A large user base is attractive to advertisers who want to pay to reach a large amount of people or a specific type of audience.
Also, vision is relevant. Free-with-ads models could be useful to launch a product until you can generate direct revenue from a large customer base. If customers would pay even a small fee for your services or content, you could get rid of ads and its dependencies at some point.
However, ad revenue models are here to stay. We have recently learned that, after years of resisting advertisements on its streaming platform, Netflix is introducing commercials to its service in a lower-priced subscription tier.
As users, a reflection. It is good to have free or super cheap products. But remember, if you are not paying for it, the product is probably you.
