Why we need ads to survive as a business model for creators

Count me out of the fairly widespread opinion in tech these days that digital advertising must die. This argument always boils down to two main complaints:

  • Ads are annoying.
  • They incent evil behavior, especially privacy violations.

There's truth to both these criticisms, of course. But I'd also say they're both essentially matters of implementation, not inherent characteristics of advertising as a product. Thus both problems should be fixable.

It should be possible to build ad software that's not annoying and evil but still allows people to get paid. This is exactly what the startup Brave and the open-source community around Basic Attention Token (BAT) have been working on, which is why I've become such a big fan lately. And they're not the only ones innovating in this area.

I'm also not opposed to other models like subscriptions or events or whatever else that might emerge alongside advertising as strategic options for publishers. The more, the better. I'm just saying that we should very much want ads to remain as a viable choice within that mix.

The thing is, ads are uniquely small-d democratic if they're implemented in a way that actually benefits creators. (More on this important qualifier in a moment.) Because advertisers in such a system are effectively paying to reach the richest, most desirable audience members, everyone (including poorer members of the audience) gets to enjoy the content, which often wouldn't exist otherwise.

Most other models do not replicate this particular dynamic very well. A subscription model, for example, effectively limits access to content to richer readers while shutting out the poorer ones. In turn, this also tends to limit the total reach of creators' content, which is never desirable. You write or make videos or podcasts or whatever because you want the material seen.

The pre-internet era provided great examples of this that are still instructive. For instance, when I was a cub reporter at the Washington Post in the late ’90s, the weekday paper cost just 25 cents. At the time, the weekday New York Times cost $1, The Wall Street Journal was 75 cents, and USA Today was 50 cents. So the Post was priced well below market value back then, including subscriptions that were essentially derived from the newsstand rate.

It was ad revenue that allowed the Post’s publisher at the time, Don Graham, to make up for this, of course. When asked why he didn’t raise the cover price, he would openly tell the staff that he wanted the Post to be accessible to everyone in Washington as their local paper. The 25-cent pricing was a purposeful decision to make the paper affordable for cabbies and cops and housewives, not just the lawyers and lobbyists on Capitol Hill that one might normally think of as Post readers.

Since then, Big Tech platforms like Facebook and Google have famously captured the ad market from old-school publishers like the Post. In doing so, they also sometimes express a certain business logic that's remarkably similar to Graham's back in the day – that ad support enables the tech platforms to provide their applications "free" to end users.

What's been lost, however, is that the ad revenue mostly isn't going to support journalists, artists, and other actual content creators anymore. The big platforms just hold onto it with paltry pass-along to actual creators. This is the main problem that ultimately needs to be fixed – the question of who gets paid for the ads, and how.

There are many ways to go about addressing that, from regulatory fixes to combat monopoly to market-based solutions like BAT. But we should all want the ad business model to continue awhile longer in some improved form, preserving the old small-d democracy it had at its best. That should be the goal, not blowing the whole thing up entirely.

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