this post was submitted on 27 Feb 2021
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The Ad-Based Internet Is About to Collapse. What Comes Next? (onezero.medium.com)
submitted 3 years ago by [email protected] to c/[email protected]
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[–] [email protected] 12 points 3 years ago (1 children)

This has been a theory since at least 2015 when Google let fly on an earnings call that their method of calculating click revenue needed to be changed to more closely resemble reality, but maybe the dam really is breaking now. There is also that saying that the longer something has been around, the more likely it is to survive into the future.

By the middle of the article, they sorta backslid from impending doom to:

If the ad bubble were to burst, causing the value of ad inventory to plummet, the business model of major platforms like Facebook and Google would collapse, and they would need to find another way to commercialize social media, search, and all of their free, ad-supported services.

I do hope the surveillance advertising model crashes and burns sooner than later but this didn’t convince me to delete my ad blocker just yet.

[–] [email protected] 8 points 3 years ago

Yeah, the model has proven itself to be more resilient than a lot of people anticipated. I think the current recession might play a factor though. Since businesses will have tighter margins it's going to lead to stricter accounting and they may revisit the idea of spending money on ads the way they do now.

[–] [email protected] 8 points 3 years ago (2 children)

Maybe next will come the subscription internet with paywalls and premium services everywhere.

[–] [email protected] 6 points 3 years ago

That would be great for the fediverse since it's already managed to find a sustainable model with a combination of volunteer run services and crowd funding. If commercial media suddenly got paywalled that would drive more people towards non commercial alternatives.

[–] [email protected] 4 points 3 years ago

most likely

[–] [email protected] 6 points 3 years ago

There is a large part of me that wants this bubble to burst, not because my life wouldn't be worse I just have the strong, destructive "I told you so" desire.

If something does burst it, I think it will be the insane power of content creators (especially video) to drive sales when they review things.

I think this will/already has lead to those with money compressing video content creators into a tight spot where they have to do everything they can do to satisfy the algorithm. When creators jokingly say something along the lines of "like, subscribe, comment and make those youtube algorithms happy!" I just wonder is that even funny at this point?

How warped is this already where content creators will be forced to push their users to interact in ways that the algorithm thinks signify human engagement.

[–] [email protected] 5 points 3 years ago

This article sounds like wish fulfillment.

[–] [email protected] 5 points 3 years ago

I don't see evidence for an imminent crash?

[–] [email protected] 5 points 3 years ago (2 children)

I didn't read the article. Does it say why is going to collapse?

[–] [email protected] 12 points 3 years ago* (last edited 3 years ago) (1 children)

It doesn't seem to really, besides just hinting that it's a bubble. I don't doubt that there's a tendency in the rate of profit to fall that ad based companies are not immune to, but it doesn't say how this plays out.

[–] [email protected] 3 points 3 years ago

Thanks

[–] [email protected] 2 points 3 years ago

To sell attention on a large scale, ad inventory had to be standardized and abstracted. “The amorphous, shapeless concept of attention has been transformed into discrete, comparable pieces that can be captured, priced, and sold,” Hwang writes. But losing the context of where that attention comes from can lead to “irrational levels of market confidence, a regular feature of financial crises going back hundreds of years,” because the worsening foundations of those markets become harder to see or easier to ignore. For example, even as the value of the digital ad industry was continuing to rise, the average clickthrough rate on Google’s display ads fell to 0.46% in 2018, ad fraud was expected to jump 21% to $42 billion in 2019, and a Google study found 56% of its display ads may not even be seen by a human. These stats suggest the product being sold is not nearly as effective or valuable as many purchasers of digital ads believe it to be.

This seems to be the main reason, basically suggesting that online advertising is in a bubble.

[–] [email protected] 1 points 3 years ago (1 children)

I'm very curious how soom this might happen. Anyone have thoughts on the signs leading up to it?

[–] [email protected] 1 points 3 years ago

The global recession that's unfolding might finally take ad based business model down. It has proven to be a lot more resilient than people have anticipated, so it's hard to say when it'll finally crash.