What I learned from running hundreds of forums is that:
1. Banners hurt unless they are relevant
2. Filtering for banners that are relevant tends to reduce revenue rather than increase as there is a smaller pool of highly relevant advertisers
3. Removing all banner adverts significantly increased engagement by every metric
4. Some revenue is possible using affiliate links within the content (re-writing existing links rather than inserting awful links on a word match basis)
That last one is what I now do. Is it as profitable as running banners everywhere? No. But it is the highest possible engagement with some revenue, and if one focuses energy on reducing costs instead it can work well.
Up until a week ago, I had an Amazon banner on my blog. When I set it up (about a decade ago), you had the ability to specify a search term in the URL of the banner, and I used this. For each post, I would have a targeted search term to use to display the Amazon banner.
Sometime in the past month or two Amazon got rid of that feature and so I was only getting a generic Amazon sales banner. I'm not sure why they changed, but they did, and I removed the banner. Thanks Amazon.
They probably determined your page-relevant term was just getting in the way of their killer machine-learning tuned strategy of showing ads for the last thing the user happened to look at.
Nope. I have no ad blockers installed. I also checked the Amazon affiliate website and the new banner ads (at the size I wanted) no longer have the option I was used to.
Thanks for sharing. I really wish there was a general web subscription with revenue-sharing between all visited websites. I hate seeing the ads on my own sites but have no viable way to replace them. And as a user I would like to support several sites, apart from disabling the adblocker.
It wouldn't work anyway. To make up for the advertising revenue, that subscription would have to be in excess of $100/month per household, and you'd need to get virtually every household in wealthy nations to buy into it. The amount of marketing money spent each year is on the order of 10-11% of all revenue made by companies selling consumer goods... you can't replace that with some $10/month subscription even if everyone paid it.
I think your estimate is off by more than an order of magnitude. I follow a number of large youtube channels. Many of them seem to be making more money from patreon than from ads. And patreon isn't even a true subscription model, since you can usually see the content even if you don't subscribe. And it still beats ads.
One of my favorite channels is this super niche thing that only gets about 1000-2000 views per video and makes 2 vids a month. That adds up to maybe $4-8 in ad revenue using some rough estimates of youtube's payout rate. On patreon he's making over $500 a month. Which is really respectable for such a small audience.
Online ads have never generated that much money per user and were only profitable in large quantities. Given how scummy they are and this evidence that they repel users, they should be eliminated.
Sure but that's a very indirect calculation. Only a fraction of that is going to end up funneled to banner ads and the websites that run them. And that's the relevant metric; how much revenue you are losing by moving away from ads.
On a first order that's right: We don't need all the ad people now that there's no ads.
But then we have to consider that 95% of the costs/fees for running ad networks would still be needed for cost-sharing models too. You still need third-party JS.
Patreon doesn't need js. A subscription model doesn't need js. Certainly not all the complicated tracking code and huge images and videos required for ads.
I was talking more about a model that works similarly to advertising (pennies/fraction of penny per page view)
I'm more of a fan for direct payments, though I think a lot of sites would struggle with just that.
How many people will subscribe to Android Authority directly? Lots of sites basically get views from searches , but little long term engagement. Those sites are still useful, but only have ads as a revenue model that's "viable"
Something's not right with that equation. You're implying that on average, each household is spending over $1000 per month on things they get via the online advertising that they would otherwise not get at all.
And that's just not realistic. One-off purchases, maybe. Sustained 1k/hh/mth avg - I'd love to see a proof of that.
Total advertising spend worldwide is $600 billion. Online is about 1/6 of that, call it $100 billion.
To a rough approximation, that's footed by the 1 billion wealthy inhabitants of the EU, US, Japan, Canada, Australian, and New Zealand. (I said rough, roll with me.)
That means that the per person costs of advertising are pretty much $100 annually online and $600 annually for all content (mostly TV). Keep in mind, those are real expenses expressed through household purchases.
(This means, by the way, that online content isn't free, you are paying for it, only, you're doing so indirectly, through advertisers.)
By contrast, total direct expenditures on print media run about $125/person in the US. (Audio/video may add to that.)
If you look at what is advertised, an awful lot is very high-ticket items. The FIRE industries (finance, insurance, real estate) were the largest chunk of spend as of a couple-three years ago. Electronics is another large segment.
The notion of some sort of universal content payments scheme, preferably indexed to wealth and income, has a great deal of economic justification. I've been exploring that for the past few years.
So, if I block advertising, I'm indirectly wasting the money these companies spend on me, and are paying more for products without any benefit? That's a funny thought.
Households do spend >$1000 per month on consumer goods/services (food, clothes, personal care items, etc). Those companies do spend >10% on marketing. I'm not sure what portion of it is spent online, which is what you'd need the subscription to replace.
There's no implication that every dollar they spend on marketing directly translates into $10 of new spending "that they would otherwise not get at all".
Much of it is brand spending. Procter & Gamble is the world's largest advertiser, and the goal of their ads is to make sure you keep picking up Tide every time you're in the detergent aisle. Coca-Cola's ads aren't trying to get you to buy $10 more of soda than last week, just to keep soda on your shopping list every week. Those ad dollars would need to be replaced by the subscription if you're going to remove the ads but keep compensation for the websites the same.
That $100/month is what you'd have to get every household to pay to get rid of all advertisement. Just getting rid of banner ads on websites should be a lot cheaper.
It's possible many ad-supported websites deserve to die... as I see it, they are economic parasites. Advertisers accept bad leads as a cost of doing business, but the cost is simply passed on to consumers.
Many low-quality news papers, TV channels, and magazines died when ad revenue shifted online - consumers did not see enough value to justify the unsubsidized rate. Others survived because consumers saw enough value to pay the higher rates. The internet isn't any different... a large chunk of the internet is spam surviving off of wasteful advertising revenue. Soon, the cruft will die off.
None of us need unlimited access to everything out there, and I don't think it's a sustainable expectation.
I think Mozilla ran the numbers a year ago and found that all the advertising on the internet only nets about ~$11/person/month. Though, hell, I'd pay 10x that to be rid of that malware vector.
A fair question, and I don't know that I've got the answer, though several answer-shaped possibilities suggest themselves.
One line of thinking has a Neilsen or Arbitron-like rating system that pays based on readership. I think that is ultimately a false lead as it simply rewards popularity.
Another is to employ a basic income approach. Given the number of writers I know who write largely because they can't not, this might work, though it might not be fully sufficient. The prospect of a UBI and some achievements-based revenue might make this more viable: electronic distruibution is gratis, but live performances and physical media might generate additional revenue, as might various services or other arrangements, all on top of a UBI base.
A third way might be to treat creation something like research: it's an activity, and it's funded as a certain overall percent of national income. Divide that by what's seen as a livable wage, and designate that there are so many positions open, and so many to be filled in a given year, that will be paid. Sorting out how to filter out those who really aren't suited to it is the next challenge, though there are various models: guilds, professional recognition (see the Emmy's, Grammy's, Oscars, Pulizter, Peabody, Nobel, Royal Society, AAS, and similar recognitions).
One thing I don't think should happen is for there to be some sort of quarterly or annual "rank and yank", or the general fight over scientific grants funding we now have. There's an article I'd recently seen about productivity of scientists over their careers, and the distribution is ... almost perfectly random. That is, a given scientist might produce some great work early, late, or in the middle of their career, once only or possibly several times. But there's not much rhyme or reason to it.
Creative work generally is something that evolves over time, and takes time. Days, weeks, or months even for a good piece of journalism. Years for a story, play, or film. A lifetime for works of science or philosophy. Take Wittgenstein, who wrote one book and then spent the rest of his life writing another refuting the first.
(And yes, there are prolific examples as well, though often they are best known only for a handful of works. Attention is a zero-sum game. Alexandre Dumas. Isaac Asimov. There's a large literature on Gresham's Law effects in literature, painting, music, drama, and television as well.)
The inputs to writing are information, sources, and investigations. Otherwise, generally, a quite space and not having to worry too much about room, board, heat, water, and light. Excessive remuneration doesn't much seem to help in its production, and a certain frisson may actually help, but only to a point.
Sponsoring is also possible if you can find something relevant and willing: a lot of the podcast and YouTube channels that I follow have audiobook platforms sponsor them.
I have Patreon and a Pay Pal tip jar. I still have ads on some sites. But I have fantasies that I will someday have enough revenue from other things to justify removing ads from most sites.
The Brave browser people are working on a weird cryptocurrency-based solution to this problem called the Basic Attention Token. Hope you don't mind being paid in some Ethereum tokens, though. https://basicattentiontoken.org/about/
Brave is crazy; go with Flattr instead. They both want to distribute monthly subscriptions from users to content creators. Flattr pays in real money and is easier for users because they can use credit cards instead of virtual tokens and hard-to-fill-up crypto wallets. Flattr works with creators on YouTube, GitHub, Vimeo, etc, etc. but Brave only works on the domain-level; meaning only Google can benefit from YouTube with Brave whereas individual creators get the money with Flattr.
There's Google Contributor, which is trying to make another comeback. One of the newspapers in Australia is using it, and supposedly Business Insider as well.
I've looked at Contributor and found it weirdly limited. Google doesn't need publishers to sign up for Contributor, because they are already all signed up for AdSense! The most logical way to implement Contributor would be essentially as a personal buyout of AdSense ads: if you are a Contributor, the AdSense JS checks that and then simply doesn't run, and assigns a fraction of a cent to the publisher in lieu of a displayed ad. Everyone gets what they want and this immediately gets you coverage of millions of websites instead of, like, 10.
That's how the original Google Contributor actually worked, it would remove Adsense ads from all websites running AdSense. You could even choose what to replace them with (eg pictures of kittens). Matt Cutts posted about it here in 2015:
Apparently that model was a huge flop and people just didn't want it. The new version requires publishers to remove all ads (not just AdSense), which helps since many newspapers seem to have dropped AdSense & switched to Taboola & other ad networks. Which might be one reason Google is trying it again.
(I expect the new Contributor will fail too, though. I think the majority of people just don't want to pay for online content.)
That's a pity. I expect the new optin model to work much worse; not sure why they're bothering... Patreon, IMO, shows people are willing to pay for online content but the exact method and experience matters a lot.
I've been running forums since 1996 using almost every major forum software that has existed. I'm currently running my own software (which we tried and failed to commercialise), and the largest forum I run is https://www.lfgss.com/ with 250k monthly unique visitors, but the long tail is very long.
We actually now survive more on donations from forum users than any advertising. About 2/3 revenue is donations, 1/3 from affiliates.
Affiliates work really well, but the rise of cash back sites mean that the revenue per sale is dropping. Affiliates work well for delivering new customers, but cash back is leading to retailers paying out for retaining customers which means the cost is shifting from acquisition to retention, which is traditionally where they make their profit. Hence cash back is leading retailers to make the terms far more strict, shorter cookie periods, lower %, etc.
Donations have been the saviour. As I'm running the sites as a platform, the larger sites effectively subsidise the young and growing sites.
Also, as a platform: 1 volunteer (me) runs all of the sites. Moderation is by communities, and has proven very effective whilst not requiring any additional cost. Though I did invest in some good lawyers for the T&Cs to make sure that approach kept the platform free of liability from individual sites on the platform.
1. Banners hurt unless they are relevant
2. Filtering for banners that are relevant tends to reduce revenue rather than increase as there is a smaller pool of highly relevant advertisers
3. Removing all banner adverts significantly increased engagement by every metric
4. Some revenue is possible using affiliate links within the content (re-writing existing links rather than inserting awful links on a word match basis)
That last one is what I now do. Is it as profitable as running banners everywhere? No. But it is the highest possible engagement with some revenue, and if one focuses energy on reducing costs instead it can work well.