Tuesday, August 10, 2010


This is a slightly awkward post to write since it's a bit of a complex topic, but let's go with it anyway. This post is about ads.

A lot of people pop up talking about how much they hate ads, but in most places I visit, an equal number of people pop up stating "how else are they going to make money? Ads are a necessary evil!"

The second group is wrong. Or, rather, the second group will eventually be wrong.

There's a lot of talk about how to make money on web content, and in the end most of it devolves to selling ads. However, ads have some serious weaknesses and are getting weaker.

People talk about an "attention economy" and talk about how ads serve that purpose. However, in my life, I have never paid one penny due to a web ad. The only reason my visits have been profitable is because those places have, in turn, rented out more ad space. This stack of cards is eating itself: with no money going from me to them, there's no way it can turn a profit. All those ad payments are wasted money.

Now, there are plenty of people who do click through on ads and end up buying stuff. According to most of the ads I see when I turn adblock off, they're middle-aged or older, and apparently very concerned with either the whiteness of their teeth or the reliability of their servers. This has pretty much been the case forever, along with the third leg of the triumvirate: toys.

That's changing, at least for the first two legs. The network is growing denser. These days, 99% of the things I buy (aside from the staples such as coffee) are bought due to a personal referral from any particular person that I think has their brain on straight.

This isn't a "oh, the ten dollars I have, I spent on my friend's indie game!" I'm not a college student, I make a good living, I buy a lot of stuff. Books, games, and kickstarts, mostly. I buy based on things people tweet, post about, reference, mention: if I need server space, I go with someone's personal recommendation. If I ever want snake oil, I'll buy the brand the people I know recommend.

It's always a mistake to think that the way you do things is the way everyone does/will do them, but in this case, I can't help but notice how amazingly stress-free my consumer life is. The web makes it really easy for people to tell you what they liked, and it makes it really easy for you to ask for suggestions if you're looking for something specific.

But more than that, it's also extremely efficient. It's very rare that something I'm interested comes out and I'm unaware of it. Virtually every indie game is on my radar, a massive number of indie comics and music, swag and youtube videos of all varieties. Not because I spend all my time trawling for this stuff, but because I am in a network where if each person mentions they like one unique thing that appeals to me, we'll run out of unique things long before we run out of people. It's an effortless network that builds up over time, and it's not me-centric. It's disperse and noncommercial and few people make so much as a dime on participating.

The end result is that it's actually impossible to advertise to me meaningfully. I'm already aware of all the things with merit, because someone, somewhere in our network, knows about it.

What I'm trying to say is that ads are a kind of constructed contextual web that tries to draw you to stuff. However, that web is inferior in every way to a web made up of individuals tweeting and blogging.

When I look at it, I think there's a bit of complexity to it. I don't know how common a completely sufficient setup like mine is. I think high-schoolers, for example, might have a hard time creating such a web despite being even more familiar with the technology, simply because their web will be strongly biased towards "tight" links. Friends, family, people you meet every day. Their viewpoints and encounters are unlikely to be diverse enough to capture all the content that humanity has to offer. Also, the kids may consume more content than I do (although that seems unlikely) meaning that their web is smaller and their needs are larger. Lastly, it may be that kids are just more susceptible to getting scammed by ads. I think adblock should be a requirement if you have kids under 18 in your home: they haven't built up a resistance to those sorts of compulsions.

So it may be that ads still "sell" to these kids.

I know ads still sell to a lot of adults.

But I can't help but think this is temporary. I can't help but think ads are an inefficient scaffold that's becoming more inefficient every year.

What moneymaking method will replace them?

I dunno. There's something halfway between swag and donation that doesn't exist right now, something that needs to exist. But even then, it may be that nothing replaces them. Maybe it's a hobby until you have a fanbase sufficient for swaggifying. There's nothing inherently wrong with that.

What do you think?


Mory Buckman said...

I suspect what will happen, when ads get closer to losing any usefulness, is that the advertisers will have to get more insidious. You've got a closed network of people you trust, yes? Nothing outside that network can get to you. So a crafty advertiser will handsomely pay some blogger you read, so that he'll advertise whatever they're selling as a seamless part of the blog. I'd like to say that we're smarter than that, but if done right both the advertiser and the blogger could be much richer and none of the readers would catch on.

Craig Perko said...

Well, that's already happening. Not just in outright payments, but subtler things like extremely good treatment at a con or similar.

But it's very rare for a blogger "on the take" to keep his balance. Normally, they basically become ad space, and are dropped from the network.