Adtech and advertising

First I thought I was right, then that I was wrong and now I think I might have been sort-of right all along.

When the web took off some people believed micro-transactions would be the viable financial model for content. I didn’t, I believed advertising would.

Then, as the tech got more and more advanced and as ads were no longer sponsorships but instant negotiations in a race to the bottom, I realized that this was unsustainable. Only the biggest players would be able to earn enough to support their generation of content, which let to click-baiting, escalating fake news and much worse.

And now I realize that I was wrong to think of those two different things as the same. Advertising and adtech are not the same, even if the visual result is an ad. I had unconsciously reached this conclusion some time ago but it took me until I read Doc Searls’ article before I realized it. Here, in a shortened version (read the entire post):

First, advertising:

  1. Advertising isn’t personal, and doesn’t have to be. […]
  2. Advertising makes brands. […]
  3. Advertising carries an economic signal. […]
  4. Advertising sponsors media, and those paid by media. […]

Second, Adtech:

  1. Adtech is built to undermine the brand value of all the media it uses, […]
  2. Adtech wants to be personal. […]
  3. Adtech spies on people and violates their privacy. By design. […]
  4. Adtech is full of fraud and a vector for malware. […]
  5. Adtech incentivizes publications to prioritize “content generation” over journalism. […]
  6. Intermediators take most of what’s spent on adtech. […]
  7. Adtech incentivizes hate speech and tribalism by giving both—and the platforms that host them—a business model too.
  8. Adtech relies on misdirection. […]
  9. Compared to advertising, adtech is ugly. […]
  10. Adtech has caused the largest boycott in human history. […]

I was surprised by how big a cut the intermediators take with adtech (#6): 60%. That article explains further that another 37 percentage points is lost as well.

Searls ends his article with 4 tips which I will also quote in truncated form:

Pro tip #1: don’t bet against Google

Pro tip #2: do bet on any business working for customers rather than sellers

Pro tip #3: do bet on developers building tools that give each of us scalein dealing with the world’s companies and governments

Pro tip #4: do bet on publishers getting back to what worked since forever offline and hardly got a chance online: plain old brand advertising

Oh, and by the way, I think the Patreon model has shown itself to be a viable financial model. We will have to wait and see if it can remain so.

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