Jean-Louis Gassée, writing or Monday Note:
When finite advertising budgets are divided by an almost infinite number of Internet billboards, the revenue per ad tends to zero. As revenue from print ads continues to decline, Web ads aren’t picking up the slack.
We now have a race to the bottom where publishers use tricks (some say fraud) to generate advertising revenue. This leads to pages that are overloaded with ads that publishers no longer control, combined with the collection of the most minute crevices of user behavior, information that’s then pimped to advertisers who are constantly looking for more finely-tuned methods to target their ads.
Enter Apple’s content blocking APIs.
The good news: We’ll soon have ways to streamline our browsing experience and avoid being pimped to advertisers.
The bad news: Marginally profitable Web sites, which is most of them, will lose advertising revenue and plunge into the red. The big guys that have paywalls in place, sites such as The New York Times, Financial Times, or Le Monde, will be much less vulnerable. (More on the Web publishing landscape in the postscript.)
The whole piece is a thoughtful and worthwhile read. It paints a dark portrait of tough times ahead for content publishers. Where will the revenue come from? As ad blocking becomes standard practice, will mobile ads simply dry up and, eventually, disappear?
Is Apple building a news funnel where all payment for web content flows through their coffers? Will Apple steer paid ads through Apple’s mobile advertising platform, iAd?
What about sponsorships? Will those sorts of ads be blocked as well?
Interesting times are coming.