Why The Answer Is So Often Ads

“The question of how to be compensated is a live one,” said a senior exec at a consulting firm, who exchanged anonymity for candor. “Clients are saying to agency execs ‘well if it’s going to take you 20% less time to manage our media thanks to AI, does that mean we’re going to see a 20% reduction in fees?”

There are extremely compelling reasons to consider diversified revenue streams. Expanding revenue beyond ads allows for the simple fact that people’s preferences change. Digital marketing experts estimate that Americans are exposed to around 4,000 to 10,000 ads daily. There is a point where you can no longer stuff more ads down a consumer’s throat;... See more

First, some background. I ran search ads at Google for over a decade, and I could see the inexorable pressure to take up more and more space with ads. It’s one of those things where there's just so much money to be made that people come up with cleverer and cleverer theories to justify why it’s okay.

The problem ‘akshually’ is that contemporary programmatic advertising is too efficient, and the ads sales people at The New York Times selling outrageously priced ads on a fixed, rate-card basis were selling media not really worth the cost (when measured at the level of precision the internet makes possible). Decades worth of such advertising mispr... See more

The distribution channels that underpinned the rise of today’s Internet giants have dried up. Google, Facebook, and Amazon serve as a triopoly that dominates online advertising. The three accounted for 90% of US digital advertising in 2020, up from 80% in 2019. The arbitrage that once existed on these platforms has more or less disappeared and CPMs... See more