6 years ago, I wrote an article called The End of the Ad-Supported Web (please read it!). A lot of it is still right, and despite an ever-increasing presence of ads, we’re getting worse and worse content and less privacy. The collapse is taking longer than I thought, but it is happening.
What I got wrong is that we’re seeing the emergence of new types of ads that are getting more successful, maybe because they are, hopefully, more useful.
I am not talking about new formats. I am talking about the new trend marketplaces are increasingly adopting to curate and recommend “suppliers” who are paying to be more visible. Amazon made $14Bn in the last quarter of 2023, Uber expects to make $1bn in 2024, Etsy is making 25% of its revenue from these ads… etc.
Being “native” these ads do not lead to any privacy challenges, are nearly impossible to block (either by extensions or at the OS level), or to regulate. In fact, they may be impossible even to tell apart from non-sponsored recommendations provided by these apps. Arguably, if and when they are performance-based (the supplier only pays if they lead to a sale or conversion), they may still be able to maintain an alignment of incentives between the customer who wants the most relevant recommendations and the supplier who only wants to pay when they are making successful sales.
Of course, these new ads only become an option for marketplaces once the marketplace itself becomes large enough to justify “the take rate”, de-facto excluding smaller, indie web applications and websites, which means that nothing is replacing the revenue stream that traditional ads (banner and cookie-based) that fed them.