One way to look at this is that you're purchasing your own attention.
An ad supported site works like this:
1. They spend effort producing some content.
2. You want to give all of your attention to that content.
3. Advertisers also want your attention.
4. To support their efforts, the creator diverts a fraction of your attention away from the content to the ad and the advertiser pays them for it.
With this system, you basically bid and buy back that fraction of the attention diverted to advertising, and that money goes directly to the creator.
One really interesting aspect of this is determining what your own attention is "worth" on the open market. By building this on top of AdWords system, they can calculate that automatically. If advertisers decide your attention is worth more and want to keep those ads in front of your face, they have to pay more, which again goes to the content creator.
Brilliant? Is it brilliant to simply revert to how the free market is supposed to work, where consumers pay producers because they think the product is worth it?
Ad-supported sites fool consumers into thinking they're getting something for free, when in fact they're still paying, just indirectly . And not just the original straight-up price, but a host of additional costs[1]. Don't believe me? Where do you think the advertisers get the money to buy ad space? Of course it's baked into the products consumers buy from them. There is no free lunch.
What does it say about your product if users aren't willing to pay for it? What does it say about your business when you tell users its free but don't tell them you've hidden your charges in the prices of the products that are advertised? That it's actually costing them more?[1]
You speak of "free market" but we're not in the 18th century anymore; advertising is a foundation of modern capitalism, as much as (for example) banks and the whole financial system. The economy is full of "overheads" that you can hate if you only look at their downsides: when you buy some product you are also paying baked-in fees for credit card processing, subsidies for agriculture or fuel used in transportation, and many other things. Yet we put up with the banks, taxes, government regulations, and yes advertising too, because all these things have a net positive effect. Speaking of banks for example, we all hate banks but let's be honest and tell me if you could hope to buy a house without a loan: most people would need to first save money for decades, which very few people have the discipline to do, or the resources to do as they simultaneously have to pay rent. So the mortgage system is clearly better, it enabled way more people to afford buying houses and in time this improves the market for everybody via economies of scale etc. (well, for 99% of us anyway).
"Ad-supported sites fool consumers into thinking ...."
Maybe those ad supported sites just have to pay the server bills.
And what does it say about you if you want to use a product and not aren't willing to pay for it? Not even indirectly via ads?
> "Maybe those ad supported sites just have to pay the server bills."
The place where I buy pizza has to pay for the ingredients, the rent, salaries, etc. These costs and a reasonable profit add up to $18 for a pie, which I pay, because their pizza is worth at least $18. What if their pizza wasn't so good, and too few customers thought it was worth $18? Is it right for them to hand out "free" pizza in a box covered with advertising inside and out, and the advertised products get marked up $22 to cover the pizza cost as well as the advertising overhead and collateral costs[1]? Let me be clear: the customers are getting a pizza that costs $18 for "free", but $22 is added to the cost of the other goods they buy. They don't realize this and the pizza shop is taking advantage of this ignorance.
> "And what does it say about you if you want to use a product and not aren't willing to pay for it? Not even indirectly via ads?"
If you're referring to me, I'm totally willing to pay for it. If you mean people in general, they fall into three categories:
1. They are willing to pay for it. They wish there weren't ads, and switch to ad-free, for-pay products when available.
2. They are willing to pay for it, but are happy to take what appears to be free.
3. They are not willing to pay for it, but are happy to take what appears to be free.
Both #2 and #3 don't realize that instead of being free, it costs a lot more. Or they are too lazy to find a for-pay product. Or they think they don't buy advertised products and are happy to mooch off of others.
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[1] If I don't buy those products, someone else must be, in which case they are subsidizing my pizza. I'll bet the effects are regressive, in that people with lower incomes end up subsidizing people with higher. In any case, on average we all pay for the true cost of the "free" product plus the previously mentioned overhead and collateral costs.
Does Hacker News advertise? The pizza place I love doesn't advertise. Not even Google or Facebook advertise, and look where they are. Ironically they are guilty of hurting consumers, democracy and the free market as I've explained: by relying on ads rather than getting their money from us honestly.
Good products get found the natural way: customers tell other customers. Why? Because the product is good!
Most advertising is manipulation of perceptions of goodness. Or about using dominant market position and revenue to maintain that dominance, drowning out better rivals who can't afford a similar ad budget (Advertising people are honest about this and call it a moat).
Need to explain your product or its benefits? Put up a website. If the claims are true, customers will pass the link around. You only need to pay to get someone to insert your product in the grapevine if your product isn't good.
That's amazing. Google has taken over the web with ads. And now that everybody hates ads, it's suggesting you remove those ads with another Google product. It doesn't get any smarter than that.
(this is not sarcasm, I actually think this is amazing in terms of strategy)
Yeah, not only that but it's not easy for an org as big as Google to experiment with stuff like this when they have a huge advertising operation that's trying to sell more ads, not less. Moves like this have to be top down driven by a strong leader.
Doesn't matter money wise. Google will make its buck anyway. They confess that only part will go to the content owner. So business/strategy perspective, not much different for regular google ops. Transaction by user, rather than advertiser, is the only difference.
> And now that everybody hates ads, it's suggesting you remove those ads with another Google product. It doesn't get any smarter than that.
...but how will they grow revenue in ~5 years when everyone has paid to remove ads?
Won't they put themselves out of business because if nobody is looking at ads, nobody will be paying for ads, so then there won't be any ads to display, and everyone will stop paying to not see ads.
I don't think this will happen. Most people will probably cope with ads. So Google will keep making business that way.
But the ones that don't want to see ads may pay Google instead of using AdBlock. Also, some publishers may decide to use Google's solution instead of an in-house one, which allows Google not to be bypassed.
If all that was to fail, I'm sure Google will find new problems to solve and more ways to grow revenue.
It's just weird because those are sites that people only go to because they are too cheap to pay for quality content. Why would they pay for these sites?
They're starting incredibly small with 10 publishers. Users have a bigger incentive to signup when ads will be removed from a large number of sites they visit. For example, if I just use Imgur, why don't I just upgrade to Imgur Pro for the same price, get the ads removed, and the extra Imgur perks? Now, if Google ads would be removed from a dozen of the most popular sites I visit, then yes, I'd consider it. I'm hoping this doesn't fail due to lack of publishers. Google has a tendency to lock everyone out for too long, so I'm worried it'll be another invite only flop.
so if I am reading this right this is a potential competitor to patreon?
Interesting concept. Let me pay some money that gets split between the sites I actually visit and get out of seeing ads - I wonder how many users of adblock today would use this instead. I guess the problem is that google isn't the only ad network.
Patreon has the key advantage of creating a direct emotional link with one person, or a small group of creators. Asking people to support a mostly faceless company is a much harder sell.
There's an enormous gap between Mashable and Jim Sterling, or Red Letter Media. Creating something people care about is doable, but being someone that people care about is far more difficult for any of the listed publishers.
I agree. When it comes down to it, I would pay 100$/m for the top 10 ad supported websites i use the most.
The thing to keep in mind is that the ad supported model is amazing for trying things out, so we really need both.
Having used gmail since I was in high school, I would not have been able to pay for it then, but nowadays its invaluable, and 10$/m is a drop in the bucket.
I use Skype, gmail, google search, youtube,
Skype == $10/m
Gmail = $5/m
Search = $20/m (Information is valuable)
Youtube = $20/m (Equivalent to cinema)
Rest is made of long tail. These are what I would be willing to pay for these services
< how much would you pay?
$0.00 Zip. If I have to pay, I go away. Looking back to my pre HTML Labs days, I don't think I ever go to the same site(s) longer than a year or so. Nothing regularly.
I had an interesting self discovery. After I insulted a coworker for not being able to think for himself; always parroting Rush, he challenged me to listening to his radio show for one week. I did. I was surprised at what I learned.
I never, ever listen or watch commercials. It's subconscious. I could not change the radio during commercials as I had to listen to his show. It KILLED me. I NEVER listen to commercials.
Then I realized I flip if I watch TV. If I listen to radio, I change the station automatically when I hear a commercial. YouTube, turn down sound. Automatically. TV shows, watch after it starts so I can fast forward via Tivo.
Same goes for anything pay online. See a pay requirement? Go away. I realize I don't buy any online content; No site I have ever gone to is worth paying (directly).
By the way, I pay for internet access 4 ways each month; cable ($50); two phones ($100); library internet access ($~100 via property taxes used to fund town library). I pay enough.
How does this work for me as a user? If I pay Google contributor $1 a month, do I see any ads at all in participating sites? Or do I only get a limited number of impressions ad-free, to encourage me to increase my spending?
How does this work for publishers? Do they get paid a fixed amount per impression? Is it proportional to the time spent on the website? Does the website benefit from having higher spenders visit their website?
It is encouraging to see Google working on a new product to help publishers generate revenue, but it looks like it only disables Google advertising. Most publishers use multiple ad platforms. Unless those are disabled too, users may question the value of donating money if it's not creating a true ad-free experience.
In other words, you want free content. But content costs time and money to produce. And content is inevitably colored by the source of the money. When the source is advertising, the content you receive is optimized for advertising. Of course, this is not a problem if you're happy with the content you're getting now.
Because they had said they track me to show me those ads and now that I've paid them to remove those ads, I hope they can stop tracking me, shall they?
It looks like they keep an ad-shaped piece of the page to avoid breaking the layout of the page. Does the number of ad spots change the amount they get per page view?
10 sites the user visits daily (for argument's sake)
3 pages visited per site (for argument's sake)
30 days per month
=>
Each site: $3 * 1/10 * 1/30 => $0.01/day/user
Each page: $0.01/day/user over 3 sites/user/day => ~$3.33 CPM.
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Publishers right now average higher (~$5, up to $15) CPM, so this sounds like something that will lose them money for a non-biased set of users. Of course, maybe this selects for folks who otherwise wouldn't click on ads... I guess we will find out. It could also just select for publishers that are not able to monetize their content effectively.
I think any site that wants to have an ad-free version that subscribers pay should do so without Google's involvement. I cannot imagine anyone voluntarily giving money to Google for something like ad filtering when ad blocking extensions to Google's own browser accomplish this for free. What I do see as realistic is someone loving The Onion or WikiHow so much that they pay for additional features that enhance your ability to use that site or enjoy your experience on it. For example, Urban Dictionary offers an option to print any definition onto a t-shirt or mug (although I don't know how successful this model has been for them, especially considering how vulgar most popular UD definitions are).
Right now content creators are implementing freemium in an unattractive way - I completely stopped reading wsj.com after recent changes to their paywall, and I will immediately close a news article that throws a video in my face. But if the motley banners of Adwords are merely converted into "thank you" messages after I pay a couple bucks every month, the website hasn't suddenly become attractive to me, just less unattractive.
One problem with paying individual websites is that you don't really want to create an account, providing your credit card information, to dozens of sites do you? What you suggest works well for heavily used websites (e.g. my daily feed of Ars Technica) but completely fails for stuff you visit every one in a while (e.g. my every-couple-months visits to The Onion). The existing ads infrastructure is almost perfectly suited to solve this problem.
And when you compare this to ad blocking, hopefully you realize that ad blocking is not the most ethical thing to do; you are effectively stealing content. Most ad-supported websites clearly forbid this with TOS wording like: "The copying, reproduction, ..., or other use or change by you, directly or indirectly, of any such Website Content, including but not limited to the removal or alteration of advertising, is strictly prohibited" (Ars). Not all websites are good players either, but if the advertising practices of specific sites are bad then your only ethical choice is to not visit them at all.
An ad supported site works like this:
1. They spend effort producing some content. 2. You want to give all of your attention to that content. 3. Advertisers also want your attention. 4. To support their efforts, the creator diverts a fraction of your attention away from the content to the ad and the advertiser pays them for it.
With this system, you basically bid and buy back that fraction of the attention diverted to advertising, and that money goes directly to the creator.
One really interesting aspect of this is determining what your own attention is "worth" on the open market. By building this on top of AdWords system, they can calculate that automatically. If advertisers decide your attention is worth more and want to keep those ads in front of your face, they have to pay more, which again goes to the content creator.
I think it's brilliant.