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From user experience to monetisation methods, publishers and advertisers need to innovate

There were two contrasting events that played out this year. On one hand, Facebook has been growing its massive user base, as well as advertising revenues, both driven by record high engagements.

On the other hand, Medium.com’s founder Ev Williams declared that advertising doesn’t work for him, laid off a part of this team and pledged to work hard to find alternative models for his platform.

The problem with content today

Content and advertising have come a long way from the beginning of the internet. Internet content was originally available at a premium. Low-cost newspapers commoditised their cost through ad sales.

The quality of the content seemed reasonably high, and the quantity of content generated was far lower than today.

Also Read: Something is broken in mobile advertising; here are the 4 rules to fix it

The internet today probably generates petabytes of content every hour. Almost all of it is supported using advertising, and therein lies the problem. Most content is treated as equal by advertisers who measure and buy impressions. And even though there has been a strong push towards buying audiences, it all boils down to Cost per click (CPC) and cost per thousand views (CPM).

Ad-tech has been failing us

Ads from outbrain and Google from a popular publisher

• The ad industry has been busy in figuring out how to make more money and has forgotten about user experience.
• The open RTB spec, which exchanges heavy amount of over a slow web protocol, chokes networks and adds to the additional consumption of petabytes of bandwidth each year.
• The technology feels like it is decades behind and the UX has not caught up in the age of Facebook Instant Articles.
• Ad-tech vendors often boast of how better they can bid or buy than their competition, how algorithms can deliver better results and so on. The fact of the matter is that such technology is now a commodity and it has also significantly failed to deliver the promise, except when large user data is available at scale.
• This is why you see two big companies  — Google and Facebook, both having significant user intent data — being the duopoly of advertising.
• Mainstream ad-tech players ad zero value to the ecosystem, provide little or no meaningful results beyond rattling off standard ad-tech metrics.
• Ad platforms also treat all kinds of content as the same, and this is fuelling the growth of fake news and fake content throughout the Internet, spreading misinformation and electing governments on the basis of that misinformation.
• Such monetisation makes genuine content a commodity, punishes quality publishers and puts them at the same level as the bad quality of content generated by thousands of fake websites and Facebook pages.

Ad-tech companies have invested too much infrastructure and time on supporting the RTB bloat, and with a small slice of revenue there’s has been very little room to navigate or innovate. No wonder we’ve seen dozens of ad tech companies, their IPOs, and their fortunes go bust and value plummet pretty dramatically in the last few years.

The future of content and the internet as we know it

So, what is the future of the Internet and content as we know it today?

The future of Ad-tech is in better user experience. User experience of ads on the content and user engagement with ads is truly important for ad-tech to survive in the long term. Ads can’t suck anymore.

Ad-tech Players need to truly innovate or die. Ad-tech players need to put their big boy pants on and figure out to look beyond standard exchanges and RTB, and learn to truly innovate. It is not enough to just be the middleman anymore.

Owning the user. It has become increasingly important to own the user as well — just ask Facebook and Google. This is why user owned ad-tech plays will become more common — Snapchat, Pinterest and possibly carriers like Verizon and less of players that simply function as middlemen.

Multiple monetisation methods are the way forward. The future of the internet lies in multiple monetisation methods. Services like Patreon will allow users to pay small payments to subscribe for specific content that they like instead of having everything available for free. Increasing paywalls on leading portals are a great way of keeping a certain content restricted.

Affiliate links provide some monetisation through the sale of physical goods, and data generated through these platforms will be used to upsell you other SAS services that you might need.

Also Read: 10 trends that will shape the future of mobile ads and marketing

However, ads based monetisation will continue to be relevant. The conversation is never going to be binary — and not all publishers have the capacity to rethink business models like Medium wants to. Ads will continue to be a subset of monetisation together with micro-payments/subscriptions for content.

Ads will remain relevant for only one reason: Customers will never want to limit their choices and someone will always offer a lower priced/free content access with ads and publishers will be forced to commoditise content in order to meet consumer demands. It’s a behaviour that will probably not change for decades to come.

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