"Reinvent your industry with this one weird old tip."
Yes, it was greed, and yes, of course it led to a predictable outcome.
The smart thing for the industry to do would be to create a code of practice and do a deal with the ad blockers to allow - not force - people to view ads that add value to their lives. Print publishing used to make this work fairly well.
But the industry seems incapable of acting with anything that passes for strategic intelligence. If it didn't treat customers like exploitable prey, it wouldn't be in the situation it's in now.
I do know that I've been quite happy to stop visiting any site that refuses to show content to browsers that adblock. Such sites are almost always low value, and their refusal to serve webpages is a good reminder that the content isn't really a good use of my time, anyways.
If more websites I value more highly start doing this, I'll probably just end up buying subscriptions to turn off ads.
Patreon seems to be having a positive effect here, at least with some sites. Webcomics, personal blogs, and other small sites can really thrive on donations alone, and it's heartening that systems are finally arriving to facilitate that specific business model.
Off the top of my head maybe a good example is http://popville.com/ which is a local DC blog. The guy who runs it is a little controversial, but the site is extremely well-read and useful and 100% ad supported. http://arstechnica.com/ is great too. And then, ya know, stuff like Twitter wouldn't really work if you had to pay to use it. Or do Twitter ads not count?
I have no real issue with people who want to put ads on sites. My tolerance ends, however, when they try to moralize to me about how I render hypertext on my own machine. My attention and mental health are worth more to me than the ad impression ever could ever be to the marketer. Occasionally a site will refuse to serve articles unless I turn off my adblocker, and every time I just close the tab with no regrets.
This is a classic case of tragedy of the commons. Bad actors in the advertising space rush to extract the most value out of internet ads by continually pushing the frontier of obnoxiousness. Because, 'hey if I don't do it, someone else will'. And much like the tragedy of the commons with overfishing, they have to keep increasing effort to make up for the decline in effectiveness as they 'overfish' internet users.
Even if you're an ethical advertiser you end up getting harmed by the unethical ones as wide swathes of people start using ad blockers, and the ones that don't are ad-blind anyway.
But your solution is right and that is why native ads like Taboola, Outbrain and Revcontent are winning. As times goes by having ads that are not distinguishable from content is what might help these publishers.
PS. There is one more serious side effect of small publishers dieing out. It means Facebook and Twitter might have much more influence public opinion and they may not support diversity of opinion the way an open internet did. Facebook is already taking a pro-migrants stand or Twitter is also helping censor criticism of religion. Survival of small publishers is important.
Ah yes, Taboola, that was it. About a year ago, Taboola was specifically what caused me to install ad block.
I generally didn't find ads too horrible. My browsing habits just never sent me to sites that had really obnoxious ads, and in certain cases, I specifically would avoid sites like Sourceforge, Softpedia or Download.com, because of their fake download link ads. For the most part, I tolerated (and largely ignored) the existence of ads. I've actually even legitimately clicked on ads before (fewer than 10 in my life, and only for something work-related), though I'm not sure it's ever caused a purchase.
Then these stupid "You may also like" things started appearing everywhere, very similar in style to actual real "related articles on this site" content. That's so misleadingly close to the fake download button ads that it was really getting on my nerves. Then the content quickly got obnoxious, with celebrity gossip, and the one that totally put me over the edge was some gross picture of some type of medical problem which I was seeing multiple times a day.
Honestly I even initially started out with just the intent of blocking Taboola only, but they do things to presumably make it harder to block, and so it was easier just to leave on the default blocklists (which had already done the work to block Taboola everywhere) and everything else was just a casualty of that working.
So are "native ads" like Taboola the answer? I sure hope not, because I am willing to spend a lot of energy to never see that nonsense again.
At the end of the day, it's a viable business model. It's not about the money in of itself. But if you can't support yourself and your business with the "right level" of advertising and you can't persuade people to give you their money any other way, your business model is failing, not advertising in of itself.
The (far) bigger problem will be using your friends against you[1]. Advertising by making various "credit scores" dependent on your friends using the "right" products will be very hard to counter. I suggest fighting it now.
If the ads stuck to the meatverse-equivalent style of static but attractive, I would be fine. But the overwhelming majority overwhelms the reader with animation, transitions, cover-ups, pop-over, pop-up, pop-under—how many pops do we need before we have enough?! And publishers have restored to covering up their just to force interactivity, so you can click through them and see more ads. Why is there a Read More link on this recipe page? Obviously I want to read more, that's why I visited this page!
It boils down to greed. The bar has been set so low to attract more and more advertisers to make more money. Frankly, if someone were ingenious enough to inflate the price for plain publisher-hosted ads, one to a page, that didn't overwhelm the reader, I'm pretty sure that person would soon be rich.