Why? Businesses ad spend budgets aren't going to be reduced simply because ads no longer track people. The same amount of money will go to advertisers. So long as ad companies can deliver a better return than other forms of advertising that competes for those budgets the online ad companies will be fine.
If advertisement be less capable of generating new customers, then it is less valuable.
The amount of money one can sell an advert for to the advertiser is of course related to expected return value for the advertiser of that ad.
If it be lower, due to less efficient targeting, then he will not be willing to pay as much for the same advertisement.
To be clear, I'm not saying the above effect will definitely happen, only pointing out that other outcomes are possible. In practice it will be some combination of the two.
The value something provides is relative to other things you might buy instead. If I have an ad budget of $1m, and I can't spend it on targeted ads then I'm going to spend it on the next best thing - if that's non-targeted ads then websites will still get my $1m.
The very reason that adverts are then worth less, is because advertisement budgets will go down, given that advertisements provide less return for their money.
It's not an assumption. I've worked in web stuff, including a lot of ad-driven businesses and businesses that buy ads, for a little over two decades. If one technology is removed businesses will spend the money on a different one. They will never step back and say "Oh well, I guess we'll have to spend less on advertising now."
It's even reasonable to believe a reduction in the effectiveness of ads would get companies to spend more on adverts in order to maintain the same level of growth.
Of course they do, what weird assumption is this?
If we lived in a world where advertisement was twice as effective at generating new revenue, far more money would be spent on it; if we lived in a world where it did nothing, no money would be spent on it and companies would search for other means to get new customers than advertisement.
It is certainly not as though the advertisement budged that companies have simply be a number they cling to on religious principle, rather than a number they have decided upon based on their perceived value of advertisement.
Even if you fully believe that privacy invasive targeted advertising is “the most effective” advertising, if it goes away the second best form of advertising will then become “the most effective” and will eat the lions share of the advertising spend. Or perhaps the market will dictate that instead of “targeted ads”, the most effective strategy will be to split the old google/Facebook ad spend across a combination of older (or newer) ad forms.
Toyota still want to sell Corollas. TAG still want to sell watches. So long as there’s a form of advertising that’s better than not advertising at all, the aggregate of all competitive sales teams will work out how to soak up all my budget somehow. Something will still me the most effective advertising. They’ll still spend their money to get more of that.
(If it turns out to be billboards or movie product placements or something, that’ll suck for web people who’s only possible way to sell advertising is banner ads, but that’s a different argue,ent...)
The reason non-privacy invasive advertising is worth less is that tracking is more effective, so it changes the balance. If tracking becomes less effective, advertising money is more likely to go elsewhere than disappear.
And usually content created for profit is quite untrustworthy, I prefer content created out of passion. It's the ad based content creators who are lacking in diversity, not the passionate creators who go in deep the rabbit hole.
Also, there's nothing wrong with ads, but they need to be topical to the content at hand, not targeted to users.
Both examples you listed are products that are feasibly created by the many small contributors. Many products cannot feasibly be created in such a manner and rely on some manner of income to remain feasible.
There are quite a few content creators that are capable of producing content because their efforts are supported by advertisement. It would be hard for them to operate on the many small contributions-model.
> And usually content created for profit is quite untrustworthy, I prefer content created out of passion.
Few men enjoy the luxury to devote so much time to their passions when other parts of their time are allocated to securing the income they need to feed themselves.
> Also, there's nothing wrong with ads, but they need to be topical to the content at hand, not targeted to users.
This situation would indeed benefit the visitor more; it would not benefit the advertiser, nor the middleman, nor the space where the advertisement stands.
I have a feeling that to some extent this part is made unnecessarily hard due to how the capitalistic economy insists on employing all available resources in “productive” pursuits of producing even more content...
Perhaps not “content” all the time. But surely a lot of resources are spent towards wasteful, if not directly anti-productive, ends. Trading those for more leisure time might very well be a boon for economy
Ad spend is not going down. Yet publisher revenue is stagnant or worse. Look at every media outlet scaling back and/or crying poverty. This is the gateway to most of the worst of the advertising ecosystem. Nobody WANTS sleazy/creepy/loud/excessive ads on their sites, because it's their brand being ran down in the end. But it's seen as the only way to keep their heads above water.
I suspect the real story here is the growth of the middlemen and platforms. In 1990, when you called up your local newspaper and ordered a quarter-page ad for $50, the publisher got every cent of it. Now, you buy $50 of PPC ads, it gets routed through several layers of cross-selling and arbitrage, and $5 is actually distributed to publishers.
I'm surprised nobody's built a mutually owned co-op ad network. That would allow the participants to recapture most of the value lost to third party intermediaries. With so much less revenue leakage, they could offer tamer adds that paid as well as the current 82 banners, full tracking, and a chumbox design.
If advertisers can't violate one's privacy, that simply means they will pay less to the websites one uses, and that will lead to its quality deteriorating, or even more extreme content filters to appease advertisers and remain afloat.