Over the past few weeks I’ve researched and contemplated a few things about the internet, the state of e-commerce, and the future of the web. I’ve asked myself whether the “freemium” business model has a future and what would the web look like without ads? For a little more backdrop on this topic read the article titled “There are no free lunches on the internet“, by John Naughton at The Guardian.
Typically, most internet start-ups jump on the get-big-quick-by-making-it-free bandwagon and subsequently find themselves monetizing the business with advertisements galore. Google did it, Facebook is doing it, and Twitter is trying. Countless others have too, some wildly successful (so far) and other not so much. As I look forward to launching a couple small start-up ventures myself in 2012, I’m very much guilty of adopting this freemium model to help fast-track subscriber growth and product usage. Still I feel like there must be a better way to monetize without having to litter every piece of web real estate with advertisements and diminish the user-experience. I know, I know, I can hear you saying right now…just build a high-quality, desirable product and people will pay for it. Of course! Well, it’s not that easy. Heck, I believe Apple make some of the highest quality products on the planet, but they still advertise.
So, the multi-billion dollar question is, could there ever be an internet without ads? In theory, YES! It could happen. In reality, no. Ads will still be around and remain on the web for a long time. However, do expect them to have a radically different appearance and messaging format. Ads will not be dynamically placed in neat little designated spaces within pages on the web. In the future you may purchase something online without even knowing it was directly related to an ad, partly because it didn’t even look, feel, or seem like an ad in the first place.
The traditional model of having distinct boundaries between content will slowly give way to more content/ad hybrid models, subliminal messages, or something similar to product placement (like we often see in music videos and movies). In the coming age of HTML5 websites, web apps, and mobile apps, the freemium business model could become less necessary. If traditional online ads can no longer be directly correlated to sales or revenue, and in some cases be seen as ruining the user experience, they will become less important, less valuable, and less prevalent. I think a growing number of people will find value in paying for content again to eliminate ads, speed up or enhance their experience. The typical consumer has already grown immune to cold, intrusive, non-customized, non-creative ads, and they rarely ever click on them anyways.
The Internet of the future will have LESS ads, thankfully! Yes, that’s a prediction coming from someone who makes a living at a company delivering millions of online display ads every month. Although my employer (FetchBack) focuses on retargeting, which actually is a little different. Retargeting is not front-end selling, cold ads, or intrusive messages, it’s subtle reminders to people who left websites without buying. Ultimately, an HTML5-based web will make advertising more ubiquitous, embedded, subtle, targeted, and relevant. Trends in social media, online consumer behavior, and the ease by which people can access information will force online ads to be more passive and non-intrusive. As such, online ads will be considered almost exclusively for their branding aspects rather there ability to convert (you know that whole Impression vs. Clicks debate). Also, in order to remain effective, online ads will need to become more informational and referral based. That’s where social media and the social graph come into play.
As a result of everything I mentioned above, Google+ and Twitter could quite possibly be the new search engines by 2015. With information being posted, shared, commented on, +1′d, followed, and indexed, these open social platforms are quickly evolving into 3-dimensional search engines, with real-time, human-derived dynamic content. Social Search will offer far better content than Google, Yahoo, or Bing SERP’s which are basically just links gathered by an algorithm, influenced by hard working SEO experts and paid advertisers who bid up keywords. Search is still important and always will be, but just like keyboards are still important today even though nobody uses typewriters anymore.
Thus, advertising as we know it, I’m afraid to say, is obsolete! Who needs to be informed about a new product when the means by which to learn about something new or desired is now in the hands of the consumer. Anyone can search the “long tail” now, tap into their social networks to get advice or recommendations, and navigate a review engine to start researching products or services they’re in the market to buy. Information overload these days is a big problem- it causes people to only trust what they find on their own, or what is referred to them by trusted sources (not ads). In the information age, the consumer already knows about your product or can find it with a few clicks of a mouse. We’re at a point where companies can actually bypass ads for use in direct selling. There’s too many alternative ways now to reach sales goals, plus most consumers already ignore direct sales ads anyways.
That said, I do still see long-term value in advertising from the perspective of branding, thought-leadership, and retargeting. However, the value of most other forms of “front-end” online advertising and direct selling will be diminished and commoditized as mentioned in Eric Clemons article on TechCrunch back in March 2009 – Why Advertising Is Failing On The Internet. Mr. Clemons is Professor of Operations and Information Management at The Wharton School of the University of Pennsylvania.
Yes, there will always be new companies who need to advertise new products, yet these companies are starting to adopt more creative and noble ways, outside of online ads, to accomplish this task. Being visible, genuinely educating the consumer, providing facts and unbiased information, and then retargeting them appropriately will deliver a trusted lead flow and actual sales. The need to promote, educate, and inform consumers will be key as the means by which to introduce a commercial product or service shifts from 1-way interruptions and misdirection, to more social, two-way conversations generated from the bottom up, not the top down.
In the end, I think everything will revolve around engagement, delivering the right message at the right time, at the right frequency, when people are most receptive, and educating, rather than selling. This must be done in the most creative, thoughtful, and non-intrusive way too! It won’t be easy, but tools do exist to manage this process effectively, and they’ll only get better over time.
What do you think? Is an internet without ads desirable? Is it possible? Would you pay $10 per month for Facebook to have it ad-free? What about Google, Twitter, or any web app or service for that matter? What’s been your personal experience with online ads? I’m curious to know. Post your comments below!
UPDATE [January 10, 2012] : So no longer did I write this post and here we have it… Google Merges Search and Google+ Into Social Media Juggernaut
It’s already happening, sooner than expected! Google+ and Google Search are becoming one. Although I assumed Google+ would over take Google Search, it looks like the later is just being integrated into the former. Look out Facebook, the battle has just begun!
Hi! My name is Ryan and welcome to my blog. I'm considered somewhat of a tech-geek, entrepreneur, and free-thinker all rolled into one. I have a passion for 
