A Deep Dive Into The Immediate Fate Of Online Advertising

by Shelton Bumgarner

Let’s take a serious look at what comes next when it comes to funding online content. Pretty much, the entire business plan of online content is based on a 25-year-old lie. It’s a fundamental, systemic lie that will be extremely painful to overcome. First, we have to get a few things out of the way — first, with the rise of AR/VR the very nature of online content is about to change dramatically. A back-of-the-envelope guess is that within about 5 years, yet another major shift in the consumption of online content will have occurred and everything will be rebooted in the sense that we’ll be talking more about the battle to the death between the video game industry and the movie industry, not the fact that the newspaper industry — other than The New York Times and The Washington Post — faded into nothingness.

The lie that online business plans are based on started in about 1994 when three things happened. One is, Wired Magazine under the guise of Hotwired produce the first banner ad. The stakes were pretty low and so no one really gave much thought to the basic fact no one, but no one cared about online advertising. Online advertising is a lie, pure and simple. And, really, the only metric you can base it on is engagement and maybe a half-assed amount of general mindspace and branding. In short, online advertising is useless and has been since its inception. Now, this did not happen in a vacuum. At the same time, Netscape revolutionized pretty much everything when it gave its signature product, Netscape Navigator, away for free. (Yes, I know that “free” came with conditions, but to the average consumer it was free.) That established in the consumer’s mind the idea that you could get something for nothing online. About this same time, in the rush to make money in the dot.com bubble, content companies — using the lie established by Hotwired and facilitated by Netscape Navigator being free — gave away their most valuable product, their content, for free as well, hoping to make money off of online advertising.

So here we are, 25 years later, and the little white lie of Hotwired is now the basis for an enormous online advertising industry. The whole thing is shit. It’s complete and total bullshit. And that’s why I would suggest that sometime in the next five years three datapoints will crash into each other in a pretty dramatic fashion.

First is, the end of net neutrality. Soon enough, the potential fiduciary upside of bleeding consumers dry will simply be too much and there will be a never-ending mixture of plans for speeds and content. So you’ll have the option of a Netflix & Chill plan that gives you great speeds for video, but at the expense of shitty speeds for, well, everything else. And the list goes on. This will strike horror in the hearts of New York City media people, so there will be a lot of wheeling and dealing to piggy back on different plans. So just for subscribing to Xfinity, you’ll get, say, a limited-time subscription to The New York Times, or whatever. Another aspect of this I suspect will be in their craven desire to squeeze every last drop of blood from consumers may at some point market a plan for “super fast email” that will be the first step towards a de facto tax on email which, given how Republicans have completely screwed us over by cutting taxes on the wealthy, Congress may at some point have no other option than to actually officially put a tax on email of some sort. (That’s kind of hazy and iffy, but it’s something to think about.)

Meanwhile, there’s the problem of abuse of data on the part of Facebook. Facebook may eventually come under enormous strain to at least give people the option to op-out of Facebook’s original business model and as such that will be a huge turning point in how consumers interact with the main utility of the Internet — Facebook. The ripple effect of this can not be overstated. If Facebook starts a subscription option — even if it initially is just an option — all bets are off. The very nature of how people interact with online content in a very basic fashion will change and what would have happened in 1994 had Netscape charged for Navigator will happen now — people will be conditions to pay for any any every service they interact with online.

Now, at some point these other two things will come crashing down on the lie at the center of online advertising — it doesn’t work. So, with these two other things swirling around, what should have happened 25 years ago, will finally happen. Various subscription models — in the context of the end of net neutrality — will spring up and what you’ll likely see is something very akin to AOL et al in the 1990s. Once you establish that consumers have to pay for online content for each and every Website they access, content providers and service providers have a vested interest in working together to promote content. So, in one scenario, when you sign up to Verizon’s Internet, you would have many, many speed and content plans to choose from. So many, the average person not only will be extremely confused, they will be screwed over unless they read the many explainer articles produced by the now thriving online media industry. So, in other words, what happens is — there might be a profit sharing program between smaller Websites that would piggy back on the plans thought up by the big boys. That might be, maybe, how a lot of smaller Websites will survive in the first place.

I would go so far as to suggest that it’s even remotely possible that portals like Yahoo might suddenly become relevant again for no other reason than it would make a lot of sense to pay $24.99 a month for access to aggregated content found within a portal than be nickle and dimmed to death subscribing to dozens of small Websites. Maybe. That’s a possibility.

Again, let me be absolutely clear — this is just a back of the envelope guess for the next five years. Anything beyond that and we’re talking about AR/VR and a completely different way of interacting with online content. We’re going to be fighting over the idea of “immersive media” and if the “gaming killed the movie star.” Once you have immersive media in a meaningful manner, all of this fighting over how to fund traditional text media online is rather quaint. Once you are all but forced to engage with advertising in an immersive media environment, well, what’s the point of what I just talked about in the first place?

But immersive media is a little bit down the road and the exact nature of it is very much up to debate. I do think, however that very soon, things we’ve all taken for granted about online content will fall by the way side in a pretty abrupt manner.

Shelton Bumgarner is a writer and photographer living in Richmond, Va. He is working on his first novel. He may be reached at migukin (at) gmail (dot) com.

Author: Shelton Bumgarner

I am the Editor & Publisher of The Trumplandia Report

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