Why Internet Ads Are A Dying Business Model


I started using the Internet in the early ’90s, back when almost nobody had a computer, and few of them had an Internet connection.  Since then, I’ve never once made a purchase based on unsolicited Internet advertisements, and here’s why.

I started building computers at a very young age, and have since spent a large portion of my life fixing other people’s machines when they break.  The number one problem is malware, which includes (but is not limited to) viruses, spyware, and pranks; with the first two being the most common.  Malware usually exists for one of three purposes, with the first being true of almost all malware: (1) someone is trying to scam/steal money from you; (2) someone wants to annoy you for fun/revenge; and/or (3) someone wants to make a political statement (vis carrying out a Denial of Service attack on someone whose political/economic activities they don’t like).  The number one source of malware is web sites trying to scam money out of you.  The number one way they do so is by advertising to you (often in ways that make you think they’re NOT advertisements), such that you visit their site; and WHAM! whether you know it it not, your computer is now infected.  (Sometimes just visiting a site gives you malware, and sometimes you have to download and run something from that site that they claim is good/harmless, but isn’t.  Beware any file ending in .exe, .bat, .com, .msi, .dmi, as well as anything that can be “installed” or “run”.  Yes, this includes “FREE GAMES!!!!!!!”)

If every person whose computer I fixed because they clicked on an ad paid $100 for it…wait, what am I saying?  They DID pay $100 (or so) in repairs for every ad they clicked on!  That, in a nutshell, is how computer repair shops stay in business: people who don’t know that ALL Internet ads are extremely likely to infect their machines with viruses, spyware, and so on–such that they will soon have their sensitive information stolen, and their computers rendered useless–do something they don’t know they should NEVER do on the Internet, and then bring their computer into the shop to have it repaired.  (Note: sometimes hardware fails, Windows/Linux/Mac OS screws up of its own accord, or someone falls victim to the dreaded PEBKAC error.  Usually, though, it’s because of Internet usage failure.)

This is why, in theory, movements in favor of allowing “respectful” ads and blocking all other ads (example: AdBlock Plus–a great browser add-on that everyone should have, despite its failures) are ultimately not realistic.  Even if an ad doesn’t play obnoxious sounds/videos at you, flash distractingly, open pop-up windows, take up half the page, etc., there’s never going to be any absolute guarantee that the content behind the ad isn’t fraudulent, in some way.  Nobody is capable of policing every advertisement on the web, so those who try to come up with software to detect “annoying” behavior and block only that, rather than truly investigating every web page that advertises anywhere on the Internet.  That’s just not realistic to expect from anyone.

So, what’s that mean for ad-based revenue?  You can probably guess: as more computer users realize that clicking on ads (and things that don’t look like ads, but really are ads) is what’s causing them to shell out money for computer repairs, and take effective measures to avoid doing so, it will become decreasingly profitable for web pages to host web ads, at all.  Sadly, almost every page on the Internet can only exist because of advertisements, so we’re left with quite a quandary: how do we support worthwhile web pages (like this one, I hope…) without becoming easy targets for dishonest people looking to harm us for personal profit?

One solution that’s been proposed is to have every web site screen its web ads.  Unfortunately, ads just don’t work that way, and here’s why: webs are served up by companies who are “aggregators” of advertisements, such as Google (AdSense), Facebook, AOL (not dead, yet!), NYTimes, CBS Interactive, Ad.ly, and many, many others.  Almost nobody has the resources to get enough companies to buy enouch ad space from them to cover all of their expenses, so they instead let these aggregators post web ads to their pages in exchange for a small cut of the profits (and I do mean small).  “Well, make the aggregators censor out fraudulent ads!”  Sounds great!  …But again, the problem is volume.  How does a company of “only” 30,000 full-time employees (most of which don’t sell ads, but do other things, like programming Gmail and GPS maps, designing driver-less cars, and so on) thoroughly investigate 100,000 ads a day to determine which ones lead to pages that will never ship purchased products; will attempt to infect some types of computers with viruses (dependent on OS and software versions); ask for sensitive information that they will sell to their “partners”, three years from now; and so on?  The short answer is that it’s just not possible to turn a profit by selling advertisements if you try to do this.  So, what we’re unavoidably left with is a stinky, seedy, smarmy Internet full of paid advertisements that nobody should ever click on.

So, again, where does that leave us?  I don’t know, and neither do web-centric economists (professional or hobbyist).  Most will acknowlege, if pressed, that ads are a blight on safe computing, and almost anything would be better than the digital cesspool we have, now.  But, like democratic forms of government, it’s the only option we have that seems not to utterly break at the drop of a hat.  So, instead (like any nominally-working form of government), it’s breaking slowly, and nobody is very certain about what we can do to fix it.  In fact, most people who have tried at all to deal with it are utterly befuddled with the problem.

So, what do you think the solution is?  Maybe the right kind of genius is reading this ad-supported web page, at this very moment…  😉