Tag: ads

Internet Economics

If you are reading this, you are a financial participant in the economic system that supports the Internet. This claim is not intended as a reference to the fees you pay for your phone data plan or the connection you use at your home or business. The money we all pay to access the Internet is another issue and beyond access has nothing to do with supporting the service providers and the content creators that make the Internet worth using.

Beyond the money paid for general Internet access, many spend no more money for the services they receive. They don’t use a check or credit card to compensate Google for searches, Facebook for social interaction, or the writers and videographers for the content users access. Others may pay for a few services, but also use many others without spending a cent.

I am guessing you understand and see in your own online experiences that your willingness to view ads is how you compensate someone for the valuable experiences you receive. I am assuming you are not among those who block ads as this action would violate the trust the free services put on you to understand that the services you receive are really not free for them to provide. Internet ads interest those who pay to have them posted largely because these ads can be targeted to the interests of viewers and thus are more valuable than ads they could have placed on television, radio, or in your daily paper (if you get a print copy). Of course, this means that to receive targeted ads companies have collected information about your online behavior to make educated guesses about your interests. Just to be clear, ads cover a wider variety of targeted information than most of us probably recognize. Ads may attempt to interest you in a specific car or brand of laundry detergent, but also a political candidate or cause. You may not recognize that those who want to convince us of specific facts or fallacies may also send information or disinformation our way based on what they can learn about you. It is this hidden effort at persuasion that is of concern, but part of the financial incentive opportunity that supports the Internet.

The hidden incentives that encourage Internet service providers have drawn the attention of politicians and this attention may eventually result in some restrictions. Of course, any time politically mandated restrictions are mentioned, other politicians will resist and legislation becomes very difficult to pass.

Allow me to propose a solution you might try while we all wait for legal guidance.

I think that Internet users should pay for the services and content they receive. I think this is the only commitment that makes long-term sense in terms of saving the open Internet. There are several ways to do this without relying on the collection of personal information and targeted ads. Some form of micropayments makes the most sense. You pay a small amount when you visit and use content or a service. Just to be clear, I am describing a system that replaces the types of access now funded by ads and not the services that are behind a paywall (another issue not addressed here).

What I recommend is that you explore and use the Brave Ecosystem. I have no official connection with Brave, but have used this system as my primary way to work online for a substantial amount of time. Brave is a browser that is based on chromium. The Brave browser should be an easy transition for anyone familiar with the Chrome browser.

It is an understanding of the ecosystem behind this browser that is what I am promoting. This ecosystem could be used in what I consider an unethical way, but the system is designed with the potential to compensate participating online services and content creators. The Brave browser allows you to block ads and the collection of personal information. If this is all you use it for, I regard your behavior as unethical. Brave allows you to support the online community by contributing money to the ecosystem that is allocated to online resource providers based on which sites you visit and how much time you commit to specific sites.

In addition or as an alternative to contributing money, you can also commit to viewing ads on Brave. Those wanting to advertise on Brave pay just like those wanting to advertise through other online ad systems, but these ads are not shown based on information shared back to the ad companies. Brave uses a system that resides on your devices to categorize you in a way that determines the type of ads you will see. You can keep the money you receive OR you can allocate these funds to compensate the providers associated with the sites you visit. These funds work just as well for compensation as funds you send Brave out of your pocket.

Brave is not perfect, but I support this model and have participated since the early days of its development. Like so many ideas associated with the Internet, the value of an idea grows with the number of participants. More participants would attract more companies to have their ads included and more participants among resource providers. The success of Brave would also encourage other companies to try similar models.

I hope the following video provides a concrete look at how Brave works.

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Brave Update

I have written about my interest in the Brave browser and ecosystem several times. It is not my interest here to repeat my previous comments and I would refer those interested in a complete description and more information about how to use the ecosystem to this post from the Mercury News [https://www.mercurynews.com/2019/07/26/magid-2/amp/]. You can certainly use the search box available through this blog to find some of my previous posts.

I am writing again because Brave has addressed one of the concerns I have expressed previously. A quick description is necessary to explain what I think has been improved. Brave offers both a way to block the collection of personal information intended to focus the later display of ads AND a way to subsidize content providers when the ads that might provide them a small source of revenue with income are blocked. My complaint was that users of Brave could block ads, but not make the effort to contribute money to compensate content creators. It was complicated to contribute money because you have to offer funds and make the effort to convert these funds into a type of cryptocurrency. It was challenging enough to do this to discourage non-geeks to make the effort.

What Brave has changed is to provide users of the browser to view ads through Brave to generate revenue for themselves. This provides a way to accumulate income within the ecosystem that can be accessed by the user (I think), but can also be used to compensate content producers. I have no idea how many take advantage of each option, but Brave makes the effort to encourage sharing with content producers and for now this seems a move forward.

My story is this. I originally figured out how I could convert money into BAT (the cryptocurrency) and added $50. Strangely, I got in early and the value of this stake increased to nearly $100 as a function of the fluctuation of the value of BAT. I allocated 20 BAT a month to be distributed among the various sites I visit and view without ads. I also enrolled by site (https://learningaloud.com) so my resources were authenticated within the Brave ecosystem. I do have ads on some of my content, but I receive very little in revenue. I make the effort because I am curious about how this all works. For example, I know that about 20% of those who visit my site block the ads. This seriously underestimates exposure to ads as those who use a cell phone to view responsive content do not see the side bar which is where my ads are positioned. I estimate that less than 20% of views actually contain an ad.

I have had enough experience now with Brave to make some observations. I set my interest in viewing ads at two per hour. One limitation of the present version of Brave is that the data from multiple devices is not combined and iOS is not included in ad revenue generation. I generate personal ad revenue only when working on my desktop machine.

So, I am writing this on July 29 and you can see how much revenue I have generated from viewing Brave ads (56 cents or 1.95 BAT). With less than a week less in the month, you can kind of estimate how much I presently generate in a month. Again, I contribute 20 BAT per month.

You can participate in the Brave program without actually putting any of your money into the system. You can also accumulate BAT by accepting Brave ads. I interpret Brave to suggest that if you accept BAT for viewing ads, you should spend some of your income in support of those who are content creators. At least this is a start.

Here is one issue. Few content and service providers have made the effort to register with Brave. Registration is important in supporting this innovation and I urge everyone who falls into the category of content creator to make this effort. In the following image, I captured as much as I could from my screen. You see the gap between the list of sites I have visited and how few are registered. Yes, I end up paying myself, but this is a function of the sites I work on.

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The online business model will likely change

It is important to try to understand the perspective of others in most situations. We far too easily see things biased our own priorities and past experiences. It is too easy to see how changes will benefit us and not how such change will affect others. Trying to work through how others will see a given situation offers insights. This is what I try to do when considering the hidden relationship between Internet service providers, content creators, and content consumers.

Allow me a thought experiment

Try considering my perspective related to the content I author. I will make about $4 this year for my efforts. You are looking at some of my content this moment and it took me some time to research the issue that is the focus of this post and to write the post. As part of my expectation for your viewing my content, I have included a Google ad in the display. It is not my expectation that you will click on this ad (which would result in my receiving a few pennies), but it is my expectation that this ad will be displayed. This is the way click-through ads work. If you click an ad, you are paying me. Just by allowing the ad to be visible and not using some way to block its appearance, you have provided Google the opportunity to collect some information about your behavior that is valuable in selecting the ad you view and in allowing Google to sell the ad at a higher price than it would receive for placing some random ad on the page. If you see the ad, you provide this information about yourself whether you click the ad or not. Google does not collect revenue from you even though you benefit from free Google services.

So, it useful to consider the assumptions the multiple parties in the scenario I describe make. You hear the term “business model” thrown about. Perhaps what I describe is a way to consider such assumptions from a business perspective.

Google assumes it can sell ads if it convinces those who pay for the ads that targeted ads warrant a higher price than random ads.

Google assumes it can give viewers free access to its infrastructure and the work of its employees if it displays targeted ads.

Viewers assume that they can view the content and access the online service without having to pay beyond sharing personal information.

Viewers assume their personal information will be used in an appropriate way.

The content creator assumes that viewers will view the Google ad and a few will be interested enough to click the ad to learn about the product or service.

I think it fair to say that all of these assumptions must be met if this interaction of participations can be expected to continue.

I think this model is breaking down and it is yet unclear how the failed assumptions will change the online experience going forward. Users are finding ways to block ads. Some online services are selling personal user data in ways not understood by the users. 

I think it valuable to consider your own assumptions and to acknowledge the assumptions of others involved in the present online experience. You may disagree with my appraisal, but I would ask that you consider how your assumptions differ from mine. What do you expect the future to bring? I believe some changes are occurring and others (federal intervention) will occur soon. My interest is in getting individuals to consider their role in how the new set of assumptions will produce different experiences and whether these new experiences will be an improvement or not.

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Confusing ads with privacy

The latest talking point in the Microsoft, Apple and Google competition seems to be focused on the issue of privacy. As a simplified version of what is happening. Microsoft and Apple make their money on hardware and software. Google makes its money on ads. One way to attack the popularity of Google is to complain that Google violates personal privacy in the way ads are selected for presentation. This position confuses issues related to ads and privacy.

If you use Google services and are concerned about privacy, the Google position on what information it gathers and why it gathers this information is easy to find.

If you still believe Google is invading your privacy, Google provides a pretty easy fix. Using the link I provide above, look for the link “Go to ad settings”. Near the bottom of the ad settings page, you will see these options:

Ads_SettingsIf you do not agree with Google’s use of information about you, it is easy to opt out of targeted ads (called interest-based ads here). To be clear, this does not mean you will see no ads. This would seem unfair since you are using Google services at no expense to you. Showing ads rather than selling software/services is Google’s primary business model. Opting out of targeted ads means you will see ads that are not based on your data.

So, understand that you have options if you object to the use of your data being used to send you what Google hopes are relevant ads. Google does not make money unless you click on ads so Google has an interest in showing ads you will find useful.

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The spin applied by tech companies

What are you willing to share to get something in return? The answer to this question may be very relevant to the future of several companies – Google, Apple, and Microsoft.

Are you willing to share data derived from your online behavior? This seems to be shaping up as a dividing line newly promoted by these companies to differentiate themselves and attract users and their money. (The New Yorker offers their analysis).

Here is how the companies spin their positions. Google wants you to believe that it collects information about you to provide you better online experiences. The more Google knows, the more helpful it can be. Do you want random ads or do you want ads that address personal interests? (No open consideration of whether you want ads at all). Apple and Microsoft, in contrast, vow to protect your privacy. The use of data derived from your online behavior is described as a privacy issue.

I’m speaking to you from Silicon Valley, where some of the most prominent and successful companies have built their businesses by lulling their customers into complacency about their personal information.

Guess who – Tim Cook

When I attempt to understand the decisions of technology companies, I ask myself “What are the business model?” We know what these companies offer. Microsoft sells software and some might argue services. Apple sells you hardware, some software, and access to content and services developed by other companies. Google sells a few services and access to other companies content and software, but mostly it sells ad impressions.

These companies do offer users some “no cost” incentives. Microsoft gives away some cross-platform services (One Note, Bing search). Apple gives away some software to Apple users (the OS and productivity apps), but is very limited in cross-platform opportunities. Google gives away many cross-platform services.

You are a user? What do you want? Do remember the Stones’ song – You can’t always get what you want (but if you try some time, you can get what you need)? This actually good advice and should be heeded in this situation. An acceptable answer to the question of what do you want should not be – I want stuff for free. A better answer might be – I want reasonably priced goods and services and not to be taken advantage of in order to obtain what I need.

Apple’s present gamble is that it can do locally on a device what Google does with machine learning and the Google cloud. Apple understands the importance of personalization, but intends to develop a different approach. Rather than collect information based on your behavior, store these data in the cloud and then personalize services based on what appear to be your priorities, Apple intends to keep your data on your device to convince you that your data are not being shared or used for other evil purposes. If developed by Apple using this approach, a service comparable to Google Now could offer useful information related to personal needs without sharing the personal priorities the system determined with Apple. I suppose Apple assumes you view ads as a nuisance you could do without and can search when you want information about a product or service. Apple also assumes you can do without free Google services and will find other services as a substitute. I also suppose it is possible Apple may believe it can offer similar free services if providing such services further reduced interest in what Google offers. This last possibility has yet to materialize as Apple has not been able to develop credible cloud services to this point.

What about Microsoft? A similar logic might apply. Microsoft now promotes its combination of free and paid services (and software) by assuming you are willing to pay for some things in compensation for not having to share personal information.

If you are willing to give up your Google services what is it you assume? I suggest you assume Apple will be able to actually create the device based “personal priority and needs” approach it claims to be developing and that Apple will get far better at cloud services.

The “nuclear option” for anti-Google companies is to build in default mechanisms for blocking ads. At present, if Google can show no ads it would not have enough alternative revenue streams to stay afloat. Customers taking advantage of this “privacy” opportunity and not understanding what they get in the trade for their information could possibly ruin Google. Of course, it is more complicated than just Google vs. Apple and Microsoft. Removing ads, also removes an incentive for many who offer content for free. Those offering content would need other incentives for doing so and the consequences of these other incentives are unclear.

Why do I care? While I understand the general motive of companies to acquire as much of the pie as possible, I do not see a system with few players as great for consumers. I think greater awareness of how companies make money is important. How you or I interpret these finance models is important? It is possible to spin whichever approach you choose to attack? Apple’s model involves overpricing locking users into software and services that may not be the best available. Apple supports blocking ads that were intended to appear by the authors of content. Google uses data about user behavior.

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Free as in Gift or Free as in Expected?

Some years ago I remember a cable channel (Channel One) providing educational content was criticized because the content contained ads. I remember my reaction. If content a student viewed at home contained ads, why would content they viewed at school have to be different? At least the educational content was educational.

Today Google announced (see Google comment, EdWeek description) there would be no more ads in the free GAFE opportunities for students. I guess I understand the issue – parents may have a position on whether they want their children to be exposed to ads and schools using Google services may not be sensitive to the parents position. I do think it is more complicated than this. Google did provide a way to turn off the ads. Most parents probably don’t care because they allow their children to watch television which offers no on/off switch for ads. I often describe the reality of education vs. interesting ideas as the challenge of taking ideas that make sense for individuals and struggling to determine how to apply the ideas to a group. Typically, I am describing an idea someone has about a specific instructional idea (coding, making, etc.) that are ideal for some. It seems to apply to what and how we are willing to pay for education as well.

I wonder if anyone ever thought – we should say thanks to Google for allowing our students/children to use these valuable services without compensating Google. Do we somehow think we deserve such opportunities? Why? (Reminds me of the Chris Anderson book – Free: The future of a radical price).

 

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