The End of Advertising - by Michael Mignano
Everybody hates ads. At least that’s what we all say out loud. But our revealed preferences tell a different story: we all actually love ads, because they fund most of the content we consume on the internet. Without ads, we’d have to pay for content with our hard earned dollars. But with ads, we pay with our attention, and we perceive the cost of the content as free. Ads have made the internet as we know it today possible.
Ads are also a really good business, because advertisers are willing to pay top dollar to access our attention. In the early days of the internet, this looked like simple banner ads brokered through manual deals on basic HTML websites. But over time, ads evolved into some of the greatest money printing machines ever invented, like Google and Meta. Even businesses we don’t often associate with ads, like Apple and Amazon, make a killing from them. And the little guys love them, too: many long tail publishers, websites, niche blogs, podcasters, and indie games are all funded by ads. Ads built the modern internet and funded our internet addiction, making billions of dollars and billions of us happy in the process. It's a perfectly tuned system that we all take for granted.
AI is increasingly challenging the business model of ads – the system that makes the open web feel free. For example: many of us are using Google search less frequently, along with the ad-supported websites that it leads us to. And in their place, we’re using answer engines like ChatGPT and Perplexity more. Each time we task these AIs with delivering us a single, definitive answer (in favor of wading through many potential answers via traditional search), the relationship between an advertiser and our attention is severed – and the ad never gets delivered.
