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The Future of the Internet, Moving Past Advertising

The Future of the Internet, Moving Past Advertising

The first online ads appeared 20 years ago when HotWired pioneered online advertising with ATT. This set in motion events that no one ever imagined. Since the first 468 x 60 banner in October 1994, interactive advertising has grown to over $100 billion, fueling the majority of sites and free consumer services.

Shortly thereafter, the first pop-up ad was created by Ethan Zuckerman, who recently issued a public apology in Atlantic Magazine, citing advertising as the Internet’s original sin. The problem, according to Zuckerman, as advertising has become the default business model, it encourages companies to track users, compromising their privacy and ultimately trust of their brand. The data-driven, programmatic ad buying ecosystem drives advertisers and publishers to amass big data. “Over time this has a very corrosive effect. I think that regularizes surveillance and makes us feel like we're being watched at all times,” Zuckerman stated in NPR interview this week.

People believe the Internet to be free and open, yet do not realize they are paying for it with their personal data.  The Internet only appears free because it is supported by billions of ad dollars annually that are dependent on users' data. Zuckerman believes there is a better way and he is not alone.

This week at the AdMonsters Publisher Forum, Deanna Brown, former CEO of Federated Media and Inside.com, spoke to the need to reduce the dependency on advertising for economic growth and the need for sites to have more than one revenue stream, beyond advertising.  She advocated publishers consider subscription models which are now coming back in vogue. Others have suggested micropayments, with users paying a small fractions of a cent for content as an alternative to launch new businesses and services.

Furthering the need for alternative revenue sources is sponsored content and native advertising, which bring their own set of issues blurring the lines between advertising and editorial, impeding brand integrity and consumer trust.

The privacy, security and advertising communities have been working backwards to fix systemic problems with the today's advertising ecosystem. Advertisers, networks and publishers need to look for innovative models for ad delivery, balancing two realities. Some users want and can afford unlimited content, while others would not be willing to pay or can't. How do we provide paid content for some without creating a social economic barrier for others?

Many now suggest it is time for publishers to look past advertising to other forms of revenue. Perhaps annual subscriptions to Twitter or Gmail or perhaps a bundle of sites providing a rich online experience. Netflix, the Wall Street Journal and others have crossed the chasm. m Who will be next? Share your thoughts and join the discussion.