Advertisers play a zero-sum game against each other. If company X makes a more invasive ad than their competitor company Y, it will result in more sales for X and less sales for Y. Therefore it makes sense for them to make their ads as invasive as possible.
But if both companies advertise on YouTube, then Google can specify rules about what is allowed and what is not, and both companies X and Y would have to follow the rules. A good example was Slate Star Codex, where you either advertised in the specified unobtrusive way, or not at all.
Imagine that Google would make rules such as “ads are not allowed to be louder than X” or “each ad can be skipped after one second of playing”. Do you believe it would result in companies taking their ads away from YouTube (to where exactly)? Because it would be definitely more pleasant for the user.
Problem is, Google allows users to pay for removing the ads, therefore it is their incentive to make the experience unpleasant for the unpaying user. The goal is to find the optimal level of unpleasantness—not too low, because the users would not pay for reducing it, but not high enough to make the non-paying users leave YouTube en masse.
Each individual website’s advertising space is its own channel.
Upon reflection, individual management of each website’s channel kind of works: I can imagine knowing and trusting some websites and their ad systems, and having bad behavior on other websites not sour me against the first set. However, it doesn’t work for the undifferentiated mass of websites I’ve rarely or never seen before. The no-name websites would have an incentive to defect, because the negative impact is spread among the many others (also, a no-name website likely has a shorter expected lifetime, and therefore a shorter planning horizon).
Now, if those websites mostly outsource their advertisement to one big long-lived monopolistic company—say, if 90% of the market farms it out to Google—then that company does absorb most of the damage from bad ads, and thus has a decent incentive to have policies against bad ads (and to maintain a good “fuck you” button). (Well, due to corporate dysfunction, the actual planning horizon of the decisionmakers in the company may be disappointingly short. Perhaps betting markets—who knows.) It’s possible that economies of scale and network effects will mean that, even if bad ads are more effective (in the short term), the other advantages of using Google outweigh those of the bad ads.
Still, if we figure Google has a few competitors (in the “farm out your ads” space) that are nearly as effective and that allow worse ads, it’s possible the competitors would start gaining ground. If they gain enough ground, they might end up in a similar position as Google and start finding it in their interest to cut out more bad ads, but that could take a while. And if you end up with an oligopoly of, say, four companies, the smallest of which has 10% of the market, it’s possible that the difference between “absorbs all the damage from bad ads” and “absorbs 1⁄10 the damage from bad ads” is significant.
Perhaps the oligopolies would be able to make deals of some kind? Each one agrees to stop its bad ads in exchange for the rest giving them some fraction of the expected benefit to them. I’ve heard that this category of agreement might get declared “anticompetitive behavior” and run afoul of antitrust laws, which is unfortunate. Don’t know if that’s true, though.
It’s also conceivable that it could all happen from the bottom from negotiation with the user-controlled adblockers. It seems that Adblock Plus made some forays in this direction, where its makers started letting “acceptable ads” through (allegedly with criteria like “only static advertisements with a maximum of one script will be permitted as “acceptable”, with a preference towards text-only content”), in exchange for getting paid by the advertisers. From the outside this is hard to distinguish from “getting bribed to betray their users”, and a bunch of people complained. It’s possible they implemented it badly (and, conceivably, that finding a way to share that revenue with the users is a better model (I think Brave is doing something that sounds like this?)), but that things like it are a good direction to go in.
(My impression is that a bunch of people switched from ABP to uBlock, and then to uBlock Origin for possibly similar reasons. (I was one such person; I didn’t look closely into what ABP was no longer blocking; but apparently uBlock has various other technical advantages as well.) At the very least, the fact that users can switch like this is important to disincentivize betrayal.)
If we do reach a place where many/most users are running something resembling ABP, which blocks the bad ads, then advertisers are incentivized to make sure they can serve ok ads. (They might also try to detect adblocking and, in its absence, serve the bad ads; this might be considered an incentive for users to install ABP.) That would be decent, although we then reach the question of individuality.
Suppose that the average concept of “ok ads”, which ABP-likes end up with, includes things I hate. Modern adblockers do have “lists” you can subscribe to, so it does seem likely that someone would have added ways for me to disable some set of ads that fairly closely resembles what I want (I suspect I would end up disabling all video ads). Then… would sites lock me out? From an “optimal price discrimination” perspective, the static ads really are all they can get from me, so they should settle for that (for all the good it’ll do, see “ascetic” and “family subscribes to Consumer Reports”). From an “in practice” perspective… Well, consider that only 1⁄4 of web users block ads (as of a 2019 survey) and those are a self-selected subset that hate (some) ads and wouldn’t be good targets anyway. Of those who do, probably the vast majority use the defaults; even I didn’t bother changing the settings on my adblocker (which I’ve used for years) until yesterday (to turn off the damn “cookie permissions” nags). I suspect it’s not really worth it for the sites to bother excluding those who block videos (although I would also have expected it’s not really worth it for them to bother excluding those who block all ads, and apparently some do; I suspect that was implemented by an ad platform that lots of sites farm out to). Likely some would try. And that would be fine.
> To resolve this, it seems that one entity needs to own each “channel that distributes the ads”, so all the damage is experienced by them
Where “channel” here is the internet? This sounds illegal, since the whole idea is removing competition
I believe it refers to e.g. YouTube.
Advertisers play a zero-sum game against each other. If company X makes a more invasive ad than their competitor company Y, it will result in more sales for X and less sales for Y. Therefore it makes sense for them to make their ads as invasive as possible.
But if both companies advertise on YouTube, then Google can specify rules about what is allowed and what is not, and both companies X and Y would have to follow the rules. A good example was Slate Star Codex, where you either advertised in the specified unobtrusive way, or not at all.
Imagine that Google would make rules such as “ads are not allowed to be louder than X” or “each ad can be skipped after one second of playing”. Do you believe it would result in companies taking their ads away from YouTube (to where exactly)? Because it would be definitely more pleasant for the user.
Problem is, Google allows users to pay for removing the ads, therefore it is their incentive to make the experience unpleasant for the unpaying user. The goal is to find the optimal level of unpleasantness—not too low, because the users would not pay for reducing it, but not high enough to make the non-paying users leave YouTube en masse.
Each individual website’s advertising space is its own channel.
Upon reflection, individual management of each website’s channel kind of works: I can imagine knowing and trusting some websites and their ad systems, and having bad behavior on other websites not sour me against the first set. However, it doesn’t work for the undifferentiated mass of websites I’ve rarely or never seen before. The no-name websites would have an incentive to defect, because the negative impact is spread among the many others (also, a no-name website likely has a shorter expected lifetime, and therefore a shorter planning horizon).
Now, if those websites mostly outsource their advertisement to one big long-lived monopolistic company—say, if 90% of the market farms it out to Google—then that company does absorb most of the damage from bad ads, and thus has a decent incentive to have policies against bad ads (and to maintain a good “fuck you” button). (Well, due to corporate dysfunction, the actual planning horizon of the decisionmakers in the company may be disappointingly short. Perhaps betting markets—who knows.) It’s possible that economies of scale and network effects will mean that, even if bad ads are more effective (in the short term), the other advantages of using Google outweigh those of the bad ads.
Still, if we figure Google has a few competitors (in the “farm out your ads” space) that are nearly as effective and that allow worse ads, it’s possible the competitors would start gaining ground. If they gain enough ground, they might end up in a similar position as Google and start finding it in their interest to cut out more bad ads, but that could take a while. And if you end up with an oligopoly of, say, four companies, the smallest of which has 10% of the market, it’s possible that the difference between “absorbs all the damage from bad ads” and “absorbs 1⁄10 the damage from bad ads” is significant.
Perhaps the oligopolies would be able to make deals of some kind? Each one agrees to stop its bad ads in exchange for the rest giving them some fraction of the expected benefit to them. I’ve heard that this category of agreement might get declared “anticompetitive behavior” and run afoul of antitrust laws, which is unfortunate. Don’t know if that’s true, though.
It’s also conceivable that it could all happen from the bottom from negotiation with the user-controlled adblockers. It seems that Adblock Plus made some forays in this direction, where its makers started letting “acceptable ads” through (allegedly with criteria like “only static advertisements with a maximum of one script will be permitted as “acceptable”, with a preference towards text-only content”), in exchange for getting paid by the advertisers. From the outside this is hard to distinguish from “getting bribed to betray their users”, and a bunch of people complained. It’s possible they implemented it badly (and, conceivably, that finding a way to share that revenue with the users is a better model (I think Brave is doing something that sounds like this?)), but that things like it are a good direction to go in.
(My impression is that a bunch of people switched from ABP to uBlock, and then to uBlock Origin for possibly similar reasons. (I was one such person; I didn’t look closely into what ABP was no longer blocking; but apparently uBlock has various other technical advantages as well.) At the very least, the fact that users can switch like this is important to disincentivize betrayal.)
If we do reach a place where many/most users are running something resembling ABP, which blocks the bad ads, then advertisers are incentivized to make sure they can serve ok ads. (They might also try to detect adblocking and, in its absence, serve the bad ads; this might be considered an incentive for users to install ABP.) That would be decent, although we then reach the question of individuality.
Suppose that the average concept of “ok ads”, which ABP-likes end up with, includes things I hate. Modern adblockers do have “lists” you can subscribe to, so it does seem likely that someone would have added ways for me to disable some set of ads that fairly closely resembles what I want (I suspect I would end up disabling all video ads). Then… would sites lock me out? From an “optimal price discrimination” perspective, the static ads really are all they can get from me, so they should settle for that (for all the good it’ll do, see “ascetic” and “family subscribes to Consumer Reports”). From an “in practice” perspective… Well, consider that only 1⁄4 of web users block ads (as of a 2019 survey) and those are a self-selected subset that hate (some) ads and wouldn’t be good targets anyway. Of those who do, probably the vast majority use the defaults; even I didn’t bother changing the settings on my adblocker (which I’ve used for years) until yesterday (to turn off the damn “cookie permissions” nags). I suspect it’s not really worth it for the sites to bother excluding those who block videos (although I would also have expected it’s not really worth it for them to bother excluding those who block all ads, and apparently some do; I suspect that was implemented by an ad platform that lots of sites farm out to). Likely some would try. And that would be fine.