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.
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.