One month after a US court ruled Google had an illegal monopoly on online search, the tech giant is back in court defending allegations it has also monopolised internet ads.
My prediction is different: I think that, in the long term, banning targetted ads will have almost no impact on the viability of ad-supported services, or the amount of ads per page.
Advertisement is an arms race; everyone needs to use the most efficient technique available, not just to increase their sales but to prevent them from decreasing - as your competitor using that technique will get the sales instead.
But once a certain technique is banned, you aren’t the only one who can’t use it; your competitors can’t either.
And the price of the ad slot is intrinsically tied to that. When targetted ads were introduced, advertisers became less willing to pay for non-targetted ads; decreased demand led to lower prices, and thus lower revenue to people offering those ad slots on their pages, forcing those people to offer ad slots with targetted advertisement instead. Banning targetted ads will simply revert this process, placing the market value of non-targetted ad slots back where it used to be.
My prediction is different: I think that, in the long term, banning targetted ads will have almost no impact on the viability of ad-supported services, or the amount of ads per page.
Advertisement is an arms race; everyone needs to use the most efficient technique available, not just to increase their sales but to prevent them from decreasing - as your competitor using that technique will get the sales instead.
But once a certain technique is banned, you aren’t the only one who can’t use it; your competitors can’t either.
And the price of the ad slot is intrinsically tied to that. When targetted ads were introduced, advertisers became less willing to pay for non-targetted ads; decreased demand led to lower prices, and thus lower revenue to people offering those ad slots on their pages, forcing those people to offer ad slots with targetted advertisement instead. Banning targetted ads will simply revert this process, placing the market value of non-targetted ad slots back where it used to be.