The Final Adpocalypse

👋 Hey friends

A couple of month's ago, the Freakonomics podcast put out an episode called, "Does Advertising Actually Work?" where they discussed recent data showing that advertising might be a severely over-valued market.

As someone who thinks that online advertising has absolutely fucked the internet, I was really excited by the idea that it might be a big ol' bubble. Down with big tech ✊, right?

But then I started thinking about what would happen if that bubble actually popped. Yes, Google and Facebook stock would probably take a nose dive for a few months, but those companies are sitting on so much goddamn cash that it wouldn't matter at all. They'd have time to pivot business models, spin off new products, and rebrand themselves. The fallout really settles on creators.

What happens when YouTube is no longer predominately ad supported? What happens when you have to pay to host your work? What happens when there aren't algorithms that keep people watching and push your content to millions of people?

As much as I want people to be the key stakeholder for tech platforms and not advertisers, the entire economic engine that drives creator business is built on the latter.

Right now, the reason you can grab a camera and potentially make money making stuff on the internet is because advertising is full of demand.

Last year, $300,000,000,000 was spent on ads. I wrote the whole number so it's slightly easier to see just how much money that is. The market is flooded with cash. Which means there's room for the hundreds of thousands of creators who get paid to help those big spenders grab attention.

However, if ads are a joke and that bubble pops, companies are going to get frugal quick. The market is going to shrink, the money is going to dry up, and the brokers of ads and brand deals will have no leverage. Creators are going to get squeezed out of business.

I imagine in that world, YouTube looks less like YouTube and more like Netflix - where they green-light shows from creators who have track-records of making quality programming that they're customers want to view.

I'm not saying that creators won't be able to make it without the big tech companies. We've already seen how direct support from audiences through Patreon, merchandise sales, and even creator-owned subscription sites like Nebula, FloatPlane and Corridor Digital can be game-changers in terms of enabling creators to be independent.

It's true that all you need as a creator is "1,000 true fans" - I'm just saying that on an internet without ads...

Only a fraction of creators will get that far.

So, am I advocating that we keep advertising around? Fuck no.

I just want more people to see that, "getting rid of ads" is a much more complicated and nuanced problem than we might think. We need systems and solutions in place that protect the small businesses that creators are.

A couple of ideas

I put out a post yesterday on platform cooperatives, and I think this is a great use case for that model. Rather than having every creator spin up their own Netflix and starting a big ol' race to the bottom, creators in the same niche could start their own platforms and work collaboratively to bring great content to that whole audience.

Nebula is a good theoretical example of this, but I'm not sure they're actually a profitable company and I don't believe they are structured as an actual coop.

To solve the new creator problem, another idea is to have bootcamps/accelerators for people who want to start creator businesses run by or tied to established creators. Think the idealized version of Casey Neistat's 368.

The new creators get to benefit from things like production equipment, collaborative environment, but most importantly, an established audience to "sell" to. Might work well with ESAs - could also be a great business opportunity in general for creators that want to build a brand bigger than them.

Closing thoughts

If we want to keep the great things about the "free" and open web, then we need to realize what it costs and think harder about how to fund it.

Always happy to hear thoughts - slide into my DMs on twitter, or email me.

Until tomorrow.