“For over a century, ads were the driving force behind newspapers and magazines, and then TV,” Tim Bajarin writes for PC Magazine. “These ads went out to everyone, and marketers hoped for the best in terms of return on investment.”
“Enter Google, which offered a way to deliver truly targeted ads via its contextual search engine,” Bajarin writes. “But there were two catches. For targeted ads to be effective, advertisers needed to know what a person liked in order to display relevant ads they were likely to click… The second catch comes from the push by advertisers to make sure Google, Facebook, and others don’t stop tracking people. Their user agreements say, in essence, ‘If you use our product for free, you agree to see ads, which supports this free service.'”
“Thanks to the Cambridge Analytic flap at Facebook, ad-supported services are under considerable scrutiny and have a lot to lose. More importantly, they must gain the trust of their users if they want to remain important companies in the future,” Bajarin writes. “The bottom line is that advertising has been at the heart of all kinds of businesses for over a century and is not going away. I expect to see both Tim Cook and Mark Zuckerberg ramp up their public positions on the virtues of each business model, though Zuckerberg will probably face the most public scrutiny.”
Read more in the full article here.
MacDailyNews Take: Both models have their positives and negatives. Ad-supported services can reach more people, since they’re free or very low cost to the user, but the user sacrifices privacy and data. Paid services have limits to how many people they can reach as not every person can afford and/or wants to pay.
It seems to us that companies that do both would be most successful. Imagine Apple Music with a “free” ad-supported tier or Facebook with a paid tier that doesn’t use subscribers’ data (and somehow proves to the user that they don’t).