The sustainability of ad-supported businesses

Day before I attended a conference called Mobile Monday Delhi (link). The keynote speaker was Naresh Gupta – Senior VP at Adobe (their incredible office was the conference venue). He talk dwelt upon how mobile phone technology has had a quantum effect on the human civilization and, more importantly, raised the question as to which would be the next killer app for the mobile. According to him till date there have been only two killer apps 1) Voice 2) SMS/Email, which I largely agree with.

However, in the middle of all this, he made a passing note about how in the future Voice might be free, as it might be ad-supported – so perhaps, sometime into the future, high fidelity voice recognition technology could ‘hear’ what one was talking about and pour in content specific ads. Now I am not discounting that such a possibility exists – Google might be in on it even as I write.

What it made think about is, how the success of Google and its singular business model (at least till date) has made people believe that almost all web businesses can be ad supported. This was echoed by a company called Webaroo, which will enable offline web browsing on smart phones, who stated that their revenue will come from offline Google Ads.

Now, my question is – are ad-supported businesses sustainable? I might be sounding like a fool here considering the size of the online advertising industry and at the rate at which it is growing – (short article here). But If we take it to the extreme – anything and eveything can be ad-supported. So the next book I buy might be free, because every second page will be an ad – or maybe after every paragraph there will be an ad. Even if I just stick to the web, how many companies would want their pay-per-click on every site, which thinks it can be ad-supported but its proposed huge user base is right now just an air-castle? At the end of the day someone is paying for those ads – what happens when the number of ad-supporting businesses become less than the number of ad-supported businesses. Shouldn’t companies be charging for the value they are creating, as against pimping the value someone else is creating and charging a commision for it? Even Google seems to be exploring newer business models – Google Checkout for example.

Maybe my argument has flaws – perhaps offline ad-supporting businesses will never be outnumbered by online ad-supported businesses. But it is a thought.

Someone show me the light.

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One thought on “The sustainability of ad-supported businesses

  1. Rana says:

    ye dekh, batti
    Abe these things would work in multiple ways. For e.g. jodi pack numbers calling each other would hear a durex advert as a ‘hello tune’, or someone calling up dominoes would hear a pizza hut advert with an amazing new deal…
    I think the model is sustainable.

    Damn, I missed the event

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