this post was submitted on 15 Jul 2023
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I'd expect there's an equilibrium to be found.
Even if you had the hypothetical "ultimate consumer" -- so stupid that they clicked every ad and bought everything they saw-- there would be a finite cap of ad revenue you could get out of them. There are only so many advertisers, and they're only willing to pay so much per ad, because their acquisition budgets are finite and they anticipate much more real world levels of conversion from view to click to sale.
Maybe an "optimal" real-world user is worth $30 per month in ad clicks. Maybe they're worth 30 cents. Either way, it's still a number where you can say "we can offer an ad-free experience for a price anywhere above that, lose no revenue, and provide a premium option."
I'm also surprised there isn't more concern from the investor world about anchoring more and more products and services to the advertising universe-- it's a brittle, finicky bubble that's based on everyone lying to everyone else and hoping nobody checks the books.