<story><title>100 million dollars to reshape the economics of the web</title><url>https://foundation.mozilla.org/en/blog/100-million-investment-reshape-economics-web/</url></story><parent_chain><item><author>dangrossman</author><text>None of these web monetization efforts address the fact that the pool of [all consumers&amp;#x27; discretionary income they&amp;#x27;d be willing to spend] is likely a small fraction of the size of [all commercial companies&amp;#x27; marketing budgets]. No matter how much you reduce the friction for having people make small tips to websites, there&amp;#x27;s just significantly less money to go around, so it can never replace advertising revenue. The only way that would change is if online advertising went away overnight, and instead of companies redirecting that to other forms of advertising, the prices of all consumer goods went down so it stayed in our collective pockets.</text></item></parent_chain><comment><author>sebastos</author><text>This kind of seems like a troubling insight at first glance, but it doesn&amp;#x27;t pass basic sanity checks imo. You could make the same exact argument about any other type of industry. Watch:&lt;p&gt;&amp;gt;The [pool of discretionary income people have to spend on books] is a small fraction of [all commercial companies&amp;#x27; marketing budgets], therefore it will always be more profitable to run free bookstores that try to make money by putting ads inside the dustjackets and all along the shelves.&lt;p&gt;But this obviously isn&amp;#x27;t true - Barnes and Noble is a thing. Or you could even consider Kindles and the ebook market examples of how this isn&amp;#x27;t true. It can be far _superior_ in terms of revenue to offer a product that people pay for directly, as opposed to baiting them into a space with ads in it.&lt;p&gt;I think the mistake came in when you compared all of the marketing budgets combined, (call it M), with all of the discretionary income combined, (D), and took it as axiomatic that D &amp;lt;&amp;lt; M. But... how could that possibly be true? Most companies will not be operating at a loss, which means their annual marketing budget will be some fraction of their gross revenue. From what I can tell from some googling, at least ~60% of that revenue, averaging over all corporations, is coming directly from... consumers&amp;#x27; pocketbooks.&lt;p&gt;Some more googling tells me that marketing spend from US companies was ~$200 billion in 2018. US consumers spent $14 trillion. So the whole premise strikes me as questionable. Am I missing something?</text></comment>
<story><title>100 million dollars to reshape the economics of the web</title><url>https://foundation.mozilla.org/en/blog/100-million-investment-reshape-economics-web/</url></story><parent_chain><item><author>dangrossman</author><text>None of these web monetization efforts address the fact that the pool of [all consumers&amp;#x27; discretionary income they&amp;#x27;d be willing to spend] is likely a small fraction of the size of [all commercial companies&amp;#x27; marketing budgets]. No matter how much you reduce the friction for having people make small tips to websites, there&amp;#x27;s just significantly less money to go around, so it can never replace advertising revenue. The only way that would change is if online advertising went away overnight, and instead of companies redirecting that to other forms of advertising, the prices of all consumer goods went down so it stayed in our collective pockets.</text></item></parent_chain><comment><author>Retric</author><text>Alternatively if advertising became significantly less effective companies would spend less money on it.  That&amp;#x27;s the upside of Ad-blocking which could theoretically make a huge impact.</text></comment>