Adam Altman is considered a pioneer of the Internet advertising space. He was the co-founder of Traffic Marketplace, which at the time was one of the largest ad networks on the planet. Traffic Marketplace was sold to Vivendi Universal, and Altman has gone on to co-found several other successful businesses.
I recently spoke to Altman about the future of ad supported businesses in the wake of new, aggressive adblocking technologies. Here is what Adam had to say (disclosure: Adam and I are co-investors in two companies).
Is it possible to sustain an ad supported business?
Adam Altman: It's hard to say what the future will hold, but it's not looking terribly good. We are at a weird time right now where ad blocking technologies are being used by the masses to protect their data privacy.
AA: But on the flipside, ad blocking has prevented cross-deivce tracking, which can actually help consumers by presenting them with ads that are valuable to them when they need them.
No one is in the right or wrong here, it's just fascinating that a lot of companies, whose vision it was to use data to target ads better are heading for rough territory.
So how do ad supported businesses survive?
AA: I think the future has to be some sort of recurring model. Ad-supported companies, including publications, have to figure out how to become predictable-revenue type businesses, or they will perish.
We are seeing some of this already happen with subscription paywalls on content, but we are going to see more creative ways of monetizing followings emerge. It's also part of the reason why my new venture (Rebilly) is in the recurring payments business.
I am bullish long term on any companies that can make the switch from episodic ad-supported to recurring.
What advice do you have for publications and others that they could take action on immediately?
AA: Think of your entire following as a recurring asset. Provided you didn't build your audience entirely on Facebook, you have a valuable asset that can be monetized on a regular basis. If you have a loyal following, you probably engage them via email, sponsored posts, and other ways.
Especially if you're in the hundreds of thousands of unique visitors - put together packages for potential sponsors that are year long engagements. Think like a SaaS company and you'll be just fine.