Tim Hwang and Adi Kamdar have presented a paper titled The Theory of Peak Advertising and The Future of the Web, in which they raise the compelling argument that a slowdown in online advertising will "force significant shifts in the experience of the web itself."
• Key indicators for online advertising effectiveness have declined since the launch of the first banner advertisement in 1994. These declines are increasingly placing pressure on even the most established businesses in the space.
• These developments suggest important (and potentially painful) implications for market structure, privacy, and authenticity online.
• Existing alternatives appear at present to be insufficient to replace lost revenue from near-future declines in the value of display, search, and mobile advertising.
• Ultimately, the economics of the web will necessitate pivotal decisions about the financial underpinnings of the Internet in the decades to come.
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