The Danger of Over-Monetization

Monetization is one of those horrible neologisms that belongs to the modern era, especially in Silicon Valley circles. So I’ll apologize in advance I’m about to go one worse and talk about over-monetization.

In fairness, the term was coined earlier this week by Amir Efrati of The Information in a tweet, though he left out the hyphen. But regardless of the word (or words) we use to describe it, there’s a real danger among some ad-centric tech companies that they begin to overdo things in their bid to generate revenue, especially from mobile users, and that this comes back to bite them. There are two companies in particular that stand out as being at risk of this phenomenon: Google and Twitter.

Google and mobile search

In its earnings report for this past quarter, Alphabet appeared to signal it’s gaining some real momentum around mobile search advertising and analysts were heartened to see this. Certainly, revenue growth has been stronger of late and it appears it’s Google’s mobile search products that were the major driver. Given the concerns about Google’s ability to replicate its success in desktop search on mobile, that’s reassuring on the surface. But think about how Google is achieving this mobile search growth. If you’ve done a mobile search on Google recently, especially if it was for a product or a search term that could be interpreted as a product search, you were likely presented with a screen full of ads. Take this sample search I just did for “Flowers” while sitting at the San Francisco airport:

Google Flowers2

Look at that first screen I’m presented with. The first two items are clearly ads, but perhaps you might think the third is organic content. However, if you look at the second screen, you’ll see that it, too, is an ad. Below that is a map provided by Google with several more listings for local flower stores. It’s not until you scroll two full screens down you begin to see the first organic search results. Now, for some people, the ads and/or the map and local listings may be just what they’re looking for. But if what you want is what Google once provided so well – organic search results – then you’re having to work quite hard to find them. For other product searches, Google will serve up its own Google Shopping results in a similar way, again often pushing the traditional organic results down to the second or third flick of the finger.

Google’s biggest challenge in mobile is that, unlike a Facebook or Twitter, it has no stream or feed into which to insert ads. Its organic search results have always been so good, many users will click on the first one they see. As such, all its ads have to be crammed into the top part of the page, before that organic link shows up, because users generally won’t scroll down any further. On the desktop, this is less important because organic results have often still made the first screen. But, on a mobile device, it means the user has to work hard even to find the first organic result. There’s a real danger that, in attempting to cram more and more ads into the top part of the screen, Google is going to make its results less relevant and more frustrating for users. And users have alternatives: on iOS, users may well see results from Apple’s Spotlight search before they even get to Google’s results and, in some cases, they may pre-empt the Google search entirely. And for product searches, users who really want to see Amazon results may just skip the Google search in favor of the Amazon app. There’s a tipping point at which Google will go too far in pursuit of a higher ad load and end up pushing users away rather than generating ever-higher mobile ad revenues.

Twitter and ad load

Twitter’s results this week were the same mix we’ve come to expect recently: terrible user growth offset by strong growth in average revenue per user. But that ARPU growth is a direct result of a higher ad load. Twitter’s management was challenged on its earnings call by analysts seeking to understand how much room for additional growth there is here. But management dodged both parts of the question, referring to higher international ad loads rather than talking about the US, where there’s some evidence they’re reaching a ceiling, and refusing to talk about the impact on user engagement. But Twitter launched a new ad product this week which, like Google’s mobile search ads, is designed to be the first thing a user sees when loading up a new Twitter screen. It was this product which prompted both Efrati’s coinage of “Overmonetization” and a tweet of my own, which was the genesis of this post.

My concern here is that Twitter, like Google, is mortgaging the customer experience in pursuit of ever-higher ad revenues. Yes, in the short term, Twitter can keep generating higher and higher ad revenues per user by simply showing more ads. But, at some point, it will cross the line from tolerable to egregious and users will either stop using Twitter or start using third-party clients which don’t show ads. Either way, Twitter will lose the ad revenue it’s been so aggressively pursuing.

A threat not unique to these two companies

Though I’ve singled out these two companies as being at particular risk from the threat of over-monetization, it’s not actually unique to them. Facebook’s Instagram has been showing more ads lately, which was likely, in part, a driver of Facebook’s strong ARPU growth recently. But it risks alienating users who’ve objected to any ads right from the beginning. I’ve certainly noticed the increase in ad load and it’s becoming more and more bothersome. Essentially, any company with an ad-centric business model is going to be constantly tempted to turn up the volume on advertising to grow revenues, especially if user growth is slower than it would like. Television channels in the US have been steadily increasing the ad load over time as well, though lately some have backed off a little in an attempt to retain customers. Television executives have learned this lesson the hard way – there’s a point at which users start to find alternatives to sitting through your ads and none of them ends well.

Perhaps all this helps to explain why, arguably, the two most successful ad-centric online companies – Facebook and Alphabet – are investing so heavily in new initiatives that have non-ad-based business models. At Google, this includes smart home hardware, fiber broadband services, self-driving cars, and life sciences. At Facebook, it includes virtual reality gear and WhatsApp, which has firmly eschewed ad-based business models. These companies see the writing on the wall about an inevitable ceiling both to the overall ad market and their ability to tap into it and are wisely investing in new products and services which aren’t bound by that ceiling.

Published by

Jan Dawson

Jan Dawson is Founder and Chief Analyst at Jackdaw Research, a technology research and consulting firm focused on consumer technology. During his sixteen years as a technology analyst, Jan has covered everything from DSL to LTE, and from policy and regulation to smartphones and tablets. As such, he brings a unique perspective to the consumer technology space, pulling together insights on communications and content services, device hardware and software, and online services to provide big-picture market analysis and strategic advice to his clients. Jan has worked with many of the world’s largest operators, device and infrastructure vendors, online service providers and others to shape their strategies and help them understand the market. Prior to founding Jackdaw, Jan worked at Ovum for a number of years, most recently as Chief Telecoms Analyst, responsible for Ovum’s telecoms research agenda globally.

889 thoughts on “The Danger of Over-Monetization”

  1. In fairness i can easily see Apple in this list of company when it come over-monetization of hardware and associated services

    1. You’ve misunderstood the term and the point of the article. Over-monetization, in this article, is about cramming more and more ads down the user’s throat in an attempt to make more money off each user, and in the process annoying the user. I imagine the term could also be used to describe the mining of data, violation of privacy and security, in order to also make more money per user. Essentially not delivering the value the user is looking for, getting in the way of the value and user experience the user wants, in order to monetize the user more.

      Apple is actually one of the only companies that can afford to NOT over-monetize their users. One of the reasons I choose Apple products is because they have a healthy profit margin. Believe it or not that’s good for me long term. It’s about Apple’s financial incentive to serve the customer. Does Apple make mistakes? They sure do, but they have a strong financial incentive, a profit motivation, to serve me well and deliver the value I’m looking for.

      I think what you meant to say is you feel Apple’s prices are too high for everything they do. I don’t feel the same way. And that’s fine, we’re different customers and we value different things.

      1. over monetization is also about trying to get as much from your customers as legally possible, that being said one can make the case that Apple providing 16GB Storage option in a High IPhone in 2015 is over monetization.

        Also this post lack context when it comes to the evolution of search and Ads

        Shoping Ads are designed specifically for product search because 90% of user who search for a product are not looking for Wikipedia or a web site talking about the product, what they are looking for is the best result to buy the product which is the reason why they rarely scroll down to click on organic search

        For an Anti-ads crusader like you and many other here all form of Ads whether good or bad might be evil but for the vast majority of user with a clear intent, Ads is also extremely relevant and useful hence the popularity of Google search over Bing and many other.

        1. I’m not anti-ad at all. Ads can be done in ways that are actually useful and valuable. When ads annoy me and get in my way, that’s when it is a problem, and sadly that is most ads today.

          As I suspected, with regards to Apple, you simply wanted to say you think they charge too much for X or Y. That’s fine, but that is not what we’re discussing re: over-monetizing users. I happen to agree that Apple should not be selling a 16 GB device anymore, but for millions of people that is all they need. I do expect Apple will move on from 16 GB fairly soon, but Apple has the necessary data on that aspect of their devices. If Apple customers begin to view that amount of storage as something that detracts from the value they want, Apple will respond to that due to the strong financial motivation Apple has to serve customers. Keep in mind that Apple won’t always get everything right all the time. But over time they are heading in the right direction, driven by the winds of profit.

          1. Well targeted Ads are part of the experience for user when using a platform.

            Showing a lot of ads for Dog on Facebook Feed for users who love Dog aren’t intrusive quite contrary it added to the experience for users because of his love for Dog the same way that seeing Apple anywhere would get you more engage because of your love for their products likewise a user who type Flower in the Google search box are looking for Shopping result otherwise the keyword would be in a form a question such as why do women love pink flower which would have shown organic result with probably one Ad, this was the reason for Google to make the search box wider to encourage user to be more specific with their intent.

            Also I suspect Jan Dawson was trying to be misleading by showing a lot of Ads for a simple keyword that he know pretty well will trigger result for a lot of shopping Ads because it’s what users want and then trying to portray it as something that was forced on them when in fact these kind of Shopping ads result are the biggest difference between Google and Bing that make Google the most popular

            also taking the Ads symbol out, these will still be extremely good and relevant result that users would have click on anyway, merchant just prefer to pay a lot to guaranty the top position which is an indication of how accurate valuable and relevant these ads are for user.

            When it comes to Apple and their 16GB Storage, these aren’t decision made in vacuum

            Apple know too well that a lot of users want more storage then will have no choice to either pay 100$ for more even though the difference in cost for Apple is negligible or simply buy ICloud storage and those who don’t would buy the IPhone as it’s hence making a huge chunk of money out of nothing.

            This are clear decisions that some can argue is evil or over monetization but folks like you think is reasonable.

          2. Yes, some ads are done well, are useful, and add value. I said this already. As for Apple you’re simply disagreeing with a pricing strategy. That isn’t relevant to this discussion.

          3. As for Apple you’re simply disagreeing with a pricing strategy @spacegorilla:disqus

            The same can be said about Twitter, Facebook and Google with their Ads strategy and I don’t have any problem with Apple’s pricing strategy it’s all business in my eyes.

            What I was trying to argue was the fact that analysis love to choose their own fact, their own explanation, what their find is good or evil based on their own personal bias or lack of curiosity.

          4. No, ads that make my user experience worse, get in my way, slow page loads, track me, and annoy me are not the same thing as Apple’s pricing strategy. Not. Even. Close. You’re just trying to say something negative about Apple (as usual). I called you on your BS and now you’re trying to rationalize. Whatever.

          5. for a fervent supporter of Apple, perhaps instead of blaming me, saying that I said looking for negative thing about them, you would have shown a little bit more curiosity by doing a little bit of research in Apple own forum board which would have helped you discover that many of their customers complain about the lack of storage space on their brand new very expensive 16GB iPhone that forced them to either deleted their photos or pay $ 100 extra for more storage space.

          6. Why would I need to research issues I am already aware of? I know where Apple needs to improve, you’re not telling me anything I don’t already know. But again, all you’re doing is complaining that Apple’s prices are too high for X or Y. That isn’t over-monetization, not in the context of what the article is discussing. Sure you could argue that any pricing strategy that leads to any complaint is a case of over-monetization, but that’s a stretch and it makes the term fairly meaningless if you do that.

          7. If you are aware of user complain about pricing strategy that force them to pay more than they would otherwise for a decision not related to cost association but rather to get more money out of them as possible then how can you said that I was just trying to say something negative about Apple?

            Also if this strategy is not in your opinion over monetization then I would love to hear you trying to define the term to me.

          8. Essentially you’re talking about monetization and confusing prices you feel are too high with over-monetization. Mark Jones explained it fairly well with the opt-in difference.

            Over-monetization would represent a significant degradation of the user experience, such as ads I can’t opt out of that are the poor kind of ads (tracking scripts, slowing page loads, etc). Ads that are done well and are useful to me, that add value, while they still monetize me, wouldn’t be over-monetization because my satisfaction remains intact, I am still happy with the overall experience. While you will always have users that complain about lots of different aspects of any product, a company with customer satisfaction rates as high as Apple’s could not be said to be wading into over-monetization territory.

            But we could look at user data when it comes to the poorly implemented kind of ads and see that users are very annoyed and are not happy with the overall experience. Do you understand the difference there?

            Of course that doesn’t mean that your opinion about Apple’s prices isn’t valid, for you. But you must understand that is just you, for millions and millions of others Apple’s prices are just fine.

          9. If forcing a user to either have to delete his photos or data for lack of storage or pay 100$ that they complain are not fair from a company which simply want to make more money out of them doesn’t represent a significant degradation of user experience to you then there is no need to continue argue with you because that looks like the kind of person who would rather look foolish than accept the fact that Apple is doing exactly what he just described

          10. The important part you’re forgetting (or ignoring) is that the majority of Apple customers are very satisfied. You need to get to a state of widespread dissatisfaction before we can call it over-monetization. This is the case with obnoxious ads and tracking scripts. As I said before, every company is going to have some number of unhappy customers who complain about various aspects of every product. If we use that as the measure of over-monetization then every company is over-monetizing with regard to every single product ever made. Do you understand how that doesn’t make sense?

          11. Maybe if you were curious enough you would have toniced that this same logic apply to Google Facebook twitter hence their respective dominance in online services

          12. Once again, I already explained this, you’re not telling me anything I haven’t already explained to you Kenny. The danger is that an ad-based business model makes over-monetization more likely since the profit motivation naturally leads in this direction.

          13. And I keep telling you that selling hardware naturally tend to lead company more toward over monetization when possible due to the fragility of hardware based business model and consumer lack of awareness when it comes to costs associated with production and also convincing or misleading advertising which tend to target non technical user

          14. To put it simply, you’re wrong. And it is your bias towards Apple that leads you to your incorrect analysis. You might want to note that the only person on this thread that even comes close to agreeing with you is a well known anti-Apple troll.

          15. What one is is often as strong as what one is not or love to accuse others to be, I barely see the difference between the two of you

          16. What do you mean by “forcing”?
            If one bedroom house doesn’t provide enough space for my belongings, is it my fault or landlord’s fault?
            16GB storage is kind of a standard for entry level smartphones. In past it used to be 8GB. Well now some OEMs have moved onto next tier i.e. 32GB and I think Apple will move onto that as well. I think it’s hurting them because imho usually people don’t like to accept their own faults.
            Many people are happy with their 16GB iPhones also most businesses prefer 16GB iPhones.
            One more thing™…….
            Changing 64GB for next tier was one of the very best “business decision” I’ve seen in a long time.

          17. Good god. It isn’t even amusing how the usual suspects managed to make the comments about this article (which has ABSOLUTELY NOTHING to do with Apple) into an infantile bitch about Apple.

            It’s f’n pathetic. Why acknowledge these trolls?

            It would seem, from all available evidence, that using Android makes one stupid.

          18. I engage from time to time because I’m fascinated with the origin of the anti-Apple bias, where it comes from, why it exists, why people dislike a corporation and its products and services so much. It’s as if their identity is wrapped up in Apple’s actions in some way, that part of who they are is dependent upon Apple. It’s very odd, and fascinating. I still haven’t figured it out.

          19. That may be part of it. My best theory so far is that Apple’s continual progress re: the abstraction and simplification of technology is terrifying to the ‘nerd crowd’, on some level it destroys an important part of their identity, Apple is a threat to them personally. But I can’t paint with too wide a brush, the ‘nerds’ I work with who all have Masters degrees in Comp Sci love Apple gear. I think it is probably a few specific types of ‘nerds’ that feel threatened by Apple, and I don’t think they’re truly aware of the root cause of their Apple bias. The arguments against Apple tend to not admit the fear of abstraction and simplification, the arguments lean towards fantasy, logical fallacy, and idealism, which are essentially excuses to cover the true motivation. Anyway, it’s all fascinating, and I’m not sure my current theory is correct.

          20. It is fascinating. I’m thinking that it has to do with some of the juxtapositions present in the corporate cultures and between the founders.

            You have this great libertarian, artsy, hippy, renaissance, college drop-out on the one hand. He just goes his own way. And he turned out to be the most astute and prescient technologist and businessman in like, history. And his company blends those characteristics in its very DNA. And, it just works.

            Then, you have these nerdy, rigid, MIT types with IQs off the charts. They feel that nobody really admires them, so they portray their company as this great libertarian, artsy, hippy, renaissance, college drop-out company that is everyone’s best friend. And, meh. You scrape the lipstick off, and they are an ad company.

          21. Or…. some nerds just don’t care about that crowd’s self esteemed, shallow, aspirational visions (other than on human grounds), and are really pissed when tools for the mind are controlled by other minds?

            Picasso didn’t have an iPad, Einstein didn’t have a calculator, and Jobs was no Gandhi.

            How’s that for “Think Different!”?

          22. I guess a lot of what we are talking about is connectedness. They didn’t have the internet, either.

            As long as you are connected, other things are connected to you. You may see what you call the IT aspects of Apple intrusive on your daily operations. Speaking of thinking differently, and mind control, that’s how I see the intrusion of Google into computing — because they are interested in “owning” the data and using the data as if they own it, however they may come in contact with it.

            You apparently can accept that because of the apparent “openness” of the system that is portrayed, and because they ostensibly offer less restriction on your operation. I prefer to own my thoughts and have some security against the taking of those thoughts, at the expense of some freedom of operation. My faith in the accuracy of this general outlook tends to be bolstered by the authenticity from Apple I referenced above, and the lack of authenticity I find with Google.

            Your examples of Einstein and Ghandi would likely side with me — as I said before, free thinkers aren’t adverse to constraints; they focus and use the constraints as a springboard. That’s thinking differently.

            You have different values and biases. Fine. Just don’t act like you are a free agent who has none, or a some free agent that uses tools that don’t have any philosophical or business implications.

          23. Not only on my daily operations, those of developers and other innovators. It’s also an assault to ownership, most recently exemplified by Error 53.

          24. Yes, I think error 53 is going the wrong direction. However, notions of ownership are complicated when you are connected to a platform you don’t own, and license software you don’t own.

          25. I think that’s probably part of it. But it does seem like the same anti-Apple crowd moved from Microsoft to Google. Many of the same arguments were made against Apple long before Google even existed. I had the first Mac in 1984 (it’s still on my desk) and even as a teenager it was obvious to me that the simplified UI was the future, that making the whole widget made the most sense, but my choice of computer was constantly insulted and derided as being a toy, or for babies, and so on. And yet I used that Mac for ten years and got a ton of real work done on it. So even back in 1984 there was a profound fear of the abstraction and simplification of technology.

            I do think you’re right about Apple resonating with people. Steve Jobs was a pragmatist, and that is naturally tied to authenticity. People know when a solution works well for them, and Apple gear works well for a lot of people. The anti-Apple crowd wants desperately to believe that Apple’s success isn’t real, that Apple’s approach to technology isn’t really working well, and the success will evaporate Any Day Now ™.

          26. Just how does the fact that a “merchant just prefers to pay a lot to guaranty the top position” make it “an indication of how accurate valuable and relevant these ads are for user”, or in any way make it an “extremely good and relevant result that users would have click on anyway”?

            Call me cynical, but quite a lot of people feel just the opposite.

    2. Like Google and Twitter, Apple is trying to further monetize their iPhone/iPad/Mac base, but unlike them, Apple is doing it by offering additional (optional) services (like Apple Music, Apple Pay, additional iCloud storage, iPhone Upgrade Program, Belkin Screen Protector) and accessories (like Apple Watch, AppleTV). These items usually have higher prices than competing paid or free alternatives, but the higher price gets the user an arguably better experience (i.e., better integration, consistent user interface).

      If Apple began monetizing services that it previously provided for free (which afaik they haven’t done so), then I’d say Apple was annoying the user and harming the experience.

      1. Apple is also energetically trying to capture more revenue from each user, both by edging out other providers (iMusic, the perpetulease program, bricking phones repaired by 3rd parties…) and by rising prices (16GB base model has become mostly useless, more expensive 6+, mostly mandatory warranty…)

        Fat chance we’ll get an article on that though.

        Re: monetization, I’m guessing Google et al are aiming for the optimal ad load, and are fairly aware of what that is. “set as default” is just one click away to switch to duckduckgo or bing or whatever, and Twitter seems to have found what the limit is.

        1. No need to have an article on the things you mentioned except for the misstep with the bricking of repaired iPhones instead of deactivating Touch ID.

          Apple has never raised the price of any iPhone. The newest 16GB base model has been released at $649 for a long long time.

          “mostly mandatory”? I’ve never bought AppleCare for any Apple product, and have had excellent service at Apple Stores.

          1. Apple have introduced bigger, more expensive, iPhones. The basic 16GB model is becoming unusable with pictures, movies, apps, even the basic OS taking up ever more space.
            I’m curious as to why you needed service at the Apple Store. Was something broken , not working, hard to figure out ? Did it cost you anything besides time to get it fixed ?

          2. The iPhone 6 and 6S were bigger but were not more expensive – still $649 unsubsidized at intro. The Plus models formed a second more expensive line introduced alongside the basic models with some additional hardware-based features, like even larger screens. But one doesn’t have to get a Plus model to get the best iPhone processor or the latest core iOS features, like 3D Touch or Live Photos.

            The 16GB model is unusable for those who leave lots of apps, media, and photos on their phone. I used the 16GB model for about three months, and it was not for me. But for those who are able to have their media and photos in the cloud, or do not have much media, it is usable. And it provides an entry point for those who are switching to a smartphone for the first time.

            The Apple Store replaced a keycap that I broke off on my 2011 MacBook Air for no charge. They offered me a new iPad 4 for $99, or a new iPad Air 2 for $299 when my iPad 4 died almost three years after I bought it. In 2014, they diagnosed a hard disk problem with a 2008 MacBook Pro for no charge. No device had AppleCare nor were still within their original warranty.

          3. ‘Misstep’ is certainly a genteel way of putting it! 😉
            What kind of sugar is on that coating?

          4. No sugar, no coating. I said it was a misstep, and a misstep it was.

            From Apple today:
            “Some customers’ devices are showing ‘Connect to iTunes’ after attempting an iOS update or a restore from iTunes on a Mac or PC. This reports as an Error 53 in iTunes and appears when a device fails a security test. This test was designed to check whether Touch ID works properly before the device leaves the factory.

            Today, Apple released a software update that allows customers who have encountered this error message to successfully restore their device using iTunes on a Mac or PC.

            We apologize for any inconvenience, this was designed to be a factory test and was not intended to affect customers. Customers who paid for an out-of-warranty replacement of their device based on this issue should contact AppleCare about a reimbursement.”

            Apology, reimbursement!, security still protected.

          5. They did end up doing the right thing. They fixed what they broke. Everything else was fairy dust.

        2. The difference between Apple and its business model and these other companies is that the monetization is transparent with Apple – the user pays, and decides what to pay for. There’s no third party with its own objectives that has to be served, and no equivalent conflict between the payer and the user (see this earlier piece: http://techpinions.com/when-your-users-arent-your-customers/32823). You can object to Apple charging too much, wanting you to pay for new services, or not providing enough storage in its base tier devices, but those things aren’t being forced on you, unlike advertising.

          1. Nothing force one to user Google Facebook twitter the same way that they are not force to buy apple products in fact it is even easier to stop using those services then switch to a new one than switching from an IPhone to Android

            Also Ads based services such as Facebook Google twitter etc are as transparent as buying a phone when is come to awareness

          2. It’s the bait-and-switch that’s the difference. You’ve never been forced by Apple to start paying for something that was previously free, or been bombarded with more advertising (or any advertising) where previously there was none or less. Once you’ve paid for an Apple device or service, it’s yours, and the conditions don’t change.

          3. I agree however my point was one scoop sell of products such a IPhone are prone to lead company to over monetization due to due of awareness when it comes to costs and also advertising to convince user to pay as much possible

            And to counter your agurment about services company bombarded user with ads having working in this industry I will say is the opposite those big companies tend to prefer to create new services that provides more space to sell more ads than destroying their money making platform with too much ads

            What you consider to be to much ad from Google search are simply the clone amazon features of Google search that user trigger with shopping keywords as they do when going to Amazon in fact these shopping ads is well love by user and advertiser alike due to the relevance

          4. How are Google’s ads forced on you when you can use a different service, app, even set them as default ?
            How are Apple’s warranties or 3x more expensive repairs NOT forced on you when you can discover months after a 3rd-party repair that Apple decided to brick you phone because of it ?

          5. Yes, you can opt-out, but they are forcing you to do so. What was perfectly usable yesterday became unusable today.

            I’ve already said it looks like Apple made a mistake in choosing their solution to a security issue. Apple should’ve just turned off TouchID instead, plus they should’ve made it better known that 3rd-party Home button repairs would cause a security problem.

      2. is that a way of telling me that the Apple way of over monetize their own user are good unlike the Facebook, Google, Twitter?

        1. Yes, I guess it is. All of the Apple monetization is opt-in — you add it if you think it provides a benefit to you — which is unlike the squeezing in of more ads that requires an opt-out to avoid.

          Instead of having more ads, Facebook, Google, and Twitter can increase monetization and not annoy their users by having the same number of much more relevant ads.

          1. Yes, if I’m happy with the overall experience I don’t think we can say it is over-monetization, rather it is just monetization. I would think Facebook et al will strive for the latter, but could stumble and fall into over-monetization if they don’t do ads well.

          2. Therefore in your mind over monetization apply only for ads based platefom or pays service 16 GB IPhone 6s in 2015 as nothing to do with trying to suck money out of user as much legally possible?

          3. As I have already explained, the key difference is widespread dissatisfaction in one case and widespread satisfaction in the other case.

          4. Nope, that’s not what I said at all. There is widespread dissatisfaction with obnoxious ads and tracking scripts, that is happening now on many websites. I suppose the question is whether Google et al succumb to the temptation to cram more ads down our throats or whether they do a good job with ads. If they do a good job and I am still satisfied with the overall experience then I would not say they are over-monetizing. But their business models do lean that way. In Apple’s case the financial motivation is the opposite, away from over-monetizing. I’ve tried to explain this a number of times and you’re just not getting it, your personal opinion of Apple’s prices simply are not relevant.

          5. À widepread dissatisfaction with Google Facebook twitter because of intrusive ads? Do you have proof for this sweeping generalization?

          6. The problem with your argument is that you’re taking Facebook Google twitter as exemple to argue about a problem that exists on very bad Web site and Apps that is like someone using Apple to argue about bad phone from a Chinese OEMs because both make are hardware

          7. No, over-monetization can apply to other than ads-based platforms. For example, if Apple today began charging for using Maps or Find My Friends data, or sending iMessages, then I’d say Apple is ruining the existing user experience and over-monetizing. Or if Apple began charging to visit the Genius Bar. Basically, if Apple took what was free before, and began charging for the exact same experience, that would be over-monetization to me.

          8. What if I said that encourages user to buy 16 GB IPhone in 2015 can be described as that because this strategy is designed to force user into a no win situation a money opportunity for Apple wouldn’t you agree that too can be described as over monetization?

          9. If Apple’s actions were causing widespread dissatisfaction you’d have an argument. But this is not the case, Apple has very high customer satisfaction rates. I’ll just paste what I said to Mark Jones: “Apple will always do some things that cause some dissatisfaction for some users, but this is not the same as widespread dissatisfaction.”

          10. Apple doesn’t force anyone to buy a 16GB iPhone. If one thinks iPhone is over-priced, one can buy something else.

            I’d limit the word “over-monetized” to situations where a company degrades an already existing user experience in order to get more money out of it, like the examples in the article and in my earlier response. Otherwise, the word loses any unique meaning, and one might as well just say over-priced. But I think the point of this new word is to bring out a particular type of situation that’s occurring.

          11. So that’s the answer to my previous question. Gotta love you business types an your particular jargon. It’s called “milking it” folks.

          12. Oh I get it now: you don’t like nuance, and you don’t like businessmen apparently, so any nuance gets the reaction, “you business types”. I was puzzling over your reference to my use of “buzzkill business terms” in the other article.

            I do like the term “milking it”, that’s great. As long as you can apply it to both Google and Apple. I have a Google Account (yes, I admit it), and I have a Twitter account, and you know I have Apple devices.

            Funny story: lately I have been bombarded with emails from Twitter and Google about using some new service or other (Business Twitter Ads, etc.), and something or other from Google. While, quite on my own, I actually only just decided after years of using Apple devices, that I wanted the extra 500GB iCloud space from Apple because all my kids are now taking photos and videos, etc. But, for the life of me, I couldn’t figure out how to get it. I tried in my System preferences, in iTunes, online in my iCloud account, every where. Finally, I found the little button to add some storage. Yep, Apple sure knows how to milk it.

          13. I don’t like business as a discipline, it’s necessary, but to me, personally, it’s even less fun than balancing my checkbook. When I comment here I bring one user’s point of view. Not being a financial stakeholder, it’s ‘cough’… not my business.

            My understanding of “over-monetization”, from this conversation, is nothing new. ‘Milking it’ fits my understanding quite nicely. My user reflex is to view being ‘milked’ with suspicion. Nuanced enough for you?

            If you haven’t already, may I suggest some Carlin.
            http://www.youtube.com/watch?v=4BtzaYpivFM

          14. If you haven’t already, may I suggest you follow the fascinating discussion between Space Gorilla and Kenny.

            In a nutshell:
            The business of Google is such that it tends to degrade the daily user experience in order to continue to support itself.

            The business of Apple is such that it tends to improve the daily user experience in order to continue to support itself.

            If you don’t agree with that, you could, like Kenny, try to argue that ads are a great thing, and the more of them the better; and that unrelated aspects of Apple’s business, that don’t intrude on daily user experience, make for a worse daily user experience. Good luck.

          15. You disagree with both my statements, or both the companies?

            You can disagree with the degree to which Apple successfully improves the daily user experience, or the degree to which Google tends to degrade it. You can also agree or disagree that these distinctions are important or relevant to a discussion such as this.

            But it is hard to disagree with the notion that Google is more dependent on “getting in your face” to gather daily crumbs from you, while Apple’s main benefit is your initial purchase of your device and the satisfaction with it that would encourage you to buy another. Those just are the respective business models. Are you saying they aren’t?

          16. I disagree with both companies, with Space Gorilla and Kenny as their proxies. I do not bestow admiration to Apple, Google, or BMW for that matter. In context, if forced, I disagree less with Kenny.

          17. Milking it generally and historically has had a negative connotation, so I believe it definitely applies to supposed enhancements (or lack thereof) that degrade the user experience. I’m sure that’s what everyone thought when Steve Jobs said, about 20 years ago, that Apple should milk the Mac for all it’s worth while moving on to the next thing.

            But would “milking it” include the offering of new optional services and accessories that extend and/or improve the user experience for a number of new contexts?

          18. Milking it can also be the ever so incremental addition of services that also collectively can keep you in the ecosystem. A very prominent example is the first iPhone. It launched with only 3G, at a time feature phones had 4G, and 4-6 months later a 4G version was released. Milking it is also non upgradability, so is “thinner”.

          19. Your example is mixed up, but regardless, there are reasonable technical and market explanations for Apple’s delay to 3G; however, I’m sure you’ll still think Apple is milking it.

            Your mixup: The first iPhone in 2007 was not 3G; it was 2.5G EDGE. The second iPhone was called iPhone 3G for 3G, which was released in 2008. So you were actually referring to 2.5G vs. 3G.

            As for explanation: Go back to 2006, and this from Palm’s CEO – “We’ve learned and struggled for a few years here figuring out how to make a decent phone,” he said. “PC guys are not going to just figure this out. They’re not going to just walk in.'”

            There’s no way Apple was going to take any chances on the critical cellular phone part of its design. Aiming for a 2007 launch, it chooses to design around a mature and cheaper 2004 Infineon PMB8876 chip that has support for AT&T’s EDGE and GSM but not 3G. (Infineon doesn’t start selling its PMB8878 baseband chip with 3G support until 2008.) Plus AT&T’s plans are to fully launch 3G in mid-2008, and to reach 350 leading US markets by the end of 2008. So Apple makes the conservative choice to put 3G in its second model to coincide with AT&T’s mid-2008 launch plans.

            Imagine if iPhone 2007 had cellular problems right out of the gate. Apple would’ve been laughed right out of the market. As it was, the lack of a physical keyboard generated more than enough mocking.

            (BTW, I’m not a business type; I’m a product engineer.)

          20. “Your mixup: The first iPhone in 2007 was not 3G; it was 2.5G EDGE. The second iPhone was called iPhone 3G for 3G, which was released in 2008. So you were actually referring to 2.5G vs. 3G.”

            You’re right, I misremembered. That’s only worse. I had a 4G (or what they were selling as 4G at the time) Windows phone when the iPhone launched, nonetheless.

            I do remember wanting to use an external Bluetooth keyboard, and the profile wasn’t available. That waited for yet another mode. ‘Milking’ it.

          21. What’s worse is you were sold a big load of crap; your Windows phone obviously wasn’t 4G. 4G as defined by ITU is 100Mbps.

            The ITU blessed WiMax and LTE as 4G. The first Wimax smartphone was the HTC Evo 4G in mid-2010. Ignoring ITU, T-Mobile declared its 12Mbps 3G-HSPA+ network as 4G in order to compete with Sprint, and in early 2011, AT&T copied that 4G branding for its HSPA+ network as Verizon was beginning the launch of its 4G (LTE) network.

          22. That’s right, I agree with you, it’s why I said ‘what they were selling as 4G’. Still it beat EDGE, and Apple offered the same load of crap in two steps within the year. They’re all selling a load of crap, but they are not all held equally accountable.

          23. “Apple offered the same load of crap in two steps within the year.”

            You must be smoking some really good Everything Bad Apple™ stuff.

          24. Don’t quote selectively…
            I was referring to the cellular technology, thus milking it.
            Drinking Everything Apple Good Stuff?

          25. Whatever you’re saying is factually incorrect. Whatever you’re smoking is some really good stuff. 😉
            Usually emotions clout people’s opinion but you’re an special case where hatred is twisting facts.

          26. What are the correct facts, according to you then? What I said as factually incorrect originally, was corrected by Mark Jones, was actually less severe. If I’m factually incorrect, then Mark is incorrect.

          27. The Windows phone mfr sold you a possibly at best 3G phone as a 4G phone. Apple sold EDGE as EDGE. No BS marketing.

            You see everything through the lens of Apple delaying capabilities so as to have something to sell in the next model. But as an engineer and product developer, I recognize that choices need to be made based on technology maturity, product price point/margin, available resources (i.e., A-team-quality staff, supply chain capacity), schedule risk, etc, long before a final product goes to manufacturing.

          28. Again, I agree that it was probably a 3G+ phone at best (sold as a “4G”). My iPhone evolved to that same 3G+/”4G” after two generations (I originally thought it was one, you corrected me). Same BS marketing.

            Not that the network BS marketing was under Apple’s control or fault. What was milking it was the staged evolution to the very same standard my Windows phone had. The original iPhone could have launched as such. Two rapid launches, with incremental benefit, is milking it.

            My Bluetooth example remains.

          29. First, what do you mean by “two rapid launches”? Apple launched iPhone once every 12 months, except once at 15 months for the 4S; while most other mfrs launched multiple times in a year. Apple is definitely not rapid in the cellular world.
            Second, in 2007, no carrier had 3G+ in the US. So definitely BS on the Windows phone.
            Third, I think you’re still confused. Apple didn’t advertise 4G for 3G+.
            – iPhone = Apple advertised EDGE
            – iPhone 3G, 3GS = Apple advertised 3G
            – iPhone 4 = Apple advertised 3G (7.2 Mbps down and up)
            – iPhone 4S = Apple advertised faster 14.4 Mbps 3G at launch (i.e., “8 hours of 3G talk time”) (This is what AT&T/T-Mobile was calling 4G for almost a year before the 4S launched.)
            – iPhone 5 and after = Apple advertised 4G-LTE
            Fourth, I’m sure enabling Bluetooth keyboards were and still are at the bottom of any priority list at Apple. The same thing just happened with the new 2015 AppleTV and Federighi just said Apple data showed the majority of Bluetooth users were developers. Apple focused on getting a few very important things very right for the original iPhone – that’s always been their MO.

            Simply put, you don’t like the way Apple does things, and you’re attributing motives to Apple as fact when they are only your opinion which you certainly are allowed to have. But you have no proof and there are plenty of reasonable alternatives to explain why Apple does things the way it does (some of which are alternative opinions but I am not presenting them as facts, just possibilities).

          30. Thanks for the refresher, I admit I was commenting using my impressions.
            Which two phones launched really close together, enough for Apple to offer a gift card? Was it the 3G followed by the 3GS?
            I stick to my guns that I had better than EDGE in 2007.

          31. No iPhones launched close together – June 2007, July 2008, June 2009, June 2010, Oct 2011, etc. Are you misremembering that iPads were launched close together?

            You probably had better than EDGE in 2007, but it was 3G (which Verizon rolled out in 2004-2005), definitely not 3G+ (12-14 Mbps) or 4G.

          32. So you’re implying that it was mischievous on Apple’s part to not include Bluetooth profiles on the first iPhone, so that they can include it next year iPhone and milk their customers.
            What about copy paste in first two generations of iPhones? Was that a great conspiracy as well? Also their were video calling phones years ago before iPhone but three generations of iPhone didn’t have this functionality. Hmmm. Another conspiracy?

          33. Mischievous? I actually consider being mischievous to be a positive quality. So, no. Let’s go with sinister, or at least, arrogant and self serving.

            Regardless of whether it was 3G, or 3G+ doesn’t really matter. What matters is than a premium device shipped with a critically important obsolete technology(EDGE), while knowing full well the next device (in very short order) would be current. and while lesser phones were current.

            Moving on to evil…

          34. Misremembering and mixing up facts to support your position is one thing. Let’s not now also intentionally revise history; that would be evil.

            EDGE was current in mid-2007 on AT&T (Apple’s only launch partner), not obsolete. If Apple launched iPhone for Verizon, I’m sure it would’ve been 3G. It was not a coincidence that iPhone 3G coincided with AT&T’s 3G rollout in 2008.

            One year was not “short order” in 2007, when Nokia and others were launching new flagship models every 3-6 months. Apple was criticized for taking a whole year to launch its second iPhone.

            The lack of Bluetooth keyboard support and 3G doesn’t really matter. What mattered is Apple focused on and got the important things right on its revolutionary iPhone, so much so that iPhone is widely acknowledged as having changed mobile history. Tomi Ahonen, mobile SME and harsh critic of Apple, wrote in early 2007 that iPhone, even with all its shortcomings (i.e., it’s not a smartphone since it doesn’t have 3rd-party apps!), would divide mobile history into two eras: Before iPhone and After iPhone. And because Apple got the first one right, he was right about that.

          35. EDGE was on it’s last breath when the iPhone launched and you know it. Several competing models, less expensive, had launched. On a phone that would have committed the customer for two years no less.
            My evil reference had nothing to do with networking technology. That is left to each person’s respective imagination.

          36. If EDGE was as obsolete on AT&T as you claim it was, people should not have bought iPhones. But millions did. If EDGE was so dissatisfying in use, the millions who paid big bucks for iPhones should’ve returned them.

            In your version of history, iPhone should’ve been a disaster on the order of Blackberry Storm, Microsoft Kin, Amazon Fire, and HTC First. Or maybe even a “success” like the Palm Pre, which forced Palm to sell itself to HP, and soon after, to put itself completely out of the smartphone business.

          37. No sir, just that it launched too soon. Before it was ready, contrary to what we were being told. The cut/paste example was brought up already.
            A broader ‘milking it’ is a yearly release cycle. This hold true for everyone, and yes, they’re all milking it.

          38. In your view, everyone who participates in capitalism-based commerce is milking it. Everyone who launches a brand-new revolutionary product that’s not already fully mature and comprehensive is milking it. And if those products don’t really work, they’re certainly milking it. What more is there to say.

          39. Don’t forget that capitalism includes customers, and it’s that direction I’m coming from.

          40. “What mattered is Apple focused on and got the important things right on its revolutionary iPhone, so much so that iPhone is widely acknowledged as having changed mobile history.”

            I remember one of Klahanas comment where he said that iPhone wasn’t a revolutionary device but iPod Touch was. Go figure.
            How can you reason with a person who even doesn’t believe that iPhone was a revolutionary product. He is simply a delusional posing as free thinker but to me he is well gaurded prisoner of his own emotions. He can’t think or make an opinion rationally and objectively. He simply can’t. Even he makes up his own definitions of well defined concepts or twist facts.
            I quite like Space Gorillas comments about this so called nerd group, that why they behave like that even I’ve requested John Kirk to write an article about Apple haters.

          41. Then you should also remember that I also said only one of them could be revolutionary. Whichever came first.

          42. Then it’s the iPhone. But we could also say it was the iPad since that was being worked on in the lab first (years before 2007) and then Apple realized they could make a pocket computer based on the same tech. But we could also go back to the Newton platform which Apple started working on in 1987, or go back to 1983 when Steve Jobs essentially described the iPad/iPhone. In the end we probably have to pick the iPhone since it met the additional requirement of being successful enough to shift the direction of the entire mobile industry.

          43. What do you mean by “in very short order”?
            Reply when you’re not high on Evil Apple™ stuff.

          44. If you think that shipping THE flagship phone of the century, with antiquated cellular technology, at a time when better was already available on the same network, knowing full well that within a year you will be correcting that technology, and the customer is committed to a 2-year contract, is okay, then it’s you that is high.

            I’m just on coffee…

          45. Well probably you’ve read Mark Jones reply about iPhone launch schedule. No two iPhone launched within a year. So you were factually incorrect about it.

          46. I would agree with this. Essentially if Apple starts doing things that cause widespread dissatisfaction, then we’re wading into over-monetization. But Apple is financially motivated to not behave in this manner. Of course Apple will always do some things that cause some dissatisfaction for some users, but this is not the same as widespread dissatisfaction.

          47. I was not going to participate in this thread, until I saw this comment. Please explain to me what is really opt-in? If you mean “because you bought an iPhone”, we’ve beaten this topic to death. If not, then what is opt-in? Which App I can only get exclusively from Apple’s store?

          48. My use of opt-in referred to additional (optional) paid Apple services (like Apple Music, Apple Pay, additional iCloud storage, iPhone Upgrade Program, Belkin Screen Protector) and accessories (like Apple Watch, AppleTV).

  2. “I’ve certainly noticed the increase in ad load and it’s becoming more and more bothersome.”

    I cannot for the life of me understand why on Earth a technically adept person does not use adblocking if they are bothered by ads on the web.

    In mobile Safari on my iPad I see none of the ads you highlight in your screenshots, because I have 1blocker installed. And for devices or apps that cannot benefit from 1blocker, I use Weblock, which doesn’t work as well but still provides a night and day difference vs no blocking.

    Sure, non-technical people might not know that they can choose to block ads for free on the desktop or for a pittance on mobile, which is why every computer I touch gets adblock plus installed in its browser with the “allow people who bribed us to show ads” option unchecked. But tech analysts and tech writers who complain about ads make no sense to me.

    1. Agreed. I use Ghostery on my Mac, such an improvement in using the web since it also blocks tracking scripts and other garbage. I also find it interesting that some website elements won’t load unless I whitelist a site, mostly WordPress plugins.

    2. I’ve used ad blockers, but often they do strange things besides blocking ads. Like remove the Facebook like icon or remove the comments section to an article.

      1. Yes, anything ‘scripty’ can get blocked, but you can easily whitelist sites or make specific exceptions across all sites for things like Disqus, or social icons. Ghostery even blocks Adobe Typekit unless you tell it not to. But it is ridiculously easy to configure Ghostery for these kinds of exceptions. I find it fun watching the number of obnoxious scripts Ghostery is blocking as I load a page (it shows a list as it blocks and then the list disappears). CNN for example has 13 ads/scripts that get blocked for me, and man does it ever speed up the website, it’s great.

      2. That’s why I use adblock plus, despite its downsides — the blocking scripts are very well tuned and hardly ever result in reduced functionality.

        In the “that’s not a bug that’s a feature” department, I run a social network annoyance removal script specifically to remove facebook likes, google pluses, and so on.

      1. Re instagram ads: Which is why I use weblock, which, in the tradition of privoxy on the desktop, blocks ads from all apps on my ipad.

          1. “If you don’t want the NSA to eavesdrop on you, just stop talking on the phone.”

            “If you mind the ads on TV so much, just don’t watch any”

            I prefer to live like a human being, not an animal.

  3. Advertising as a business model suffers from the problem that it is a fairly constant 1.2% of GDP over the past century in the US. Google revenue from the United States was about (43%x$65bn=) $28bn compared to total US advertising of (1.2%x$16.5tr=) $198bn. If Google is hoovering up about 15% of US advertising spend then that suggests that they are rapidly running out of room to grow, perhaps it is no surprise that they are increasing the advertising load on their website.

    I see two issues; 1) the prospect of Google becoming a low growth company could really hammer their share price and 2) the advertising business may well be too small to fund Google’s expansive ambitions. Navigating this will require very clever thinking of the part of management and a rather generous helping of good luck.

    1. Thanks, I’ve been too lazy to look for total ad-spending but I’ve always wondered what is the basis of these endless-growth forecasts that seem to underlie GOOG/L P/E ratios.

  4. Good article, but the author left out an even better example of over-monetization (AKA “ad-cramming”). No one uses physical telephone books any more, since Google long ago replaced those large, clumsy, hard-to-read phone books. When you do a google search to look up your doctor’s phone number in order to make an appointment, Google’s results consist of an endless list of worthless referral and doctor-rating services such as healthgrades, ucomparehealthcare, healthcare4ppl, vitals.com, angieslist and so on. This makes your simple lookup of a phone number frustrating and time-consuming. Google has clearly gone past the tipping point of over-monetization, and I would not be surprised to see a relative loss of market share for Google in the search business.

    Similarly, many Youtube videos are being hampered by intrusive ads. No longer content with simple banner ads or “click here” popups, Google now inserts non-avoidable video ads in front of the video content. Some of these are 2+minutes long, analogous to infomercials. Short 10-to 15-second video ads may become acceptable to viewers, but longer video ads cause me to avoid the content.

    1. Yup, YouTube ads are totally irrelevant – I’m always just looking for where to click to get rid of it. And when I’ve actually read, watched or listened to them, I’ve never thought – hey, that’s what I need.

  5. We would not be discussing over-monetization or degraded user experiences if ads were clearly getting better (more relevant, more fitting) instead of just getting more. Is there research on whether the ads we see are better than before?

    Personally, when I’ve visited sites (on the desktop) that I haven’t ad-blocked, I haven’t found that ads are getting better, so why not? (I don’t ever look at the ads on my phone.) Google and the media continually remind us that Google has the best AI to use to figure this stuff out — have they hit a wall/obstacle? Have they become distracted, unfocused?

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