The Disconnect in Online Advertising

Online ads suck, but it’s the main driver of today’s internet.

If you did not already know that, a great place to look for confirmation is Mary Meeker’s 213 slide Internet Trends deck, in which, slides 41 thru 110 are dedicated to the examination of how different forms of online ads are growing and that it’s accelerating.  It’s depressing really.  And the money slide is this one:

FireShot Capture 6 - 2016 Internet Trends Report_ - http___www.slideshare.net_kleinerpe

In summary, it will get worse before it gets better.

This is confusing to me.  Because, on the other side of the internet coin is that high quality, frictionless offerings are winning on the internet.  Look at the most successful apps. is eating the lunch of other hotel OTAs, primarily because it works so well.  Uber is a lesson in on-demand UX.  Airbnb’s user experience has helped its massive global network effect, in taking the big lead it has in global marketshare.

Ads, on the other hand, are pulling in the opposite direction.  1010!, a great game, is pissing me off with 5-second video after video, trying to get me to accidentally click on an app install.  And, I am not alone. Back to Meeker’s deck:


81% = Mute Video Ads
62% = Annoyed with / Put Off by Brand Forcing Pre-Roll Viewing
93% = Consider Using Ad Blocking Software

Here’s the slide:

FireShot Capture 7 - 2016 Internet Trends — Kleiner Perkins C_ - http___www.kpcb.com_internet-trends

This disconnect between how fast online advertising is growing while remaining a nuisance for internet users has made it tough for us to build strong investment theses for ad driven business models.  It’s also probably why we get turned on by technology that looks to improve the efficacy in the sector.

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