Advertising-only business models have been “incredibly destructive” for journalism, according to Wikipedia founder Jimmy Wales.

In his keynote at virtual conference Big Data LDN, Wales explored how the quality of journalism has been impacted by the rise of the advertising-only business model adopted by social media platforms.

“The advertising-only business model has been incredibly destructive to journalism,” said Jimmy Wales. “And I mean this in two ways: I don’t just mean the advertising-only business model for the news itself, but I also mean the advertising-only business model for social networking, which has become an incredible driver of traffic for news.”

According to 2019 research from Ofcom, 49% of people in the UK access news via social media. Considering the rise of fake news, as well as a business model that favours the number of clicks over the quality of the content, Wales believes this is cause for concern.

“Advertising-only social media wants you clicking, it wants you addicted, it wants you outraged…the longer you’re on the site the more ads you’re going to see, the more you’re going to hang out, the more you’re going to consume the advertising content, and that’s direct revenue. It’s really hard for social media to say ‘we don’t want content’, as viral as it may be, as addicting as it may be, it’s actually low quality and it’s not doing the world any good. So what do you get? You get clickbait.”

Jimmy Wales: Advertising-only model destroys human values

He explains that this is partly due to the rise in programmatic advertising in which the process of buying and selling of online advertising is automated. This means that there is less incentive for the production of high-quality content.

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“The advertisers no longer need to care very much at all about the particular brand that they’re advertising next to…what this means is everything on the internet is competing head-to-head with each other where the only metric is did you see the ad? Have you visited that site? How long did you stay there and how many ads did you see? And so quality just gets thrown out the window.”

Wales explains that this commitment to high-quality information is why Wikipedia does not use the advertising model:

“Sometimes people say why don’t you just put ads on Wikipedia? …I say again the business model drives incentives and organisations follow the money, they follow incentives and even though we’re a charity and a non-profit, there would be a really hard to resist pull within the organisation to start thinking about what do we need to do to make sure we’re getting enough ad revenue?”

Many people in the industry have debated whether an alternative model for social media, such as a platform that relies on donations for revenue rather than advertising, could ever compete with the likes of Facebook.

“It’s been assumed that advertising is the only possible model for social media and it makes sense,” said Wales. “Imagine somebody opens a social network and says it’s for pay. Too few people would join and it wouldn’t be genuinely social and influential.”

“We’ve seen that advertising-only as a model is a formula that leads to the destruction of important human values. So how about a different approach?

WT.Social, a “non-toxic social network”

Last year, Wales launched his answer to this in the form of WT.Social. First launched in Germany, WT.Social now has nearly 500,000 members. Describing itself as a “non-toxic social network”, the platform does not contain advertisements and is instead funded by donations.

Wales said that the platform requires around one in 200 members to donate, and so far “people are paying voluntarily in line with our expectations.”

He explains that Wt.Social is designed to promote meaningful content rather than being driven by clicks:

“We’re not using algorithms to drive behaviour. We’re not trying to get people addicted. We’re trying to provide something that’s different, that’s new that’s meaningful. We want people to get on, we want them to say “hey this is good, this is interesting, I can actually help make this interesting for other people by sharing good quality content.”

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