Jan 2, 2019 · 24m · a16z
a16z Podcast | Advertising vs. Micropayments in the Age of Ad Blockers
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gold bands on the timeline = statements, start to end. Hover to read, click to jump. CC turns on captions
In this episode of the a16z podcast, hosts Chris Dixon and Benedict Evans analyze the shifting landscape of digital media, examining how ad blockers, platform dominance, native advertising, and alternative monetization models like micropayments are reshaping content distribution and web economics.
How this conversation actually went
Every chapter scored 0–10 on four independent dynamics. Hover any point for the reasoning behind the score. How this is scored →
The host as informed peer 7.3 Guest teaching 3.3 Guest disagreement 1.3 The host pushing back 4.6
speaking balance: gold is the host, purple is the guest (3 minute bins)
Sharpest disagreement ▶ 2:29 Pushback on Apple Maps quality
Evans gently checks Dixon's hyperbolic claim that Apple Maps directs drivers off bridges, noting that Apple Maps is not terrible and that a quarter of the user base installed Google Maps because most users simply do not care enough.
Hardest push from the host ▶ 7:50 Refuting mental friction in micropaymentsDixon directly rejects the prevailing consensus against micropayments, attacking Clay Shirky's mental friction theory as based on an obsolete assumption that humans must manually authorize every transaction.
Biggest teaching moment ▶ 11:28 Historical escrow protocol SETEvans educates Dixon on the 1999 SET chip-and-pin tokenization protocol from his early investment banking career, explaining how early e-commerce escrow attempted to solve the exact privacy problem Apple Pay solved years later.
The host holds their own ▶ 8:30 Systemic critique of legacy payment railsDixon showcases technical expertise by analyzing Bitcoin's original whitepaper, proposing automated payment bundler architectures, and critiquing PayPal's fraud mitigation as an outdated extension of credit card systems.
the scores for every segment, with the reasoning behind each
| Chapter | Topic | The host as informed peer | Guest teaching | Guest disagreement | The host pushing back | Why |
|---|---|---|---|---|---|---|
| Impact of iOS Content Blockers on Mobile Web | 6 | 3 | 2 | 4 | Host Chris Dixon brings concrete product usage estimates regarding user behavior and power of defaults, comparing ad blocker adoption to Google Maps vs Apple Maps usage. Guest Benedict Evans adds technical context on webviews and performance impacts of ad tech scripts. | |
| Publishing Platforms vs. Open Web Distribution | 7 | 3 | 1 | 5 | Dixon reframes the ad blocking debate by arguing that closed platforms like Facebook Instant Articles are the true ad blockers and browsers, making Safari content blockers a sideshow. Evans agrees and shares traffic metrics from his own blogging history to illustrate platform dependence. | |
| Evaluating Micropayments and Payment Friction | 8 | 2 | 2 | 7 | Dixon strongly pushes back on traditional skepticism toward micropayments, citing the Bitcoin whitepaper and refuting Clay Shirky's mental friction premise by explaining how software bots can automate micro-decisions. Evans notes the historical friction and platform distribution challenges that have hindered past adoption. | |
| The Missing Web Protocol: Identity and HTTP 402 | 7 | 4 | 1 | 3 | Dixon and Evans discuss HTTP 402 payment codes and web identity protocols. Evans educates Dixon on the 1999 SET escrow protocol, which Dixon connects directly to modern Apple Pay architecture while criticizing legacy credit card security. | |
| Native Advertising vs. Bloated Banner Ads | 8 | 3 | 1 | 6 | Evans highlights how native platforms avoid heavy JavaScript tracking code by leveraging built-in user identity. Dixon criticizes mainstream publishers for bundling premium journalism with low-grade banner ads like diet scams that rely on accidental clicks. | |
| Publisher Monetization Models and Paywall Strategies | 7 | 5 | 1 | 2 | Evans presents a 2x2 matrix categorizing publisher strategies from hard paywalls to scale-driven native models like BuzzFeed. Dixon extends the discussion by analyzing Google's search ads as a rare example where monetization adds user value. | |
| Future Outlook for Digital Publishing and Media Reach | 8 | 3 | 1 | 5 | Dixon presents an optimistic macro view of digital publishing, arguing that expanding global smartphone reach and engagement time create a 1000x volume multiplier that outweighs lower unit monetization. Evans offers detailed demographic data on smartphone growth projections. |
Statements from this episode (18)
Benedict Evans: Most mobile internet usage occurs outside web browsers
“The majority of time spent online on a smartphone actually isn't inside the web browser. It's inside Facebook, and it's inside other apps.”
Chris Dixon: Only 5% to 10% of users change software defaults
“Five to 10% typically do things like that that aren't default.”
Benedict Evans: Only 25% of iPhone users installed Google Maps
“Only a quarter of the base have installed it.”
Dixon: Facebook is the new browser, RSS reader, and ad blocker
“In some ways Facebook is the new browser, it's the new RSS reader, and it's the new ad blocker all combined into one, And what's happening in Safari with plugins is a sideshow.”
Evans: Publishing via distribution platforms is a deal with the devil
“If you want to get read, you've got to be in some kind of a platform that's giving your audience, and increasingly that means Facebook, or it means Medium, or it means LinkedIn, or it means some other intermediate platform that kind of comes with an implicit a…”
Evans: Universal frictionless micropayments failed due to adoption barriers
“Getting that frictionless payment platform in there, and having everybody use it, is just been too hard so far.”
Dixon: Micropayment skepticism incorrectly assumes human decisions cannot be automated by software
“And, you know, this sort of Clay Shirky argument that no one will ever adopt micropayments because of the mental friction. That, that, that I think is based on what I think is a flawed assumption that micropayments presumes that a human is deciding every singl…”
Dixon: PayPal blocks 20% of international transactions due to aggressive fraud tuning
“The way PayPal deals with many issues is they simply block about half the world from transacting, right? I mean, there's an eBay, 20% of all internet, international transactions are blocked because the way they deal with the fact that their system is not built…”
Dixon: Web architecture should have included built-in identity and payment protocols
“That said, rewinding it would have been really nice to have built identity and payments in the first place.”
Dixon: Passing raw credit card details online is fundamental security flaw
“You don't pan, like the credit card system, you hand the password over to everyone. I mean, you would literally fail out of class if you submitted that in a project.”
Evans: Internet portals succeeded as a model in China despite US failures
“You look at China, portals did work.”
Dixon: 95% of Mobile Banner Ad Clicks Are Accidental
“I guarantee you on mobile, if there are any clicks on those ads, I bet you 95% of them are fat thumb fat finger accidental clicks.”
Dixon: Premier News Publishers Pair Great Journalism With Third-Rate Monetization
“You have the journal, the FT, the economists, the New York Times, all of these first rate journalistic institutions with top rate journalistic products bundled with very third rate monetization products.”
Evans: Hard paywalls significantly improve newspaper website user experiences
“When those newspapers did that, The page, the site experience got way, way better, because all the crap advertising disappeared, all the link bait headlines disappeared, all the taboola and the click on 500 other stuff disappears. You get white space on the si…”
Dixon: Google originally attempted to sell itself for $1 million
“They were trying to sell the company. And they tried to sell it for a million.”
Dixon: Yahoo outsourced search because web portals were considered superior businesses
“Search was well known to be a bad business and portals was a good business. So you had to search was a way to get them into your portal where you then show like celebrity gossip and then banner ads. And that's why Yahoo actually outsourced their search to Inkt…”