What is the Open Web’s Economic Future?

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AUTHOR

Henri Isaac, Associate Professor, Paris Dauphine University - PSL

What are cookies? How are they used for targeted advertising? How has the online advertising industry changed in recent years, and what are the consequences of these evolutions for the open web model? What does the future hold for the open web in a post-cookie world? The think tank explored these questions as part of its "Digital Economy" permanent commission. This short note provides an overview of the above-mentioned issues.

Historically, the web has developed mainly through access to content that is free because it is financed by advertising. From this point of view, it is based on a model that has been very prominent in the media for many decades, whether on free television or in the press. This advertising-financed model has already undergone several substantial changes in the digital space over the last two decades. Initially, a model similar to that used by traditional media was put in place, with so-called display advertising. Then the model evolved, with paid search engine marketing, mainly developed by Google. Later, social networks captured a substantial share of advertising investment, and the targeted advertising model gradually began to generate the bulk of revenues.

However, free access to content on the web thanks to targeted advertising could see its future jeopardised. Coinciding with the implementation of the General Data Protection Regulation (GDPR), major digital platforms such as Apple and Google introduced major technical changes to the way online targeted advertising works. These changes are already having an impact on the current advertising ecosystem. In 2024, this data will no longer be accessible, following decisions initiated by Google. The funding of the web through advertising could be significantly affected by these changes.

At the same time, emerging players in the digital space, led by e-commerce websites and audio and video streaming companies, are securing a growing share of advertising investment. These market transformations, which are already visible, could have a major impact on the advertising revenues of news publishers and change the range of free digital services available to consumers and citizens, leading to profound changes on the world wide web.

What impact are these changes having on the open web model? Can this model survive economically, and if so, how? Find out more in this short note!

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The members of Renaissance Numérique's "Digital Economy" commission

Henri Isaac (lead)

Associate Professor,

Paris Dauphine University - PSL
Philippe Caila

La Fabrique Digitale director,

Caisse des Dépôts Group
Benjamin Greze

Lawyer in the "Technologies, Media, and Telecommunications" division,

Pinsent Masons
Damien Jacob

Professor of web strategies, e-Commerce and e-Business,

Liege University
Carole Leboucq

Stake Holders Dialogues Manager,

Orange
Sophie Le Pallec

Public Affairs Manager,

GS1 France
Marine Pouyat

Expert consultant in data protection and privacy
Annabelle Richard

Associate lawyer in the "Technologies, Media, and Telecommunications" division,

Pinsent Masons