Adfunded

Adfunded, or advertising-funded, refers to a business model in which a product or service is provided at little or no direct cost to end users, with revenue primarily generated from advertising. In this model, advertisers pay to reach the audience, usually through display ads, video ads, sponsored content, or data-driven targeted advertising. The model is common for digital platforms such as websites and mobile apps, but it has historical roots in traditional media such as newspapers and broadcast television.

In practice, ad-funded services may rely on impressions (CPM), clicks (CPC), or actions (CPA) to price advertising. Some platforms combine advertising with paid subscriptions or premium features, but the core funding remains advertising. Data collection and targeting are often used to improve ad performance, which raises privacy and consent considerations and can prompt the use of opt-outs or privacy controls.

Advantages of adfunding include free or low-cost access for users, the potential for rapid scale, and incentives for content generation or platform development. Challenges include dependence on advertising market cycles, the risk of ad fraud or poor ad quality, user fatigue from ads, and regulatory pressure over data privacy and transparency. Ad-funded models can also influence content strategy and editorial independence, prompting calls for clear separation between advertising and content in some contexts.

Today, ad-funded models coexist with subscriptions, donations, and commerce. Trends include greater emphasis on privacy-respecting targeting, alternative ad formats, and evolving standards for measurement and accountability.