> True currently. You assume however that TV is going to be the digital entertainment interface of choice for the foreseeable future. In fact it's overwhelmingly mobile already and in the next 10 years (as an AR developer) we see that moving toward AR displays with complete replacement for a significant portion of the population by 2030.

I actually don't disagree with this at all (AR is absolutely the future), but I think that people will be incredibly averse to advertising in AR interfaces outside of an entertainment context. As seen with mobile, the device manufacturers will be the gatekeepers -- and the gatekeepers who put consumers first will win. Apple didn't win mobile because they had a better phone; they won mobile because they defined the product space in a way that gave them the type of margins that enabled them to put the user experience first and foremost. They didn't need a second revenue stream from advertising or apps to succeed. It wasn't an accident that the first iPhone didn't have either of these capabilities -- apps were an obvious idea (and had existed on PalmOS and Windows Mobile), but Apple wanted to get the UI out there and make the user experience great before introducing 3rd parties whose interests would cloud their decision-making. And the original iPhone was a legitimate leap forward in mobile UI at the time as a result.

I actually don't think that TV is going to be the digital entertainment device of choice even in the near future -- my entire premise is that the ad dollars that are disappearing from TV are simply drying up along with the medium and won't necessarily be spent on advertising in the future. Mobile is a big part of that, but mobile video is a completely different market than TV video and the advertising model is very different as well.

> Here is where I have the most disagreement. When you reduce the channels in which people interact, there is extremely limited quantity. The overwhelming bulk of digital advertising dollars go to Google and Facebook. We have been talking for years about who controls "virtual ad space" [1].

I'm actually speaking about it on a "per impression" basis. Impressions are the bare minimum measurement you can have in any form of advertising -- it's a measurement that has some sort of correlation to the number of times your message was seen by a consumer. Impressions are qualitative as well -- a 30 second ad spot is a much better quality of impression than a banner ad or even an interstitial.

There's also a difference in a "lean in" experience (typical digital experience where there is some interactivity or user action expected) versus a "lean back" experience (turn on a TV show, sit down and watch it). Users in "lean back" experiences are much more accepting of "high quality" advertising, and it becomes easier to convey a nuanced brand message through imagery, sound and voiceover. That message can then be reinforced and shaped over time through more passive advertising (display ads both online and billboard-style). Users engaged in "lean in" activities typically ignore advertising because they're looking for the next opportunity for interaction (or become impatient if they're told they have to wait until an ad is finished playing).

Overall, my hypothesis is that unless publisher inventory can shrink dramatically on a per-impression basis, advertising is not going to be a viable revenue stream for anyone but Google and Facebook. The companies that win will be the ones that can do it without advertising, and do so by putting their users' needs ahead of any others. If you think of it that way, sites like Google and Facebook simply become the filter that the user trains to their preferences, and when they are interested in a product / category, that algorithm is trained to know the user's interests and present relevant options. Users are outsourcing the decision-making to algorithms because there is too much choice -- and it's going to fundamentally transform advertising (if not eliminate it entirely).