Getting rid of web ads for your engaged users

I've been thinking for a while about how annoying advertising is. I don't like it as a fundamental business model because it is based on distraction and annoyance, or more specifically intrusion. Intrusive ads are intrusive ideas being injected into your subconscious. Nobody actually wants those intrusive ideas there.

One of the solutions that occurred to me is a variation on the Freemium model. Rather than charging money to remove advertising, why not simply allow the users to share more data in exchange for removing advertising?

That data, in other words, what might be considered good clean data would be potentially very valuable. As opposed to a pay wall, or a login wall, we'd be giving away all the services for free, but only people who want to engage those services, who bother to create a user account would be free from the advertising annoyance. In other words we'd reward engagement with an ad-free experience.

How does this work financially? Engaged users will inevitably be the minority of most free services. You won't take a very significant hit on the advertising income, assuming your particular service doesn't serve primarily engaged users. (ie. anything with a pay or login wall, or services that are meaningless without engagement, Facebook perhaps?) And, on the positive side, you will be gaining valuable information in terms of demographics and any content generated by the engaged crowd that you can then sell.

The currency would be a little lack of privacy in exchange for no advertising. I bet a lot of people would bite. The more people you would engage, and not show advertising, would in turn build buzz and momentum for your service (assuming they like using it and would want to evangelize, if it's free, useful, and enjoyable, that should be a given, but is it?) and generate a valuable database of information.

One important point is that the demographic info of the engaged users could be used to zero in on the ad demographic for those who visit but never engage. (they aren't necessarily a different demographic, just less engaged.)

Seems like a win-win.