Ads that aren’t targeted aren’t all that profitable anymore. The instance would have to be absolutely massive to make significant money without really optimizing ads and then costs would, of course, go up so you need more data collection to squeeze more out of the ads. This is a big reason pretty much every social media site is imploding now. VC funding is drying up so they need to become profitable through shitty data collection for ads.
This is probably why Reddit really wants to funnel people in to the official app instead of just pushing ads through the api. They can really track you on the official app.
Think about how you would actually interact with ads if it was implemented the way you describe. Ads have very low interaction and people go out of their way to avoid them. It’s not worth it to pay for ads for people who won’t click on them.
The ad model is really destroying the internet. Early internet teaching everyone that everything should be free was a terrible idea. However, Lemmy instances aren’t businesses trying to turn a profit. If you just give them a dollar or two a month if you’re able, it goes a long way. Their monthly costs right now are likely only in the hundreds. If everyone chipped in a dollar they’d be more than taken care of.
I think we need to get out of that underpants gnome ads, ???, profit mindset.