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I have no issue with ads in principal - it works for all other forms of media.
There are a number of ways that publishers and authors can use advertising to cover some (or even all) of the cost of a book.
Certain non-fiction books would even be enhanced by ads, such as hyperlinks, recommendations, etc. Most websites and blogs work that way already.
Publishers can place ads on their website and point of sale - 'This ebook is brought to you by...', etc. The ads for other books by the same (or similar) author that have been in paper books forever would work.
Mobile phone apps often have a free version with ads and an ad-free version that costs money. I don't see any reason that ebooks can't use a similar scheme.
If you combine all the different types of ads I think the publishers can recoup a lot of their costs without actually intruding on the text of a book.
I'd like to see very cheap ebooks ($5?) subsidised by advertisements (within reason) with the alternative to pay more ($10-$15) for the ad-free edition.
Technology, especially always-connected reading devices can make advertisements targeted and up-to-date. Online I see ads that are localised to me (well, actually they think I'm on the other side of the country due to the way my ISP channels my data...).
I think there are 2 opinions on this:
(1) Ads are 100% bad and I won't buy books with ads
(2) Ads are OK (depending on how intrusive they are if the books are priced accordingly)
I think opinion 1 is unrealistic and/or unreasonable.
The publishers and their customers will reach a balance eventually. I can't see authors or readers accepting intrusive ads during the narrative of a novel. Are ads between chapters OK? I think I wouldn't mind too much if there was a short note after every 2nd chapter or something. I have no problem with ads at the point of sale or at the front or back of a book.
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