Advertising is an intentionally complex system so that companies can clip the ticket at multiple stages throughout the process. Google should be broken up, but the whole ad tech system needs to go into the bin if these problems are going to ever get fixed.
https://www.forbes.com/sites/augustinefou/2021/02/15/how-muc...
> Three industry studies showed less than 50 cents of every dollar goes to showing ads.
Every penny of what is spent goes to showing ads, by definition. However, that doesn't mean that every penny goes to the publisher. The advertiser may look at the 60 cents being spent on everybody between them and the publisher and say "hey, I'm getting ripped off! I could be paying 4 cents/CPM instead of 10 cents/CPM!" but each middleman (usually) adds some kind of value to increase acquisition rate. For example:
* Identity providers who have lists of user IDs that belong to "high CTR" audiences (users more likely to click ads)
* Geo providers who tell the bidders where the User's location is so that they can target locally-focused advertisements to them
* User intent plugins, "abandoned cart" retargeting, product recommendation providers, etc. who look at user interaction events and build profiles of people who can be retargeted
* Exchanges which conduct auctions across multiple DSPs to get a better price for publishers while also making more inventory available to advertisers
At one company I worked for, we allocated impressions ahead of time. Based on prior years' data and viewer ratings of TV shows, we could predict the future, determining how many viewers a video or TV show would get, and then selling the advertising inventory based on that prediction. That shit ain't free!
All of these things are designed to increase your acquisition rate from x% to y%, where x > y. Sure, you could just pay $5,000 a month to a website to show a banner ad directly, but a larger % of your money would be wasted on users who are utterly uninterested in your banner.
> * Geo providers who tell the bidders where the User's location is so that they can target locally-focused advertisements to them
> * User intent plugins, "abandoned cart" retargeting, product recommendation providers, etc. who look at user interaction events and build profiles of people who can be retargeted
That's horrible! In a better world such practices would be made illegal and those involved would be hung, drawn, and quartered.
I guess this is a big and probably unbridgeable divide, some people think this sort of thing is obviously evil and others, like me, actually prefer it very strongly over a world where all advertising is untargeted but there is massively more of it because it's so much less valuable...
However, mine and many other folks' position is not preferring untargeted intrusive annoying ads over targeted intrusive annoying ads. It's preferring almost zero ads with maybe the rare, non intrusive easily avoidable ad on certain appropriate websites[1]. That is why we aggressively use ad blockers and go to great lengths to avoid the status quo.
[1] a shopping website having a _single_ banner on the home page announcing an ongoing sale for HP laptops is OK. However, if I search for lenovo laptops and I see a HP laptop as the first "sponsored" result....(Looking at you amazon).
And about tracking, I absolutely don't want my librarian running to my travel agent telling him I recently looked up france travel guides. The digital equivalent of this happens daily to everybody. It's simply a no-no for me, there can never be a justification for it.
The fact is that if you ban these two classes of practices, the whole of ad tech comes crashing down. I hope everyday for this to happen.
And so you're paying for the content you're reading as well?
However external data providers are used to retarget specific audience segments on said publisher's users.
If you want to sell ad impressions at reasonable rates, you'll need to provide audience segment targeting, otherwise the ad performance will be too low for brands to continue buying it at previous rates.
In a comment elsewhere in the discussion: accuracy of targeting is worse than random sampling https://news.ycombinator.com/item?id=43719816
2. Ads have existed for as long as commerce existed. Google became a trillion dollar ad behemoth before it started collected everyone's data by simply offering contextual ads.
Literally nothing in the ads business requires you to collect and sell so much of user data that it would even make Stasi pause and re-think.
I could provide a long answer but the gist of it is that the study is flawed. Among the reasons, they don't differentiate desktop and mobile traffic which is a massive measurement problem. They also use Nielsen DAR which is in itself a heuristic method of determining what age and gender a user is and thus is not a great pick as an oracle.
The study also does not mention click and bounce rates which are good proxies for targeting success.
Beyond the performance, the marketing and sales aspect of targeted advertising is also a strong selling point, no matter the performance.
> Ads have existed for as long as commerce existed. Google became a trillion dollar ad behemoth before it started collected everyone's data by simply offering contextual ads.
No, it didn't.
> Literally nothing in the ads business requires you to collect and sell so much of user data that it would even make Stasi pause and re-think.
It does because contextual advertisement does not provide enough volumes and lower performance (lower click rate, higher bounce rates, lower conversion rates).
Example: If 1/100 people read hockey-related content and out of those people, 1/100 pages read is about hockey, it means that you're reaching about 1/10000 page views.
Now if you do implement user tracking, you're available inventory is 1/100 page views.
Show me a non-flawed study that shows you need vast amounts of user data and tracking, for each user, throughout their lifetime to deliver ads
> No, it didn't.
Yes, yes it did. The skyrocketing revenue is attributable to increased internet usage across the globe, and Google outright owning a large chunk of it.
> It does because contextual advertisement does not provide enough volumes and lower performance
Extraordinary claims require extraordinary evidence.
> Example:
Example: if you collect and sell vast amounts of sensitive user data without user's consent, and the outcome is indistinguishable from random noise, are you more effective?
Example: if targeted ads are found to be somewhat more effective than contextual ads, is the lifelong invasive tracking of every user action a preferred tradeoff?
(It's quite telling how people defending targeted advertising never address the elephant in the room)
Extraordinary claims require extraordinary evidence.
> Example: if you collect and sell vast amounts of sensitive user data without user's consent
The users do give consent and this is handled by Consent Management Platforms and passed in the programmatic advertisement auction chain in the form of TC strings.
The fact that you don't know this is also quite telling.
> [...] and the outcome is indistinguishable from random noise, are you more effective?
But it isn't, and if you are making claims, please provided sources.
Why would brands and agencies pay additional fees for data if they would provide no uplift?
> Example: if targeted ads are found to be somewhat more effective than contextual ads, is the lifelong invasive tracking of every user action a preferred tradeoff?
Are users prepared to pay for the difference?
No. The users are tricked into giving "consent" through a plethora of dark patterns.
When dark patterns are removed, users refuse to give the information
> But it isn't, and if you are making claims, please provided sources.
Have you provided sources for any of your claims?
> Are users prepared to pay for the difference?
Still waiting for any source of your claims that:
- targeted ads are more effective
- ads require lifelong collection of any and all user data
- that without pervasive and invasive tracking ads are somehow prohibitively expensive
Well you're free to bring this up to the various data privacy national organisations in the EU.
But I see that we're moving goalposts.
> Have you provided sources for any of your claims?
One of many available links on Google:
https://www.sciencedirect.com/science/article/pii/S016781162...
> ads require lifelong collection of any and all user data
Data collected has an expiration date. This is also part of GDPR compliance.
> that without pervasive and invasive tracking ads are somehow prohibitively expensive
We're now going in circles, but essentially you're ad performance (brand attribution, clicks and conversion) will determine your expected purchase price per thousand impressions (CPM).
If your targeting isn't competitive, your inventory will not be bought or at a lower price.
This already happens for Safari and Firefox impressions.
> But I see that we're moving goalposts.
We are not moving goalposts. You literally claimed that users give consent to data collection. No, they do not. They are tricked into giving this consent because that's the only way ad industry can obtain consent to livelong invasive tracking.
> Have you provided sources for any of your claims?
> One of many available links on Google:
> https://www.sciencedirect.com/science/article/pii/S016781162...
Let's see what the paper says:
--- start quote ---
Our simulation study reveals that more than 50% of audience segments (i.e., 23,407 out of 45,440 audience segments on the right-hand side of the dashed vertical line in Figure D2 in Online Appendix D) require a minimum increase in performance larger than 700% to be at least as profitable as no-targeting. ...we find that more than half of the audience segments require an increase in CTR0, CR0, and m0 larger than 100% to be at least as profitable as no-targeting.
Approximately half of the audience segments on Spotify require a higher increase in CTR0 for the advertiser, suggesting they might be less profitable than no-targeting.
--
By highlighting the questionable profitability of many audience segments, this paper aims to help advertisers decide whom to target.
We suggest using our model to calculate the break-even performance for many segments and then order these segments by break-even performance from smallest to largest.
... our findings also reveal that untargeted campaigns may yield higher profits.
Our proposed model has limitations, as it relies on inputs that may not be readily available to all advertisers
--- end quote ---
So. Questionable profitability, untargeted yield higher profits unless you ignificantly increase performance of targeted ads, a suggestion of an unproven model relying on data that may not be available to advertisers.
Yes, this truly is a paper that proves the amazing great efficiency of targeted advertisement, especially when offset against lifelong invasive tracking and wholesale trading of user data.
> Data collected has an expiration date. This is also part of GDPR compliance.
1. GDPR isn't available worldwide
2. Ad industry claims "legitimate uses" for a bunch of data and end up with "oh, we'll maintain your precise geolocation for 12 years" https://x.com/dmitriid/status/1817122117093056541
> If your targeting isn't competitive, your inventory will not be bought or at a lower price.
So what?
> This already happens for Safari and Firefox impressions.
Good.
No, they're not tricked. There are obvious cookie banners with the possibility to see the list of vendors and reasons for collecting the data and consent completely, partially or reject.
I'm sorry, if you don't know how advertisement works for news publishers there's not much to talk about.
> Our simulation study reveals that more than 50% of audience segments (i.e., 23,407 out of 45,440 audience segments on the right-hand side of the dashed vertical line in Figure D2 in Online Appendix D) require a minimum increase in performance larger than 700% to be at least as profitable as no-targeting. ...we find that more than half of the audience segments require an increase in CTR0, CR0, and m0 larger than 100% to be at least as profitable as no-targeting.
This might be correct for Spotify, however it isn't for news publishers. Data costs usually represent 10% to 25% of media cost, which means that the uplift of targeting should be at least these values which are nowhere near 100%.
> 1. GDPR isn't available worldwide
Sure, but since a lot of sites have European users they usually stay in line of the strictest guidelines for all users which is generally the GDPR.
> Ad industry claims "legitimate uses" for a bunch of data and end up with "oh, we'll maintain your precise geolocation for 12 years"
Not "ad industry", "one bad adtech actor", but we're already used to incorrect takes.
If the legitimate uses are invalid (which I believe that they probably are) they can and most likely will be fought in court.
> So what?
So journalists don't get paid.