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?
If a service cannot be offered at a certain scale without such practices, it should not be offered at that scale. Before you start talking about how this enabled google's innovations, remember that the path we have taken to our current innovations is not the only path that could have been taken. By correctly squashing out immoral avenues like today's ad tech, we lay the path for the same innovations to happen taking a different, more ethical path. Sure, it could be that that would take more time and certain innovations would be delayed by an entire era[1], but note that we could also be going 5x faster than today w.r.t TPUs or whatever if we enslaved and forced enough people to work for Google's ML infrastructure team and nobody/nothing else. But we don't do that, do we?
[1] on the flip side, certain innovations may also come an era early
That sounds like an opinion and one tha isn't shared by the hundreds of millions of users Google has o it's services.
The worst part is that I completely agree that advertisement and at the very least targeted advertisement, shouldn't exist.
Problem is that users prefer not paying in cash so companies find alternatives.
If advertisement or privacy really mattered for users, we would already have alternative Facebook, YouTube, etc, but it isn't and so we don't.
User ended up preferring the classic version, even when they were informed of its inner workings.
"Ad company does survey confirming that people like their ads and definitely don't want an alternative"
is not the win you think it is. Are you hearing yourself?
You're free to step in at any time with actual viable alternatives, studies, etc.
May I remind you once more that the possibility to create this magical Internet world you guys live in is already there but somehow nobody builds or uses it. Maybe there is a good reason for this?
Ads don't require pervasive and invasive tracking
> but somehow nobody builds or uses it. Maybe there is a good reason for this?
Yes. Because unrestricted unlimited capitalism will always exploit any possible niche and avenue, and people will cheer it on until it's too late.