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crowcroft 6 days ago

When a media buyer puts $1.00 in on one side of the system, on average only $0.60 makes it to the publisher. In some cases less than $0.50 gets to them.

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...

aiauthoritydev 6 days ago | parent | next [-]

As someone who has worked in AdTech I would respectfully disagree. It is indeed complex but it is incredibly efficient. Also it is irrelevant of whether publisher earns 75% or 30% of the total revenue. What matters is how much they are earning compared to the next best alternative.

Some companies like Google are incredible at this. Google is not a "monopoly" in this space. In fact the world has far too many Google equivalents but absolutely no one comes close to Google in generating top dollars for publishers. I am saying this after working for 10+ years competing against Google.

crowcroft 6 days ago | parent | next [-]

In theory, I agree. In practice the whole system is rotten.

* Google unilaterally changing bid mechanics raising costs 15% https://finance.yahoo.com/news/google-changed-ad-auctions-ra...

* Conversion attribution and cookie bombing fraud from both Criteo and Steelhouse https://finance.yahoo.com/news/criteo-versus-steelhouse-clic...

* Phunware click flooding fraud https://www.forbes.com/sites/augustinefou/2021/01/17/ubers-l...

* A nearly unending list of different mobile ad frauds https://www.fraud0.com/resources/ad-fraud-cases-of-the-past-...

* Viewability fraud https://www.cnbc.com/2017/01/31/procter-gamble-chief-markete...

* Session hijacking fraud https://www.buzzfeednews.com/article/craigsilverman/ad-indus...

This doesn't sound like a healthy and efficient industry. Not only do vendors clip the ticket aggressively, they divert dollars that advertisers are intending to go to quality media/real publishers, and siphon it off to fraudulent sites and apps where they generally take a higher margin.

econ 5 days ago | parent | next [-]

I was most impressed by a Google Ad that showed up if you searched for the Dutch tax office. It would only show the name "Tax office" with a free to call phone number under it. Only the hyperlink pointed at a paid number 90 cent per minute.

Depending on how busy it is or how exotic your question one can easily be on hold for an hour or two. Then you get the bill and pay 54 euro per hour.

Google thought this was a great way to make money. The ad ran forever.

Makes you wonder which other phone numbers they highjacked.

Would they provide the same service if I copy some website?

throwaway2037 5 days ago | parent [-]

Jesus. What a story! Is that even legal in Netherlands?

econ 5 days ago | parent | next [-]

They didn't act alone, the paid number had to be approved by someone and the phone provider also had to accept the bill. I don't have numbers but since I know multiple people who got the strange phone bill my guess would be at least hundreds of thousands of succesful click thoughts. Some called the tax office regularly around the busiest time of the year before they got the bill and found out.

There are probably people with large phone bills who didn't notice and ones who thought the tax office was just expensive to call.

luckylion 5 days ago | parent | prev [-]

Google let similar things run in Germany that were impersonating government offices (which is illegal in multiple ways), and they never lifted a finger when the malicious ads were reported, because they still made money in the end.

demadog 6 days ago | parent | prev [-]

[dead]

InsomniacL 6 days ago | parent | prev | next [-]

> Also it is irrelevant of whether publisher earns 75% or 30% of the total revenue. What matters is how much they are earning compared to the next best alternative.

Not if Google illegally monopolizes the market unfairly hindering 'the next best alternative'.

> Google is not a "monopoly" in this space.

You've made that comment on a post where a judge has ruled "Google is illegally monopolizing"...

> In fact the world has far too many Google equivalents but absolutely no one comes close to Google in generating top dollars for publishers.

They have not been able to compete in a fair market.

This comment has some great examples.. https://news.ycombinator.com/item?id=43719246

whiplash451 6 days ago | parent | prev | next [-]

> the world has far too many Google equivalents

No it doesn't. As explained by the parent, Google is in a unique position w.r.t to the publishers, the sellers and the bidders.

There's a ton of very talented adtech companies out there, but they only get to play an unfair game.

zombiwoof 5 days ago | parent [-]

I worked at Google on Adtech. I can tell you everybody knew it was an unfair game and illegal.

Lots of unrecorded meetings and “no notes taken” sessions

PaulHoule 6 days ago | parent | prev | next [-]

It was 10 years ago when I was serious about it but I found every monetization venue other than Google was a joke. If you had the right kind of site you could make money with Adult Friend Finder but everything else paid somewhere between 0-10% what Google did and it wasn’t worth the brand destruction that usually resulted.

CPLX 6 days ago | parent | prev | next [-]

> it is irrelevant of whether publisher earns 75% or 30% of the total revenue

Of course it matters if a middleman is skimming off 70% of the revenue in a given market.

> it is incredibly efficient

On what planet is a loss of 70% of the resources to the matching process between buyers and sellers "incredibly efficient"?

> What matters is how much they are earning compared to the next best alternative.

Right, which is why it is illegal to prevent there from being a next best alternative via anti-competitive practices which is precisely was was proven in this trial after a detailed examination of the evidence.

hamp95 6 days ago | parent | next [-]

> On what planet is a loss of 70% of the resources to the matching process between buyers and sellers "incredibly efficient"?

One where the market maker is taking up the cost of providing a market. E.g. Steam takes a 30% cut for providing the infrastructure required to distribute games. Some people/companies can do it for less but it is the best option for a majority of sellers.

If the market maker did not the seller would get more revenue but would also eat the cost directly instead of paying someone else to do it.

crowcroft 6 days ago | parent | next [-]

Are you saying that serving ads costs more than running a news site?

This also neglects the fact that the programmatic market routes billions of dollars intended to be spent on real media (ad placements on real news websites etc), to fraudulent mobile apps and websites and bot traffic.

bryan_w 4 days ago | parent | next [-]

> Are you saying that serving ads costs more than running a news site?

Static text is much cheaper than dynamic content. News isn't anything that couldn't be served out of a .txt or sqlite CMS.

News providers seem wholly uninterested in providing anything better and actually competing with better content providers

crowcroft 4 days ago | parent [-]

Assuming the content is $0

Jensson 5 days ago | parent | prev [-]

> Are you saying that serving ads costs more than running a news site?

Serving the ads is probably much more expensive than serving the news site, since there is a ton of heavy algorithms to determine what ads to show.

Total costs for each depends on how much it costed to make the news article so is hard to say.

iamacyborg 6 days ago | parent | prev | next [-]

30% is a long way away from 70% and Steam are providing substantially more of a service for that cut.

ClumsyPilot 6 days ago | parent | prev [-]

> One where the market maker is taking up the cost of providing a market

Does a landlord on a literal physical market take 30% of revenue? I find that unlikely.

How did we arrive here, where supposedly ‘efficient’ digital marketplace is a form of rent higher than actually building physical rent, and expenses on wages and materials for a typical business?

porridgeraisin 6 days ago | parent [-]

Unfortunately a lot of economic activity in general today is just money-on-money financialism. It is all just gambling and rent seeking and dishonesty. These practices are whitewashed and given various names. The one for rent-seeking is "market making".

Ad platforms too are fundamentally about letting someone perceive ROI lesser than their real ROI, for your own benefit. For me, it falls under the same category as all of the above - zero productivity endeavours.

Maybe we should go back to the previous millenium and make usury illegal. Should fix all of these problems, albeit in a nuclear fashion.

Nevermark 5 days ago | parent [-]

Competing ad/fill markets fix the problem.

Which is why market makers like Google quietly work very hard to discourage, prevent, interfere or buy their competition.

mathteddybear 6 days ago | parent | prev | next [-]

It is 'incredibly efficient' because it is incredibly good at predicting clicks, conversions, or even conversion values. Which in turn makes it efficient. Sure, there is something called "auction" there, but Sothesby's or Tattersalls generally don't have buyers bidding based on what some machine-learning prediction AI computed in a jiffy (or maybe they do these days, who knows).

adrr 6 days ago | parent | prev [-]

There are three parties. Media Buyers, publishers and users. As a publisher, you can go with “dumb” platforms that don’t deliver quality users to media buyers because of relevancy, you’ll make less money m. Apple ad platform is 40/60 split but for media buyers, it’s not efficient so we spend less money on it. Assume publishers make less money with it as well.

We seen dumb platforms with linear tv. Go watch any TV with an antenna.

ksec 6 days ago | parent | prev | next [-]

Thankfully HN is finally at a stage people can come out and talk about Ad tech without being harassed or attacked.

Could you explain more on this. What do you think makes Google Ad or DoubleClick so special? And

>What matters is how much they are earning compared to the next best alternative.

Correct me if I am wrong, you are suggesting even if publisher only earns 30% of the revenue they still earn more than on other alternative platform?

adrr 6 days ago | parent | next [-]

I am on the purchasing side. Google is very efficient when delivering traffic especially their Max Performance product. Probably the cheapest of all platforms. So they are serving relevant ads to users who engage with the ads. This is win for me and I assume also a win for publishers who get revenue due to higher engagement.

Also users should benefit because they are getting relevant ads. Linear tv is notorious for non relevant ads like all the drug ads for conditions you don’t have. If you’re forced to see ads, wouldn’t you want ads that are relevant?

pclmulqdq 6 days ago | parent | next [-]

No, I personally want to see ads that are as irrelevant as possible. I hate getting a sales pitch forced on me, and would rather see something funny or entertaining showing off an irrelevant product in a clever way than whatever your customers want to shove in front of my eyes.

This is why I block all ads, but still appreciate super bowl commercials.

And I have discovered that this actually works on me. I like the Nike ads, so on the occasions when I buy sportswear, I have positive feelings about Nike stuff. I spend 100-10000x more on stuff that isn't sportswear, but I think Nike gets more value from me watching that ad than anyone who advertises some "relevant" SaaS product or whatnot.

MichaelZuo 6 days ago | parent [-]

This doesn’t make sense.

Why would any advertiser pay the same in such a scenario?

They would obviously value your attention much less on average if that was a hard limit.

pclmulqdq 5 days ago | parent | next [-]

I don't give a shit what advertisers want. I was merely pointing out to someone in the ad business that I don't want to see relevant ads when they made the statement that I do.

This is something that people in advertising say a lot, but it's generally not true. I do not want or benefit from you having "better" ad targeting - I will find your product if I want it without the sales pitch.

MichaelZuo 5 days ago | parent [-]

Why does your individual opinion matter to Google (or advertisers or their markets) then?

It’s probably not even possible for decision makers to discern it from noise.

Dylan16807 5 days ago | parent | next [-]

The advertisers are the ones trying to claim that it's a win-win situation because people like relevant ads.

Pointing out that many people don't like relevant ads is then a significant thing to acknowledge.

You're acting like pclmulqdq brought up the idea out of nowhere, which is very much not the case.

What people think about ads does matter, and does affect the bottom line.

And it's just annoying for you to act like the dislike is just an "individual opinion" but the "people like relevant ads" claim isn't equally anecdotal.

MichaelZuo 4 days ago | parent [-]

I’ll be charitable, what is your actual argument?

In case you didn’t see, the user has already claimed to believe the entire comment chain is irrelevant, so your a bit late.

Dylan16807 4 days ago | parent [-]

They specifically said their original point still stands, and I agree with them.

> what is your actual argument

Was it not clear? Okay I can try again.

When advertisers claim that relevant ads are something people want, that's very far from being universally true. Lots of people don't want that. Don't let them use that unsupported claim to support tracking.

Note that the desires of advertisers are not part of this particular argument. It's a simple claim and counterclaim.

MichaelZuo 3 days ago | parent [-]

How does that follow? And why is your agreement relevant either?

Anyone can have an unlimited number of irrelevant opinions that they believe to possess this or that attribute, they may even genuinely believe so, yet it doesn’t amount to anything.

Even if the claimed argument was flawless… it seems strange to put a non sequitor at the beginning.

pclmulqdq 5 days ago | parent | prev [-]

My individual opinion is (presumably) not unique. They also absolutely can tell who is a decision maker: around 2015, people used to serve facebook ads specifically to VCs to get investment in their startups. I'm sure targeting has only improved.

MichaelZuo 5 days ago | parent [-]

This doesn’t make sense as a reply, it’s not relevant how many others share your opinion, because it’s not aggregations of people replying to each other on HN, but specific users.

Each user’s comment has to stand up under its own weight so to speak

pclmulqdq 5 days ago | parent [-]

Cool, yours is as irrelevant as mine. The original point stands, though: not everyone benefits from better ad targeting.

MichaelZuo 5 days ago | parent [-]

> Cool, yours is as irrelevant as mine.

So then why did you reply if you already knew your comment and the rest of the comment chain was irrelevant?

maujun 5 days ago | parent | prev [-]

It doesn't make sense financially. But money is not the only thing that matters.

My emotions matter. If I see a scary person who is not my friend, I yell "put him down" in my head, and take actions.

If that scary person knows more about me than I know about myself. I bark like a small dog. Arf! Arf! Arf! In English, that roughly translates to "Get out of my sight! Get out of my head! Then I'll feel fine again."

If this doesn't make sense to you, then you are suggesting a world where money/truth matter more than emotions. But then why do people make money, if not just to survive? Arf! Arf! Arf! (This originally translated to: "Don't engage with me unless you value low-status people")

MichaelZuo 5 days ago | parent [-]

This still doesn’t make sense.

Since everyone values emotions differently... there would still need to be some intermediary, like money, for emotions to have any agreed upon value at all beyond narrow circles.

Otherwise what’s stopping, e.g. nihlists, from valuing your emotions at zero or a negative value?

maujun 5 days ago | parent | next [-]

I like the idea.

With money, we can value emotions. Since everybody has some money, everybody's emotions (outside of children) will have positive value.

Relating to my original example:

I, as a provider of PII, feel scared about my information being sold. If Google has a $100/year option to stop my PII from being spread, I would consider buying it.

However, I predict now some people feel angry. They feel Google should not be allowed to do this. They won't pay Google to stop, they will go to the govt.

Considering this problem, I wonder what is the next step we would need to do to ensure a world of positive emotions and money.

> Otherwise what’s stopping, e.g. nihlists, from valuing your emotions at zero or a negative value?

Well, I think a lot of people value my emotions negatively, especially angry people and corporations. In particular, corporations like to take money and make it time consuming for me to get a refund.

As for people, I am at peace because I cannot change my skin color, face, or personality, but I can adjust my goals to be smaller/non-overlapping.

ambicapter 5 days ago | parent | prev [-]

"The only way to understand emotions correctly is through money" What a take.

pyrale 5 days ago | parent [-]

We need a market for emotions. Want a good laugh with your friends? That'll be $10. A moment of peace with your so? That'll be $100.

Rewards of up to $.50 for people willing to be scared to death (or, you know, moderate social media content).

5 days ago | parent [-]
[deleted]
greenchair 6 days ago | parent | prev | next [-]

I don't think relevant ads are healthy for the many people who do not have enough self-control to resist temptation. Ads are essentially playing mindgames triggering fear/jealousy on these people to steal their money. For the people who do have self-control, they don't need other people trying to tell them what to buy.

dgoldstein0 6 days ago | parent | next [-]

That's a good argument against bad and exploitative ads.

Not all ads are necessarily bad. Eg have you ever seen an ad for an event in your town? Maybe a play or a concert you'd want to see. Those to me feel more like "public notice: thing is happening" and every once in a while I'll actually go buy tickets. But technically, those are ads, just not the kind of exploitative ad you are talking about.

A good ad informs, while leaving the decision up to you. A bad ad distracts you with garbage and/or tries to get you to indulge in your worse impulses

viraptor 5 days ago | parent [-]

> have you ever seen an ad for an event in your town?

I get those on the local town board, online in the town group I explicitly joined, and from people around. I do not want those on a random page when I'm trying to do something else.

johannes1234321 5 days ago | parent [-]

Especially as the random page will be organized in a way to steer me towards the ad rather than the thing I want to do.

astrange 5 days ago | parent | prev [-]

Every ad on Reddit is currently from "hims" and has the message that your hair will fall out and your dick will stop working if you don't take their pills.

mehlmao 5 days ago | parent | prev | next [-]

How about you and the people who want "relevant ads" opt in, and everyone else gets a sane default of not beong tracked and having dossiers compiled about them. You could even implement it with an HTTP header, maybe "Allow-Track"?

thfuran 5 days ago | parent | prev | next [-]

I choose option three in the false dichotomy: Render it illegal to attempt to force me to see ads.

adrr 5 days ago | parent [-]

You can always pay for service. Kagi, YouTube Premium, Reddit Premium, Spotify Premium, ProtonMail etc. Platforms needs money to run.

udev4096 5 days ago | parent | next [-]

Ads are not only annoying but play an extremely crucial part on tracking you across the web. People defending google cannot seem to wrap their mind around the fact that it's one of the most lucrative way to carry out mass surveillance at scale. Paying for the service only partly avoids the service to stop giving you ads. What about the insane amount of telemetry they collect? It's a lost cause

ksec 5 days ago | parent | prev | next [-]

Thank You for saying this out now. Again we are finally back to may be Pre 2014 HN where we can talk a little about business and money.

thfuran 5 days ago | parent | prev [-]

Yes, platforms need money. So why should a platform not charging its users be permitted? It's dumping. It's anti-competitive behavior unfairly disadvantaging any other business that wants to enter the market the ad platform is pretending to be in. It also creates a ton of perverse incentives.

xnx a day ago | parent | prev | next [-]

This. $1 spent on ads at Google gets a better return for advertisers than that same $1 spent almost anywhere else. For publishers, no one generates more revenue per ad space than Google (without reputation destroying ads).

9dev 6 days ago | parent | prev | next [-]

You phrase it like it would be a good thing to manipulate people into buying stuff they don’t need, to generate an artificial demand by exploiting others.

worik 5 days ago | parent | prev | next [-]

> If you’re forced to see ads, wouldn’t you want ads that are relevant

Thank Dog that is a false dichotomy. I am not forced to see ads, my ad blockers are effective. Back in the day I moved mountains to get MythTV working so I could dodge the ads on linear TV

I do not want those creepy greedy monkeys anywhere near my data

No. A thousand times no!

econ 5 days ago | parent | prev [-]

To me that reads like endless drug ads for the disease your loved one died from 10 years ago.

milesrout 6 days ago | parent | prev [-]

>Thankfully HN is finally at a stage people can come out and talk about Ad tech without being harassed or attacked.

Is this comment some sort of performance art? When was the last time any post about ads wasn't filled with people posting about how advertising is evil, all advertising should be banned, ads on the internet are "stealing personal information" and other things like that?

There may have been a point where the way ads are delivered on the internet was positively received on HN but it has not been for at least a decade.

alabastervlog 5 days ago | parent | next [-]

They weren't positively received in any computer nerd spaces, at any time that I can ever recall—with the sole exception of the "non-evil", well-marked, text-only Google ads that they used to run. There was a lot of "everything except these is bad".

Now google's as bad as any of the old pop-up flash advertisers, plus they intentionally trick people into confusing ads with search results, and they're more effective at tracking people than any of those ad networks were. So there's nothing left to say anything positive about. The single arguably-good version of this entire field of Web ads is long gone.

ksec 5 days ago | parent | prev [-]

It is not about ads being positive, but as a necessary evil. And we could at least discuss about the tech behind it, the performance of it without being shut down and downvoted so the whole thing disappeared.

>but it has not been for at least a decade.

Actually yes since around 2013 - 2014. HN has plenty of decent Ad discussions on both buy and sell side pre 2013 / 2014.

nitwit005 6 days ago | parent | prev | next [-]

You're absolutely right, publishers are picking Google with cause, but if Google prevented competition, that's not a real choice is it?

There has to be some sort of competition for markets to be efficient, and you're essentially suggesting there hasn't been a viable alternative in a decade.

xmprt 6 days ago | parent | prev | next [-]

Perhaps Google does well for their publishers but do they do well for advertisers? Inherently it seems like it's impossible to do both because what's good for one group is bad for another. Fortunately with healthy competition we solve this problem since alternatives could be used.

But since Google is playing both sides and has so much sway over the market, they're able to manipulate things. Even if they're not manipulating things to their benefit, it's still not great to have a single party have so much control.

toast0 6 days ago | parent | next [-]

> Perhaps Google does well for their publishers but do they do well for advertisers? Inherently it seems like it's impossible to do both because what's good for one group is bad for another.

There's certainly some tension between advertisers and publishers, in that advertiser would like to pay less and publishers would like to be paid more; but there's a lot of things an ad exchange can do that are good for both. Selecting ads to display that result in meaningful downstream conversion is good for both advertisers and publishers, because they'll both get paid and maybe something about the user getting something they want too.

Showing inappropriate and ineffective ads isn't great for the advertiser, and it might make the publisher money in the near term, but it can drive users away and tends not to be sustainable --- advertisers stop advertising in venues where they don't get results.

The value of a good ad exchange for the publisher and the advertiser is when it provides reasonable matching at a lower cost than the parties arranging advertising directly. Possibly some amount of assurances for both sides too --- the exchange should ensure the advertising code and destinations aren't going to compromise the publisher or their user and should ensure that the ads paid for are actually seen (to the degree possible). There's room for the exchange to profit from scale while still being lower cost than self-managed advertising.

PaulHoule 6 days ago | parent | prev | next [-]

It’s a two-sided market and it doesn’t have to be either/or. Google has a wide range of advertisers so it can find one that converts on your site and it has a wide range of sites so it can find ones that work for a given advertisers. Also Google has a large database and user inventory for personalization so it can find ads that convert on your site even if your site wouldn’t attract ads otherwise. the personalization economy has all sorts of ads and might be brand destroying in the case of retargeting but you see that crap everywhere whereas many Google alternatives run brand-destroying ads and pay you $0.00 after rounding.

mattmcknight 6 days ago | parent | prev [-]

> Inherently it seems like it's impossible to do both

but that is the value of a marketplace, aligning buyers and sellers via the price mechanism

oblio 6 days ago | parent [-]

Isn't this decision about Google abusing their marketplace (as all marketplace owners will inevitably do), by pushing their own stuff?

Every setup where someone makes the platform and sells stuff built on top of it is inherently abusive. You just don't know when the abuse will come and against whom.

udev4096 5 days ago | parent | prev | next [-]

Your opinion is biased from the fact that you worked on "adtech". How can you justify it? You are the reason the web is bloated and lost the true idea of it a long time ago. Luckily, there are people who run pi-hole and adguard who have my utmost respect along with countless people who maintain an upto-date ad-block list

prepend 6 days ago | parent | prev | next [-]

It matters when monopoly forces increase the cost to publishers and thus harms them.

It can be great compared to next best and they are still harmed by illegal practices that make it worse off.

Nemo_bis 5 days ago | parent | prev [-]

"Efficient" in the pursuit of what purpose?

TZubiri 5 days ago | parent | prev | next [-]

The argument here being that the fee is too high? I don't think prices being too high is a strong argument of the existence of a monopoly, but it might be of the exploitation of one.

crowcroft 4 days ago | parent [-]

There's been a few instances where internal communications have leaked showing Google intentionally rigging auction mechanics to inflate CPCs. It's not just the fees being high.

https://upriseup.co.uk/blog/something-doesnt-ad-up-google-ad...

shortrounddev2 6 days ago | parent | prev | next [-]

The (Open)RTB system makes things more competitive and reduces costs for advertisers by making unsold inventory available to an automated marketplace while also increasing revenue for smaller publishers who otherwise wouldn't have been able to create first party relationships with advertisers. The middlemen are various identity providers and other tracking/data enrichment services, as well as third party exchanges, DSPs and SSPs. Believe it or not this system makes it a lot cheaper than just having someone buy ad space directly on a website

> 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.

crowcroft 6 days ago | parent | next [-]

> each middleman (usually) adds some kind of value

This is the argument that gets made, but very rarely is it true.

From Neumann et al in 2019 [1]

"When investigating gender (being male) and age (three different tiers: 18-24, 25-34 and 35-44 years) individually, we find that digital audiences for gender are on average less often correct than random guessing (accuracy of 42.3%)."

If the accuracy of targeting is worse than random guessing on average then it's value is less $0.00. Advertisers would reach more of their target audience by simply buying more media instead of spending money on 'targeting' even after you discount wastage to $0.00 in 'value'.

I agree with everything you're saying about programmatic *in theory*, but I would argue that in practice the whole system is just broken.

[1] https://papers.ssrn.com/sol3/papers.cfm?abstract_id=3203131

PaulHoule 6 days ago | parent [-]

I have tried to sell ads and never been able to fill all my inventory and often the rates are poor and the ads brand destroying. If you are The New York Times it is different but a site that makes $1000 /mo in ads can’t afford an ads salesperson and in the big scheme of things that is royalty.

shortrounddev2 6 days ago | parent [-]

Have you tried prebid? It lets you send your bid requests to as many exchanges as you want so you can advertise your inventory to as many DSPs as possible

PaulHoule 6 days ago | parent [-]

When I talk about "sell" I mean sell directly with a human touch. Like the way a newspaper or a network of radio stations has actual salespeople that sell ads.

Nemo_bis 5 days ago | parent [-]

It sounds like a service some company should step up to provide! Make the job of those salespeople easier.

Instead of selling "clicks" and "impressions", just sell the damn banner ad. The advertiser sets their budget and target audience, a few suggestions of websites where to run a banner for (x) days show up, the advertiser picks some of them. On the other side same story and the website picks which ads they want to run.

Many other models are possible.

I wonder why we don't have such competitors. Ah right, because Google abused its monopoly position. :-)

Nemo_bis 5 days ago | parent | prev | next [-]

> 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

How do you know that the waste is higher with the banner ad?

xnx a day ago | parent [-]

Because the banner ad generates less revenue than $5,000 worth of advertising spent on something else.

Nemo_bis a day ago | parent [-]

And you know this how, if you're not running banner ads to test? How do you attribute the revenue?

tmtvl 6 days ago | parent | prev [-]

> * 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

That's horrible! In a better world such practices would be made illegal and those involved would be hung, drawn, and quartered.

tlb 6 days ago | parent | next [-]

Geotargeting of ads is essential for local businesses. Banning it would make advertising only practical for national brands. It would be bad for the world if only national brands could advertise.

prepend 6 days ago | parent [-]

I live in a unique town name in the US, pretend it’s “Foo.”

I tried to buy ads for “Foo photography” as people in my town literally type that in. And my budget wasn’t enough to buy all instances of that search.

I didn’t need geotargeting for my local business.

Comically google kept trying to geotarget. Every time it did this I would get people all over the place who searched “photography” and a large percentage was burned. I kept trying to turn off geotargeting.

cornel_io 6 days ago | parent | prev [-]

None of that seems at all user-hostile to me, it's literally all aimed at making sure what the user is shown is more likely to actually be useful to them.

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...

porridgeraisin 6 days ago | parent | next [-]

I'm on the other side of the divide from you.

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.

LunaSea 6 days ago | parent [-]

> That is why we aggressively use ad blockers and go to great lengths to avoid the status quo.

And so you're paying for the content you're reading as well?

troupo 5 days ago | parent | next [-]

Ad-supported does not mean "tacking your every movement and collecting all your private data across the entirety of the internet throughout your entire adult life, and selling that data to the highest bidder"

LunaSea 5 days ago | parent [-]

Usual the news publishers don't sell user data because they have so little of it.

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.

troupo 5 days ago | parent [-]

1. Those extraordinary claims need some extraordinary evidence

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.

LunaSea 5 days ago | parent [-]

> In a comment elsewhere in the discussion: accuracy of targeting is worse than random sampling https://news.ycombinator.com/item?id=43719816

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.

troupo 5 days ago | parent [-]

> I could provide a long answer but the gist of it is that the study is flawed.

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)

LunaSea 5 days ago | parent [-]

> 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.

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?

porridgeraisin 5 days ago | parent | next [-]

> 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

LunaSea 5 days ago | parent | next [-]

> If a service cannot be offered at a certain scale without such practices, it should not be offered at that scale.

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.

porridgeraisin 5 days ago | parent [-]

Well, I don't think most people really understand the way ad-tech supports these services. I wager if you asked a few lay men they wouldn't even know google is an ad company(apart from YouTube ads)

LunaSea 4 days ago | parent [-]

A few years ago, a large publisher (Persgroep) in the Netherlands made a study comparing user preferences between two advertisement solutions, one would be a traditional personal data-based targeting solution and one privacy preserving solution (SOLID).

User ended up preferring the classic version, even when they were informed of its inner workings.

porridgeraisin 3 days ago | parent [-]

"publishing" They are an ad company.

"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?

LunaSea 3 days ago | parent [-]

Well I seem to be the only bringing proof and understanding into this debate.

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?

porridgeraisin 3 days ago | parent | next [-]

> Maybe there is a good reason for this?

Yes, the unethical path is easier and more importantly, faster to take. If it is not explicitly disallowed in the system, it will be taken.

LunaSea 3 days ago | parent [-]

I would say that it is the most popular path among readers that is the winning one in the end.

porridgeraisin 3 days ago | parent [-]

Again, if you let the unethical ones exist, they will win.

> Popular among users

Google is popular due to their superior search capability/really good workspace product and of course youtube is brilliant. The whole point is to try and achieve these same things while also maintaining ethics, even if it takes a century longer. Like I said in a previous thread, you wouldn't enslave people to work on Google's TPUs, would you? Even if it would help us achieve AGI in one week.

You can't say, let the users decide, when there is information asymmetry. No one using a phone today is aware of the slavery in the rare metal industry in Congo etc, as much as they are aware of the number of megapixels in their camera.

If you are really in the "let the users decide" camp, then there must be 100% information symmetry. Add to the iPhone box a detailed report of every single part of the supply chain. Add a video of the slave in the mines, not just the PPE suit in the high-tech-looking lab.

Google search should market themselves as selling your ad information to various businesses.

You can't let businesses push the positive side of their business more than the negative side, cause an information asymmetry, and then say that users should be allowed to decide.

If the negative side of the business is hidden in a T&C document, then the positive side should also be forced to be in a T&C. They should be on equal footing. This would mean effectively banning marketing. Which of the alternatives do you prefer?

Back to the point, If you disallowed intrusive/targeted ads, then purely ad supported journalism would be unsustainable, thereby forcing businesses to charge for most of their news. Copy this ditto for other industries.

Doing good things like this could also naturally facilitate other desirable things such as a simple payment system for internet services and remove other blockers needed for the system to work, which we don't have today despite all the trillion dollar tech companies. Why? They have the brightest minds, but the economic incentives need to be set exactly right. Today, those bright minds are being used to add dark patterns to user interfaces, deceive or even outright lie to users, and doing cunning things like tracking my location using their Wi-fi SSID even when I explicitly turned off location. These tracking systems didn't come out of nowhere, nor are they easy to build. They exist because the incentives let them, caused them to exist. If the incentives instead caused more ethical businesses to exist, the same human/otherwise capital would be converted to more ethical systems.

troupo 3 days ago | parent | prev [-]

> May I remind you once more that the possibility to create this magical Internet world you guys live in

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.

LunaSea 3 days ago | parent [-]

Oh, it is unlimited capitalism that prevents people from paying for their online newspaper subscriptions?

troupo 5 days ago | parent | prev [-]

> Before you start talking about how this enabled google's innovations

To whit:

Most the big projects Google started or acquired, and that are still available today, Google started or acquired before targeted advertising. Google itself, Docs, Youtube, Cloud, Android...

Targeted advertising is not a requirement for innovation

troupo 5 days ago | parent | prev [-]

> The users do give consent and this is handled by Consent Management Platforms

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

LunaSea 5 days ago | parent [-]

> No. The users are tricked into giving "consent" through a plethora of dark patterns.

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.

troupo 3 days ago | parent [-]

> 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.

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.

LunaSea 3 days ago | parent [-]

> They are tricked into giving this consent because that's the only way ad industry can obtain consent to livelong invasive tracking.

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.

porridgeraisin 5 days ago | parent | prev [-]

Nope, if they are so unscrupulously willing to employ dark patterns, I can get pretty competitive :-)

LunaSea 5 days ago | parent [-]

Ah, so a hypocrite I see.

porridgeraisin 5 days ago | parent [-]

???

im not talking about piracy here - I pay for multiple streaming services and yt music provided the resulting experience is ad free.

But ads on your news/shopping website? Regardless of if I pay or not I'm gonna get upsells and ads. That simply does not fly. In any case, intrusive ads are a no-no. If your platform utilizes intrusive ads, I have no remorse for any loss incurred on your part.

LunaSea 3 days ago | parent [-]

> But ads on your news/shopping website?

"What, paying for MY news? How dare they"

porridgeraisin 3 days ago | parent [-]

Stop being insanely obtuse. I stated clearly:

>> Regardless of if I pay or not I'm gonna get upsells and ads.

I'll say it again for your ad-tech addled brain only rivalling vomit-inducing people like prabhakar raghavan:

If there was an option to have zero, zero, even minutely intrusive ads/tracking, then I will be willing to pay a price for it. If this is not an option, then I have zero remorse for your wasted efforts/loss of revenue.

Tell me _one_ news website today offering this feature? I will pay for it.

https://help.nytimes.com/hc/en-us/articles/360001712553-Ads-...

> Advertising remains a critical part of our business model of supporting independent journalism, as such, we do not offer ad-free subscriptions.

Even the ones that _do_ have a half-decent, "ad-free", paid option, if you actually pay and visit their website, you will be sure to see ads related events in the network tab. Disqualified.

For the case of tracking, like I (again) stated above: if my library goes over to my travel agency telling them what travel guides I have been looking at, I have zero remorse for the library's revenue stream, even if they satisfy all of the requirements above (such as offering a completely intrusive-ad-free paid subscription).

If there are alternatives that don't indulge in these completely unethical practices, I would love to, and I do, use them. However, there are exactly zero news websites like that, so it leaves me with no choice but to "steal" whenever I read an article.

Off-topic, but I can't help snort at:

> independent journalism

Finally, if your company ever does something like using Wi-fi SSIDs as an alternative when I intentionally disable location services in my phone, then it goes in the bin. No recourse, sorry.

LunaSea 3 days ago | parent [-]

> If there was an option to have zero, zero, even minutely intrusive ads/tracking, then I will be willing to pay a price for it. If this is not an option, then I have zero remorse for your wasted efforts/loss of revenue.

This is already the case for most newspapers. Helas, most users prefer the free but ad-ridled version.

> Even the ones that _do_ have a half-decent, "ad-free", paid option, if you actually pay and visit their website, you will be sure to see ads related events in the network tab. Disqualified.

You should report this to the publishers. This is usually and genuinely not what they would like to happen if they provide a paid version.

> For the case of tracking, like I (again) stated above: if my library goes over to my travel agency telling them what travel guides I have been looking at, I have zero remorse for the library's revenue stream, even if they satisfy all of the requirements above (such as offering a completely intrusive-ad-free paid subscription).

Most of the time the data itself will never be sold. What happens is that a brand or ad agency will buy pre-filtered traffic or ask the publisher to operate a campaign on specific user segments. This means that the data never leaves the site that collected it.

There are of course external companies that become third-party data providers as a business model like credit card companies or telecoms. But even then, data providers try to protect their own data by operating campaigns themselves rather than selling the data.

> If there are alternatives that don't indulge in these completely unethical practices, I would love to, and I do, use them. However, there are exactly zero news websites like that, so it leaves me with no choice but to "steal" whenever I read an article.

Just as an added piece of context, due to publishers surviving (and I really mean it) thanks to advertisement income, they also have little in-house tech talent that can actually make sur that things like "absolutely 0-tracking if it's a paying user" is correctly implemented.

Do what you will with this information.

> Finally, if your company ever does something like using Wi-fi SSIDs as an alternative.

Only mobile apps might have the SSID (and only with granular user consent on app install). Websites do not have access to this information.

porridgeraisin 3 days ago | parent [-]

> This is already the case for most newspapers.

I just gave an example of the NYTs stance on the position. Can you find me a newspaper that doesn't say that?

> Pre-filtered segments

Which party has the information is not of relevance. That any one has it at all is already a problem. I don't care if it's advertiser sending the newspaper ["football shoes"] and the newspaper matching it with the fact that I'm interested in ["football"]. If I pay, I want none of that at all. Not even one side of the process should take place.

> Only mobile apps

Yes yes.. it was an example. Again, stop being obtuse and missing the point. You and I both know the extent to which browser fingerprinting and other techniques are used. Not to mention the larger along the news websites also have mobile apps where they employ similar techniques.

throw-qqqqq 5 days ago | parent | prev | next [-]

I think that is a false dichotomy. Targeting does not necessarily lead to fewer ads.

I am old enough to remember the world before targeted ads (and internet), and back then I did not see more ads than today - on the contrary!

sidewndr46 6 days ago | parent | prev [-]

"useful to them" - do I really need to know how much one day dental implants cost in 2025?

dboreham 6 days ago | parent [-]

They do them in one day now?

sidewndr46 6 days ago | parent [-]

According to all these ads I keep seeing, yes.

secondcoming 6 days ago | parent | prev [-]

Running a DSP is quite expensive if you have all the features advertisers want.

dboreham 6 days ago | parent [-]

Digital Signal Processor?

tomwojcik 6 days ago | parent [-]

demand-side platform, i assume