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aiauthoritydev 6 days ago

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.

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?

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 5 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 5 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?