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The HN community has an outspoken minority that believes: a) ads do not make money, b) ads do not work, and c) ads (targeting) are morally wrong. My sense is t

The HN community has an outspoken minority that believes: a) ads do not make money, b) ads do not work, and c) ads (targeting) are morally wrong. My sense is that the silent majority recognizes just how massive the advertising business is (its demand generation, nothing more complicated) and how important it can be to all types of businesses across every sector of the economy. Global advertising spend (est. 2015): $592B Global digital ad spend (est. 2015): $170B Global VC investment (est. 2014): >$48B [1] http://www.emarketer.com/Article/Advertisers-Will-Spend-Nearly-600-Billion-Worldwide-2015/1011691 http://www.emarketer.com/Article/Advertisers-Will-Spend-Near... [2] http://www.pwc.com/us/en/press-releases/2015/annual-venture-capital-investment-tops-48-billion.html http://www.pwc.com/us/en/press-releases/2015/annual-venture-...

TheLogothete 11y ago
Ads will die soon. Any day now. Doomed business model.
jacquesm 11y ago
Ads make an enormous amount of money, but ads are also (at least the online ones) undergoing a trend where the same amount of effort by advertiser, creatives and agencies leads to less and less user engagement and $ spent on product over time. More and more people are experiencing a disconnect with advertising and the advertising industry, rather than doing some introspection sees this is a technological thing that needs 'fixing' rather than as a basic problem with their approach. It will be interesting to see how they plan to fix this long term, for now it does not look - to me - as if they are on the right path, another focus group or user panel is not going to magically solve this. Until then the money is good.
- fraserharris 11y ago
  Part of the explosion in ad-tech companies are alternative ad-formats and methods. The future lies in native ads - TripleLift (among others) is doing interesting things. You'll see more and more "sponsored stories". With Taboola/Outbrain, brands can create their own content (giving new life to agencies). We've experimented with embedding sponsored stories into digital properties (ex: a shoppable gift guide within a digital magazine's website).
  - jacquesm 11y ago
    > You'll see more and more "sponsored stories". Great. /s
    - sangnoir 11y ago
      This is the industry reaction I expect from wide-spread ad-blocker usage. There's a certain future-blindness that afflict us techies: in our fervent zeal, we think that the things we don't like (flash, ads, and flash ads) will be "killed soon": instead, they evolve into hardier, more insidious strains (HTML5/canvas ads, native ads).
      - jacquesm 11y ago
        Because advertisers have a god-given right to our attention. I got that long ago. Which is one of the reasons I worked hard to get them out of my life as much as possible. Those ads may not be 'killed soon' but they're 'killed for me' today and if it gets to the point where let's say even HN would be infested with advertising then I would simply move offline and read books again or something like that. My eyeballs are mine, and so is my brain.
      - bittercynic 11y ago
        Though they may not be "killed soon" it still seems worthwhile to take up the fight to help people protect their bandwidth, screen real estate, and mind. Just because it will be an ongoing fight doesn't mean you should just give up.
tremon 11y ago
But isn't artifical demand generation exactly the problem? We already have growing problems with overconsumption, yet we're still told to keep buying more? The only thing your numbers show is that marketing is great at selling its own services, which should not be surprising. Then (for me at least) there's the problem that almost all TV advertising is targeted at the more vulnerable groups in society: they invariably equate spending with a superficial emotional quality. I can't even remember the last time I've seen an ad that contained factual information. And since consumer money can only be spent once, it's a zero sum game to me. I'd rather have people spending money on things they really need, instead of trying to fill an emotional hole created by advertising.
- fraserharris 11y ago
  You are conflating the role of advertising in general vs specific kinds of advertising and consumption that you view as a waste. Our entire industry (tech) relies on advertising to boost awareness of our products. Is it overconsumption that I saw an ad yesterday for Load Impact & subsequently tested & paid for their (very cool!) service? Overconsumption can be true on an individual level (person X did not need to buy Y). On an aggregate, consumption is "the economy" and advertising is the primary way of informing potential buyers about an offering.
  - shoo 11y ago
    i'll go out on a limb and suggest that most things that consumers buy are things that they don't need to buy -- at least in my part of town. i wonder how much of the world's economy is geared to providing consumers with things that they don't need? (this easily covers fashion + cars + travel + the latest gadgets + a lot of food) i wonder how much of the world's economy is B2B style businesses geared towards assisting companies provide consumers with things they don't need? perhaps a fair bit? i think one can argue that advertising makes "the economy" more efficient, perhaps. one still has to answer the question of "is the economy a good thing?" -- i.e. efficiency in itself is not obviously a positive attribute - it isn't good to find increasingly efficient ways to carry out something that is a terrible idea. it isn't obvious to me that the economy we find ourselves stuck inside is a particularly good thing (it doesn't seem particularly good at dealing with the problems that it causes).

TheLogothete 11y ago

Ads will die soon. Any day now. Doomed business model.

jacquesm 11y ago

Ads make an enormous amount of money, but ads are also (at least the online ones) undergoing a trend where the same amount of effort by advertiser, creatives and agencies leads to less and less user engagement and $ spent on product over time. More and more people are experiencing a disconnect with advertising and the advertising industry, rather than doing some introspection sees this is a technological thing that needs 'fixing' rather than as a basic problem with their approach. It will be interesting to see how they plan to fix this long term, for now it does not look - to me - as if they are on the right path, another focus group or user panel is not going to magically solve this. Until then the money is good.

fraserharris 11y ago
Part of the explosion in ad-tech companies are alternative ad-formats and methods. The future lies in native ads - TripleLift (among others) is doing interesting things. You'll see more and more "sponsored stories". With Taboola/Outbrain, brands can create their own content (giving new life to agencies). We've experimented with embedding sponsored stories into digital properties (ex: a shoppable gift guide within a digital magazine's website).
- jacquesm 11y ago
  > You'll see more and more "sponsored stories". Great. /s
  - sangnoir 11y ago
    This is the industry reaction I expect from wide-spread ad-blocker usage. There's a certain future-blindness that afflict us techies: in our fervent zeal, we think that the things we don't like (flash, ads, and flash ads) will be "killed soon": instead, they evolve into hardier, more insidious strains (HTML5/canvas ads, native ads).
    - jacquesm 11y ago
      Because advertisers have a god-given right to our attention. I got that long ago. Which is one of the reasons I worked hard to get them out of my life as much as possible. Those ads may not be 'killed soon' but they're 'killed for me' today and if it gets to the point where let's say even HN would be infested with advertising then I would simply move offline and read books again or something like that. My eyeballs are mine, and so is my brain.
    - bittercynic 11y ago
      Though they may not be "killed soon" it still seems worthwhile to take up the fight to help people protect their bandwidth, screen real estate, and mind. Just because it will be an ongoing fight doesn't mean you should just give up.

tremon 11y ago

But isn't artifical demand generation exactly the problem? We already have growing problems with overconsumption, yet we're still told to keep buying more? The only thing your numbers show is that marketing is great at selling its own services, which should not be surprising. Then (for me at least) there's the problem that almost all TV advertising is targeted at the more vulnerable groups in society: they invariably equate spending with a superficial emotional quality. I can't even remember the last time I've seen an ad that contained factual information. And since consumer money can only be spent once, it's a zero sum game to me. I'd rather have people spending money on things they really need, instead of trying to fill an emotional hole created by advertising.

fraserharris 11y ago
You are conflating the role of advertising in general vs specific kinds of advertising and consumption that you view as a waste. Our entire industry (tech) relies on advertising to boost awareness of our products. Is it overconsumption that I saw an ad yesterday for Load Impact & subsequently tested & paid for their (very cool!) service? Overconsumption can be true on an individual level (person X did not need to buy Y). On an aggregate, consumption is "the economy" and advertising is the primary way of informing potential buyers about an offering.
- shoo 11y ago
  i'll go out on a limb and suggest that most things that consumers buy are things that they don't need to buy -- at least in my part of town. i wonder how much of the world's economy is geared to providing consumers with things that they don't need? (this easily covers fashion + cars + travel + the latest gadgets + a lot of food) i wonder how much of the world's economy is B2B style businesses geared towards assisting companies provide consumers with things they don't need? perhaps a fair bit? i think one can argue that advertising makes "the economy" more efficient, perhaps. one still has to answer the question of "is the economy a good thing?" -- i.e. efficiency in itself is not obviously a positive attribute - it isn't good to find increasingly efficient ways to carry out something that is a terrible idea. it isn't obvious to me that the economy we find ourselves stuck inside is a particularly good thing (it doesn't seem particularly good at dealing with the problems that it causes).