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How does this work (economically)? Based on this subthread: https://news.ycombinator.com/item?id=11804689 https://news.ycombinator.com/item?id=11804689 it seems

How does this work (economically)? Based on this subthread: https://news.ycombinator.com/item?id=11804689 https://news.ycombinator.com/item?id=11804689 it seems that the mechanism is: HTTPS site can't load resources over HTTP (due to security) -> only those advertisers who support HTTPS can place bids for HTTPS-only sites (and not all do) -> the smaller number of bids results in lower ad revenue However, as also noted there, the advertisers who do support HTTPS should preferentially bid for impressions on HTTPS-only sites, since the price per view (or per click etc), is lower. Importantly, they should continue doing this (raising the price of adverts on HTTPS-only pages, due to the increased demand), until the price per click etc. is the same for HTTPS-only and "normal" sites. Why does this not happen? i) The simple model above is overly simplistic, and I don't actually understand the situation, ii) The marginal costs of serving HTTPS ads and HTTP ads are not the same (though why would that be — the server overhead for HTTPS is marginal) or the the revenue from HTTPS vs. HTTP ads is lower (but again, why?), iii) The time-frame is too short(?), iv) Advertisers are turning down free money (highly unlikely).

brandmeyer 10y ago
> Importantly, they should continue doing this (raising the price of adverts on HTTPS-only pages, due to the increased demand), until the price per click etc. is the same for HTTPS-only and "normal" sites. Why does this not happen? > iv) Advertisers are turning down free money (highly unlikely). One explanation: You are modeling advertisers' behavior similar to a control system having integral gain and/or bandwidth higher than the timeframe of the disturbance (HTTPS adoption rate). In practice, it may be that the market's optimization is using only proportional gain and/or lower bandwidth. Such a system merely reduces the impact of differing market sizes for HTTPS support, without eliminating it, or perhaps takes more time to eliminate it.
nitwit005 10y ago
Isn't it simply a question of competition? If some advertisers can't support HTTPS, that means there are fewer bidders for HTTPS content. That should result in a lower price. They are also bidding on what's presumably a shrinking pie of HTTP ad space. If the volume available to buy has dropped considerably, that may also be driving up the price of HTTP ad views.
- eru 10y ago
  Yes. But this very effect should drive https adoption for the advertisers. The grandparent comment was exactly wondering why this doesn't seem to be happening (enough).

brandmeyer 10y ago

> Importantly, they should continue doing this (raising the price of adverts on HTTPS-only pages, due to the increased demand), until the price per click etc. is the same for HTTPS-only and "normal" sites. Why does this not happen? > iv) Advertisers are turning down free money (highly unlikely). One explanation: You are modeling advertisers' behavior similar to a control system having integral gain and/or bandwidth higher than the timeframe of the disturbance (HTTPS adoption rate). In practice, it may be that the market's optimization is using only proportional gain and/or lower bandwidth. Such a system merely reduces the impact of differing market sizes for HTTPS support, without eliminating it, or perhaps takes more time to eliminate it.

nitwit005 10y ago

Isn't it simply a question of competition? If some advertisers can't support HTTPS, that means there are fewer bidders for HTTPS content. That should result in a lower price. They are also bidding on what's presumably a shrinking pie of HTTP ad space. If the volume available to buy has dropped considerably, that may also be driving up the price of HTTP ad views.

eru 10y ago
Yes. But this very effect should drive https adoption for the advertisers. The grandparent comment was exactly wondering why this doesn't seem to be happening (enough).