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> Facebook’s formidable ad business, along with Alphabet Inc.’s Google, soaked up 99% of the online ad industry’s growth last year, according to Pivotal Researc

> Facebook’s formidable ad business, along with Alphabet Inc.’s Google, soaked up 99% of the online ad industry’s growth last year, according to Pivotal Research. Does that seem crazy to anyone else?

omot 9y ago
That is absolutely insane. Should we seriously be considering anti-trust regulators to crack down on their insane growth?
- solomatov 9y ago
  As far as I understand, In the US monopoly is fine unless it leads to increase of price paid by consumers. EU probably has different opinion.
  - jonbarker 9y ago
    In this case then since the users are the product and rightfully as said product pay zero dollars to be the product, maybe fb is an advertising monopoly?
  - omot 9y ago
    Didn't the article state that advertisers are indeed paying higher rates?
    - jonbarker 9y ago
      fb can claim (maybe legitimately) that the higher rates are thanks to higher quality performance in the form of conversion rates on various things.
  - darpa_escapee 9y ago
    I was under the impression that even this was okay, it was using a monopoly position in one market to take over another market that wasn't kosher.
    - jonbarker 9y ago
      If I recall correctly in the US court case history they ruled one couldn't both own the means of production (ie movie studios) and the means of distribution of content (ie movie theaters). Not sure if the movie business used market power in one to take over the other, but that would be interesting to know. If you take it as an assumption that the only things that changed with the internet were 1) the volume of content increased and 2) the barrier to entry reduced, then it gets tricky. Example: the Huffington Post proved that content creators would be willing to do so for personal brand exposure instead of pay (kind of like I'm doing now as I am now realizing...). FB has created a content collection and distribution engine "employing" people who are willing to populate it for free in exchange for some non-monetary benefit. This doesn't really get FB out of the antitrust problem IMO.
    - icebraining 9y ago
      It's more complex than that. The law says they can't "unreasonably restrict competition", and then courts have to decide what that actually means. https://en.wikipedia.org/wiki/Sherman_Antitrust_Act https://en.wikipedia.org/wiki/Sherman_Antitrust_Act
  - JCole 9y ago
    Decrease you mean I think
  - askafriend 9y ago
    That's the issue here. Price as a proxy works in a world where manufactured goods account for a large portion of economic value being generated but not in this new unprecedented digital world where the value is intangible and the services are often free. Networks are the new monopolies in this new world and Facebook has the largest and most engaged one which makes it damn near impossible for new incumbents to participate in the market. Just look at Snap. The question is this: how many companies or products were not created or could not sustain due to Facebook's built in monopoly? And of those that were created, how many will thrive? And of those that can thrive, how many can afford to not to be bought by FB? I don't have the answers, but I'm convinced that these are the right questions. Price as a proxy just doesn't seem to make sense in this context.
- TomSawyer 9y ago
  The point of anti-trust laws is not to punish success, but to police against an entity using their dominant position in one market to take over a different market.
  - Silhouette 9y ago
    This is an interesting question for two-sided operations like Google and Facebook. Having a near-monopoly in online search also gives Google a near-monopsony in online search advertising. Likewise for Facebook with social networking. I'm wary of introducing regulation without clear evidence of its necessity. However, there is a reasonable argument that if exploiting a monopoly to gain advantage in an adjacent market can be harmful, then exploiting a monopoly to gain an advantage in an opposing market could be harmful too. It therefore seems reasonable to ask whether the traditional applications of anti-trust principles are still appropriate for these huge modern tech markets.
    - hueving 9y ago
      I'm sorry, but what are you suggesting is harmful here?
      - Silhouette 9y ago
        Businesses too small to have a real point of contact with either Google or Facebook living or dying by the whims (or mistakes) of their algorithms, for one thing. Prices paid by the advertisers more generally, for another. There are only two games in town, and both of them go out of their way to obscure what you're really getting in return for your money.
  - loceng 9y ago
    So what about FB replicating all of SNAP and overtaking them rapidly, taking the advertising growth market share they would of had otherwise? Time to breakup FB?
    - nradov 9y ago
- hueving 9y ago
  I'm curious, what leads you to think that super successful companies should be broken up if they aren't engaging in anti-competitive practices?
tanilama 9y ago
Impressive. So ads money for everyone else :P. Pity those startups that hangs on ads revenue now.
- riku_iki 9y ago
  67% of Google AdSense revenue still go to those startups.
- Silhouette 9y ago
  Also pity the people paying for ads. The lack of competition means Facebook and Google/whatever can get away with some awful practices and quality control. With so few serious alternatives, falling the wrong side of an algorithmic glitch at one of these giants can literally cause a small business to fail, and that's not healthy at all for the economy as a whole.
DeonPenny 9y ago
No what sites do you go to regularly. Most of them use google ads probably except for maybe reddit.
inthewoods 9y ago
Not at all - and I think it will, as much as it can, only get more consolidated as Facebook buys more platforms/apps to grow ad inventory opportunities. Google will also face this same pressure. Amazon will do the same in the retail space.
sremani 9y ago
For those listening, ad contrarian has been yelling about this duopoly fun fact for years.
simlevesque 9y ago
I tried to self host my ads on my personal web site... there are no good open source ad servers. A breakthrough in this area could bring disruption.
- jernejzen 9y ago
  Just from curiosity. OpenX is not around anymore?
  - simlevesque 9y ago
    Yeah, they sold their open source version to Revive and OpenX is now only closed source. Revive is the only existing option. I don't run mysql nor php on my server so I'm a bit reluctant to have to manage it, but it looks like I have no choice.
bllguo 9y ago
It's crazy to me in the sense that Snap is apparently <1% of growth in digital advertising.
- deleted 9y ago
  [deleted]
- altern8tif 9y ago
  Why would that be crazy? Snap is new to the game and their active user base is an order of magnitude smaller than Facebook or Google. If Snap starts showing signs of accelerating DAU/MAU growth, then there's a chance that they'll be >1% of the market.
ransom1538 9y ago
No, it is reality. Having worked in mobile ads, this saying is quite common: "You can buy ads from Google or Facebook, everything else is worthless." The long tale companies are not worth it. The amount of hassle it takes to reach out to "Glam Media" and start working out your own ad deal is a stupid waste of time. You are smarter investing in monitoring your cpi on google/fb. Edit: Glam media shutdown. https://www.recode.net/2016/9/15/12936470/mode-media-glam-shuts-down https://www.recode.net/2016/9/15/12936470/mode-media-glam-sh...
- acchow 9y ago
  I also have friends running small businesses that have given up on Google as well. They say time is a limiting factor, and for them spending all their time optimizing the FB campaigns has a better ROI than using Google.
robryan 9y ago
I am surprised that the Taboola style related articles ads that appear below pretty much anything news like online these days aren't a bigger growth area.
75dvtwin 9y ago
it is strange. couldn't we make up a law that would say each state must license internet ads supplier. And that license does not cross state lines (to protect the quality of the service)

omot 9y ago

That is absolutely insane. Should we seriously be considering anti-trust regulators to crack down on their insane growth?

solomatov 9y ago
As far as I understand, In the US monopoly is fine unless it leads to increase of price paid by consumers. EU probably has different opinion.
- jonbarker 9y ago
  In this case then since the users are the product and rightfully as said product pay zero dollars to be the product, maybe fb is an advertising monopoly?
- omot 9y ago
  Didn't the article state that advertisers are indeed paying higher rates?
  - jonbarker 9y ago
    fb can claim (maybe legitimately) that the higher rates are thanks to higher quality performance in the form of conversion rates on various things.
- darpa_escapee 9y ago
  I was under the impression that even this was okay, it was using a monopoly position in one market to take over another market that wasn't kosher.
  - jonbarker 9y ago
    If I recall correctly in the US court case history they ruled one couldn't both own the means of production (ie movie studios) and the means of distribution of content (ie movie theaters). Not sure if the movie business used market power in one to take over the other, but that would be interesting to know. If you take it as an assumption that the only things that changed with the internet were 1) the volume of content increased and 2) the barrier to entry reduced, then it gets tricky. Example: the Huffington Post proved that content creators would be willing to do so for personal brand exposure instead of pay (kind of like I'm doing now as I am now realizing...). FB has created a content collection and distribution engine "employing" people who are willing to populate it for free in exchange for some non-monetary benefit. This doesn't really get FB out of the antitrust problem IMO.
  - icebraining 9y ago
    It's more complex than that. The law says they can't "unreasonably restrict competition", and then courts have to decide what that actually means. https://en.wikipedia.org/wiki/Sherman_Antitrust_Act https://en.wikipedia.org/wiki/Sherman_Antitrust_Act
- JCole 9y ago
  Decrease you mean I think
- askafriend 9y ago
  That's the issue here. Price as a proxy works in a world where manufactured goods account for a large portion of economic value being generated but not in this new unprecedented digital world where the value is intangible and the services are often free. Networks are the new monopolies in this new world and Facebook has the largest and most engaged one which makes it damn near impossible for new incumbents to participate in the market. Just look at Snap. The question is this: how many companies or products were not created or could not sustain due to Facebook's built in monopoly? And of those that were created, how many will thrive? And of those that can thrive, how many can afford to not to be bought by FB? I don't have the answers, but I'm convinced that these are the right questions. Price as a proxy just doesn't seem to make sense in this context.
TomSawyer 9y ago
The point of anti-trust laws is not to punish success, but to police against an entity using their dominant position in one market to take over a different market.
- Silhouette 9y ago
  This is an interesting question for two-sided operations like Google and Facebook. Having a near-monopoly in online search also gives Google a near-monopsony in online search advertising. Likewise for Facebook with social networking. I'm wary of introducing regulation without clear evidence of its necessity. However, there is a reasonable argument that if exploiting a monopoly to gain advantage in an adjacent market can be harmful, then exploiting a monopoly to gain an advantage in an opposing market could be harmful too. It therefore seems reasonable to ask whether the traditional applications of anti-trust principles are still appropriate for these huge modern tech markets.
  - hueving 9y ago
    I'm sorry, but what are you suggesting is harmful here?
    - Silhouette 9y ago
      Businesses too small to have a real point of contact with either Google or Facebook living or dying by the whims (or mistakes) of their algorithms, for one thing. Prices paid by the advertisers more generally, for another. There are only two games in town, and both of them go out of their way to obscure what you're really getting in return for your money.
- loceng 9y ago
  So what about FB replicating all of SNAP and overtaking them rapidly, taking the advertising growth market share they would of had otherwise? Time to breakup FB?
  - nradov 9y ago
hueving 9y ago
I'm curious, what leads you to think that super successful companies should be broken up if they aren't engaging in anti-competitive practices?

tanilama 9y ago

Impressive. So ads money for everyone else :P. Pity those startups that hangs on ads revenue now.

riku_iki 9y ago
67% of Google AdSense revenue still go to those startups.
Silhouette 9y ago
Also pity the people paying for ads. The lack of competition means Facebook and Google/whatever can get away with some awful practices and quality control. With so few serious alternatives, falling the wrong side of an algorithmic glitch at one of these giants can literally cause a small business to fail, and that's not healthy at all for the economy as a whole.

DeonPenny 9y ago

No what sites do you go to regularly. Most of them use google ads probably except for maybe reddit.

inthewoods 9y ago

Not at all - and I think it will, as much as it can, only get more consolidated as Facebook buys more platforms/apps to grow ad inventory opportunities. Google will also face this same pressure. Amazon will do the same in the retail space.

sremani 9y ago

For those listening, ad contrarian has been yelling about this duopoly fun fact for years.

simlevesque 9y ago

I tried to self host my ads on my personal web site... there are no good open source ad servers. A breakthrough in this area could bring disruption.

jernejzen 9y ago
Just from curiosity. OpenX is not around anymore?
- simlevesque 9y ago
  Yeah, they sold their open source version to Revive and OpenX is now only closed source. Revive is the only existing option. I don't run mysql nor php on my server so I'm a bit reluctant to have to manage it, but it looks like I have no choice.

bllguo 9y ago

It's crazy to me in the sense that Snap is apparently <1% of growth in digital advertising.

deleted 9y ago
[deleted]
altern8tif 9y ago
Why would that be crazy? Snap is new to the game and their active user base is an order of magnitude smaller than Facebook or Google. If Snap starts showing signs of accelerating DAU/MAU growth, then there's a chance that they'll be >1% of the market.

ransom1538 9y ago

No, it is reality. Having worked in mobile ads, this saying is quite common: "You can buy ads from Google or Facebook, everything else is worthless." The long tale companies are not worth it. The amount of hassle it takes to reach out to "Glam Media" and start working out your own ad deal is a stupid waste of time. You are smarter investing in monitoring your cpi on google/fb. Edit: Glam media shutdown. https://www.recode.net/2016/9/15/12936470/mode-media-glam-shuts-down https://www.recode.net/2016/9/15/12936470/mode-media-glam-sh...

acchow 9y ago
I also have friends running small businesses that have given up on Google as well. They say time is a limiting factor, and for them spending all their time optimizing the FB campaigns has a better ROI than using Google.

robryan 9y ago

I am surprised that the Taboola style related articles ads that appear below pretty much anything news like online these days aren't a bigger growth area.

75dvtwin 9y ago

it is strange. couldn't we make up a law that would say each state must license internet ads supplier. And that license does not cross state lines (to protect the quality of the service)