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So there has to be a saturation point, right? If every company you interact with is data mining and every data miner sells information to other data miners abou

So there has to be a saturation point, right? If every company you interact with is data mining and every data miner sells information to other data miners about you and there's now a couple terabytes of behavioral info on you, when exactly is there so much data as to render it worthless? Supply/Demand would seem to indicate that as more and more companies turn to data mining, the mined data becomes less and less valuable. Or is this just a symptom of everyone in the advertising business getting by, just by pretending that it's still 1950 and they can target advertising perfectly?

michrassena 9y ago
I think you're onto something, and I've been surprised that the data mining bubble hasn't burst yet. I do however, think that that comparison to 1950s advertising is a bit off. Mass marketing in that era, and indeed, up until the late mid-2000s was at best, a scattershot approach with the granularity of a market segment. This promise of today's approach is to target the individual, based on their past purchasing behavior, search history, email and conversation history.
- bluGill 9y ago
  That only works after someone is identified. I started getting a lot of adds for sheds when I did a search for them: I have no reason to think of any one advertiser. Even if I buy a shed (which I might not) only one will win, and it might not even be a company that has advertised. The smart money would have been to advertise to me long before I was interested in a shed - the company that advertises for years sticks in my mind as a company that might be worth paying extra for because of their "reputation" (even though they built this reputation in advertising)
  - FussyZeus 9y ago
    This is the part that gets me (you beat me to the reply, heh): So you buy a skateboard; then suddenly, your pages are full of skateboard ads. Then you buy a new set of wheels; ok, now your pages would likely be full of parts for a skateboard. Then you buy a ramp or something: Now you get all kinds of skateboard paraphernalia, safety devices, hell maybe some scooters. Given these generous assumptions: * That all these purchases are trackable, by the same advertiser, with definite certainty * That you're even buying online in the first place, so you can advertised to * That you'd respond to advertising at all, because thus far their recommendations have been purely reactive, not predictive of what you'd buy * That an eventual purchase could be directly tied to the advertisers work After all of that investment of time, money, and energy, if they somehow managed to secure a sale of say, knee pads, how much do they actually make? And how much did the knee pad company pay to acquire that lead which led to a sale? My basic question is: How is any of this profitable? It seems like an absolutely massive ecosystem of enormous firms all trading money back and forth and trading data back and forth, to at best, make marginal bumps in otherwise happening sales. This boggles my mind and I would love an enlightened HNer to weigh in if they happen to read this.
    - pdkl95 9y ago
      "Sell more skating stuff to skateboard buyers" isn't the point of targeted advertising. A common misconception is that the targeting is related to what the customer wants, when it's really about creating ways sellers can target specific demographics. The goal isn't about selling some specific product; it's about hitting people at the specific times/situations they are likely to change their buying preferences. I highly recommend reading this[1] article for a very good explanation about how this works. [1] http://www.nytimes.com/2012/02/19/magazine/shopping-habits.html http://www.nytimes.com/2012/02/19/magazine/shopping-habits.h...
    - alphaalpha101 9y ago
      It's annoying, right? I buy a thing and now I get ads for that thing. Well no thanks, I already have one now. Maybe advertise to me before I buy one next time?
neonnoodle 9y ago
Ultimately, personal data is a means to an end, and the end is Selling You Stuff For Money. Increasing wealth inequality in the US means the data collected about most people isn't going to be worth much in absolute dollar terms. For now, the data is being gathered and brokered for the promise of its future value. That is to say, the market is largely speculative. FB and Google (and all the miserable adtech invertebrates in between) REALLY NEED advertisers to believe that this data is worth something. They need advertisers to believe that the ads are working. There is little to no objective, verifiable auditing of online ads. There is massive, rampant fraud. There's a reason why tech CEOs like talking about basic income. If nobody has any money, nobody can spend; if nobody can spend, brands won't advertise, and FB/Google go broke. Unfortunately, in the political climate of the United States, BI is a fart in a stiff wind. Speculation + fraud + shrinking middle class = one major shitstorm on the horizon...

michrassena 9y ago

I think you're onto something, and I've been surprised that the data mining bubble hasn't burst yet. I do however, think that that comparison to 1950s advertising is a bit off. Mass marketing in that era, and indeed, up until the late mid-2000s was at best, a scattershot approach with the granularity of a market segment. This promise of today's approach is to target the individual, based on their past purchasing behavior, search history, email and conversation history.

bluGill 9y ago
That only works after someone is identified. I started getting a lot of adds for sheds when I did a search for them: I have no reason to think of any one advertiser. Even if I buy a shed (which I might not) only one will win, and it might not even be a company that has advertised. The smart money would have been to advertise to me long before I was interested in a shed - the company that advertises for years sticks in my mind as a company that might be worth paying extra for because of their "reputation" (even though they built this reputation in advertising)
- FussyZeus 9y ago
  This is the part that gets me (you beat me to the reply, heh): So you buy a skateboard; then suddenly, your pages are full of skateboard ads. Then you buy a new set of wheels; ok, now your pages would likely be full of parts for a skateboard. Then you buy a ramp or something: Now you get all kinds of skateboard paraphernalia, safety devices, hell maybe some scooters. Given these generous assumptions: * That all these purchases are trackable, by the same advertiser, with definite certainty * That you're even buying online in the first place, so you can advertised to * That you'd respond to advertising at all, because thus far their recommendations have been purely reactive, not predictive of what you'd buy * That an eventual purchase could be directly tied to the advertisers work After all of that investment of time, money, and energy, if they somehow managed to secure a sale of say, knee pads, how much do they actually make? And how much did the knee pad company pay to acquire that lead which led to a sale? My basic question is: How is any of this profitable? It seems like an absolutely massive ecosystem of enormous firms all trading money back and forth and trading data back and forth, to at best, make marginal bumps in otherwise happening sales. This boggles my mind and I would love an enlightened HNer to weigh in if they happen to read this.
  - pdkl95 9y ago
    "Sell more skating stuff to skateboard buyers" isn't the point of targeted advertising. A common misconception is that the targeting is related to what the customer wants, when it's really about creating ways sellers can target specific demographics. The goal isn't about selling some specific product; it's about hitting people at the specific times/situations they are likely to change their buying preferences. I highly recommend reading this[1] article for a very good explanation about how this works. [1] http://www.nytimes.com/2012/02/19/magazine/shopping-habits.html http://www.nytimes.com/2012/02/19/magazine/shopping-habits.h...
  - alphaalpha101 9y ago
    It's annoying, right? I buy a thing and now I get ads for that thing. Well no thanks, I already have one now. Maybe advertise to me before I buy one next time?

neonnoodle 9y ago

Ultimately, personal data is a means to an end, and the end is Selling You Stuff For Money. Increasing wealth inequality in the US means the data collected about most people isn't going to be worth much in absolute dollar terms. For now, the data is being gathered and brokered for the promise of its future value. That is to say, the market is largely speculative. FB and Google (and all the miserable adtech invertebrates in between) REALLY NEED advertisers to believe that this data is worth something. They need advertisers to believe that the ads are working. There is little to no objective, verifiable auditing of online ads. There is massive, rampant fraud. There's a reason why tech CEOs like talking about basic income. If nobody has any money, nobody can spend; if nobody can spend, brands won't advertise, and FB/Google go broke. Unfortunately, in the political climate of the United States, BI is a fart in a stiff wind. Speculation + fraud + shrinking middle class = one major shitstorm on the horizon...