5 ms·

> A universal truth in the social network space. In all of advertising. Non-US users remain extremely hard to monetize across the board.

by dsl 8y ago

sharkweek 8y ago
ELI5 - are there any prevailing theories as to why this is?
- airstrike 8y ago
  From my Latin American perspective, I'd say it's due to way less disposable income in emerging markets and less of a consumerism mindset. America has the benefit of decades of intense consumerist propaganda to fend off the evil reds, while the biggest emerging markets are often very vocally against "Capitalism" (even if they would all love to own iPhones)
  - GordonS 8y ago
    What about Europe, especially Western and Northern - plenty of disposable income to go round there?
    - airstrike 8y ago
      Not really... wages suck and taxes are massive. They just have an absurd level of government welfare
      - johannes1234321 8y ago
        Even though there are "absurd" levels health costs in Europe are lower than in the U.S. leading to higher life expectancy.
    - mruts 8y ago
      Maybe, but America has relatively low taxes and high income. This is an anecdote, but I was looking at developer jobs in Europe and the salaries are pathetic. 65k Euros for a senior engineer with a 50% tax rate? Are you fucking kidding me? I can make 250k in the US at a 35% rate. It’s absurd. No wonder Europe has a brain drain problem...
      - zepearl 8y ago
        Developers earn 250k USD/year in the US? Any reference to the european "brain dead"-problem?
        pm90 8y ago
        > european "brain dead" I'm guessing you mean brain drain. Or is there a Creutzfeldt-Jakob disease epidemic that I missed? : )
        zepearl 8y ago
        haha, thx, soooorry, I misread... :))
        freeone3000 8y ago
        Yes. https://voxeu.org/article/european-brain-drain https://voxeu.org/article/european-brain-drain is fairly comprehensive, but the idea is that highly skilled people generally go where they're paid the most for their skills.
        kensai 8y ago
        This is an 11-year old article and honestly total bullshit. European developers and professionals in general are quite happy with the welfare in Europe. It's a completely different mindset. Yes we earn much less, but at least if we can sick or fired we know we can get some decent support from the state.
        mruts 8y ago
        Not all of them, but engineering jobs with total comp >250k USD are not difficult to find at all.
- sonnyblarney 8y ago
  The first-order issues are: a) Money. Most places do not have a lot of surplus wealth, and only a few places in Europe do. Consumers need to have extra money to spend on 'stuff' beyond the very basics, i.e. a consumer oriented economy for a lot of ads to work. b) Fragmentation. This is a two-sided problem. Most countries are very small, have their own laws, regs, and networks for everything that are very established. So the unit cost of marketing to advertisers etc. is going to be higher. And things move slower in most places. c) Behaviour. American culture is pop culture. Sometimes it's hard to explain that one. Americans move according to trends. Social mores change quickly depending on whoever has the biggest megaphone: news, broadcasters, even advertisers. It's a place where commercial interests drive aspiration, even morality - witness the amount of virtue signalling in ads, i.e. Nike's recent campaign etc. W. Europe, the other lucrative market - they are really traditional in their ways. They already have their day full of things to do. Germans leave work at 5 and go and drink a specific kind of beer at the local pub. They play certain kinds of sports. They buy certain things. In the UK, I've been to 'rich people's' homes and they have these ancient toasters. But they work! They don't just 'buy new stuff' it's not part of their culture. It's the same in most of the rest of the world. The rest of the world is really just not designed as a big commercial vehicle.
  - nradov 8y ago
    I thought the EU eliminated most of the fragmentation in laws and regulations?
- acchow 8y ago
  The more digital your business is the better able you are to monetize digital (and any) advertising. Digital advertising becomes more valuable the better you are able to track digital intents/impressions/sales through all your channels.
nradov 8y ago
The EU advertising industry is only slightly smaller than in the US on a per-capita basis. So obviously those consumers are being monetized, otherwise businesses wouldn't be spending so much on advertising.
- acchow 8y ago
  US vs. EU advertising spend is about $200bn vs. 100bn euros. On a per capita basis, that is $611/pp vs. 200 euros/pp. I wouldn't call that "only slightly smaller".

> A universal truth in the social network space. In all of advertising. Non-US users remain extremely hard to monetize across the board.

by dsl 8y ago

> A universal truth in the social network space. In all of advertising. Non-US users remain extremely hard to monetize across the board.

sharkweek 8y ago

ELI5 - are there any prevailing theories as to why this is?

airstrike 8y ago
From my Latin American perspective, I'd say it's due to way less disposable income in emerging markets and less of a consumerism mindset. America has the benefit of decades of intense consumerist propaganda to fend off the evil reds, while the biggest emerging markets are often very vocally against "Capitalism" (even if they would all love to own iPhones)
- GordonS 8y ago
  What about Europe, especially Western and Northern - plenty of disposable income to go round there?
  - airstrike 8y ago
    Not really... wages suck and taxes are massive. They just have an absurd level of government welfare
    - johannes1234321 8y ago
      Even though there are "absurd" levels health costs in Europe are lower than in the U.S. leading to higher life expectancy.
  - mruts 8y ago
    Maybe, but America has relatively low taxes and high income. This is an anecdote, but I was looking at developer jobs in Europe and the salaries are pathetic. 65k Euros for a senior engineer with a 50% tax rate? Are you fucking kidding me? I can make 250k in the US at a 35% rate. It’s absurd. No wonder Europe has a brain drain problem...
    - zepearl 8y ago
      Developers earn 250k USD/year in the US? Any reference to the european "brain dead"-problem?
      - pm90 8y ago
        > european "brain dead" I'm guessing you mean brain drain. Or is there a Creutzfeldt-Jakob disease epidemic that I missed? : )
        zepearl 8y ago
        haha, thx, soooorry, I misread... :))
      - freeone3000 8y ago
        Yes. https://voxeu.org/article/european-brain-drain https://voxeu.org/article/european-brain-drain is fairly comprehensive, but the idea is that highly skilled people generally go where they're paid the most for their skills.
        kensai 8y ago
        This is an 11-year old article and honestly total bullshit. European developers and professionals in general are quite happy with the welfare in Europe. It's a completely different mindset. Yes we earn much less, but at least if we can sick or fired we know we can get some decent support from the state.
      - mruts 8y ago
        Not all of them, but engineering jobs with total comp >250k USD are not difficult to find at all.
sonnyblarney 8y ago
The first-order issues are: a) Money. Most places do not have a lot of surplus wealth, and only a few places in Europe do. Consumers need to have extra money to spend on 'stuff' beyond the very basics, i.e. a consumer oriented economy for a lot of ads to work. b) Fragmentation. This is a two-sided problem. Most countries are very small, have their own laws, regs, and networks for everything that are very established. So the unit cost of marketing to advertisers etc. is going to be higher. And things move slower in most places. c) Behaviour. American culture is pop culture. Sometimes it's hard to explain that one. Americans move according to trends. Social mores change quickly depending on whoever has the biggest megaphone: news, broadcasters, even advertisers. It's a place where commercial interests drive aspiration, even morality - witness the amount of virtue signalling in ads, i.e. Nike's recent campaign etc. W. Europe, the other lucrative market - they are really traditional in their ways. They already have their day full of things to do. Germans leave work at 5 and go and drink a specific kind of beer at the local pub. They play certain kinds of sports. They buy certain things. In the UK, I've been to 'rich people's' homes and they have these ancient toasters. But they work! They don't just 'buy new stuff' it's not part of their culture. It's the same in most of the rest of the world. The rest of the world is really just not designed as a big commercial vehicle.
- nradov 8y ago
  I thought the EU eliminated most of the fragmentation in laws and regulations?
acchow 8y ago
The more digital your business is the better able you are to monetize digital (and any) advertising. Digital advertising becomes more valuable the better you are able to track digital intents/impressions/sales through all your channels.

nradov 8y ago

The EU advertising industry is only slightly smaller than in the US on a per-capita basis. So obviously those consumers are being monetized, otherwise businesses wouldn't be spending so much on advertising.

acchow 8y ago
US vs. EU advertising spend is about $200bn vs. 100bn euros. On a per capita basis, that is $611/pp vs. 200 euros/pp. I wouldn't call that "only slightly smaller".