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Again, I don't think the correlation holds in the first place. But if it did, there absolutely is a trade-off. It's more or less impossible to grow any endeavor

by cm2012 7y ago

Again, I don't think the correlation holds in the first place. But if it did, there absolutely is a trade-off. It's more or less impossible to grow any endeavor beyond local scale without ads, unless you're lucky enough to be an industry with a strong viral or press component. Take a look at the S-1s of most companies that go public. 9/10 of the companies have been able to grow because of ads.

anoncake 7y ago
I don't think you understand what I mean by "there is no trade-off". Those endeavours are only useful if and to the extent they create happiness. Also: Companies need ads to grow because their competitors also have ads. That doesn't mean they'd need ads in if ads didn't exist. The one legitimate purpose ads serve – could easily be served through other mechanisms, e.g. by the press. Maybe the press would have to expand but advertising isn't free either. In any case, an independent press is much more suitable to actually inform people than the ad industry which at best informs people by accident while trying to convince people to buy $PRODUCT. Ads are like military: It's mostly necessary because it exists.
- cm2012 7y ago
  Okay. So say you make an app that helps plumbers do their job well. If every plumber used it, plumber productivity would go up 50%, making life easier for all. It cost you years of your time and lots of money to make this great app, and you need a lot of plumbers to buy it to afford to continue working on it. There's a big plumber app on the market already, but yours is way better. How do you get plumbers to hear about your product? 1) The press? Uninterested. Plumber magazines or sites? Very low traffic - no way to scale. 2) Call or knock on doors of every plumber near you? If everyone did this, the spam would be unreal. Also inefficient and not scalable. 3) Referrals? You get some, but most plumbers aren't chomping at the bit to help their competitors. And because you started with so few, referrals are a snails pace and by no means exponential. 4) Organic postings and SEO? The big plumber app is way ahead of you. And 100 other worse apps clog up the listings. No one sees your posts. See the problem? Without ads, you can't grow many many categories of genuinely valuable products. Even if no one else is advertising, you can't really grow without them. This is barely a hypothetical by the way. I've worked with a dozen companies with similar situations.
  - cwkoss 7y ago
    This is fallacious thinking. If you had an app that would increase plumber productivity by 50%, plumbers would be lining up to get into the Beta. Find any plumbing supplier or trade group, and if the effects are actually that good, they'll tell their members at no-charge because that knowledge would be a service to them. Plumbers would be cold-calling other plumbers trying to get a beta invite. All you need is a marginally competent sales person. Advertising is a waste money for quality products, only makes sense for inferior ones.
    - taffer 7y ago
      > If you had an app that would increase plumber productivity by 50%, plumbers would be lining up to get into the Beta. How would plumbers know about the app without advertising? > Find any plumbing supplier [...] they'll tell their members at no-charge In other words: They would advertise it.
      - anoncake 7y ago
        > In other words: They would advertise it. It's quite clear we are talking about paid advertising, not the broader concept of people saying things.
    - cm2012 7y ago
      This is just not true. Example: I was just hired to scale marketing for a particular app. This app currently has over 100 real reviews online, averaging 4.9 stars out of 5. Retention is nuts - 98% of people who ever started using the product (which has a monthly fee) are still using it. The company is three years old. Perfect to take off, right? But few industries are actually viral. We just doubled the number of new customers per month using FB ads in the first two months of scaling it out, and we'll scale much further over the next 3. Anyone who works in start-up growth will tell you the same things I am.
      - cwkoss 7y ago
        Why isn't the app growing organically? You can certainly pay for eyeballs, the question is whether FB ads are giving users with a retention level high enough to justify the advertising expense. Users from online ads tend to much lower quality than those that come from organic traffic, I would not expect your organic retention numbers to hold.
- taffer 7y ago
  If there were no explicit advertising, companies would use other, hidden means to reach customers' minds. Today in the press we have a more or less clear distinction between advertising and content, and I think if we banned advertising it would create an unintended incentive that could lead to the destruction of unbiased journalism as we know it today.
  - cwkoss 7y ago
    > companies would use other, hidden means to reach customers' minds. This is currently done extensively, despite advertising existing. So this doesn't seem like a valid counterpoint.
    - taffer 7y ago
      I explain why this is a valid counterpoint in the second sentence of my post: Today in the press we have a more or less clear distinction between advertising and content, and I think if we banned advertising it would create an unintended incentive that could lead to the destruction of unbiased journalism as we know it today.
      - cwkoss 7y ago
        I think the distinction between advertising and content is a lot more blurry than you realize. The majority of 'news' articles begin from some company's press release, product placement is common in fictional worlds, and journalists frequently self-censor to avoid displeasing advertisers.
  - anoncake 7y ago
    > Today in the press we have a more or less clear distinction between advertising and content, You have heard of native advertising haven't you? Of course ethical journalists refuse to do this. They will still refuse when ordinary ads have been banned. On the other hand, ads make the press less independent. No matter how much you try to avoid it: If someone buys ads in your publication they have influence over you. Be too critical of them and they'll withdraw their funding. They won't openly threaten you, of course, because that is not legal and not necessary.
cwkoss 7y ago
Only companies with inferior products need to advertise: great products are spread quickly at zero cost in the age of social media. Further, a proportion of the sale price funded the advertisement. Any product that has been advertised is necessarily overpriced.
- cm2012 7y ago
  Sentence 1 is untrue. See https://news.ycombinator.com/item?id=20034730 https://news.ycombinator.com/item?id=20034730 for an example. Sentence 3 is also untrue. No advertising means people hear about much fewer brands, which means reduced competition, which means higher prices. This more or less balances out the cost of ads for the consumer.

by cm2012 7y ago

anoncake 7y ago

I don't think you understand what I mean by "there is no trade-off". Those endeavours are only useful if and to the extent they create happiness. Also: Companies need ads to grow because their competitors also have ads. That doesn't mean they'd need ads in if ads didn't exist. The one legitimate purpose ads serve – could easily be served through other mechanisms, e.g. by the press. Maybe the press would have to expand but advertising isn't free either. In any case, an independent press is much more suitable to actually inform people than the ad industry which at best informs people by accident while trying to convince people to buy $PRODUCT. Ads are like military: It's mostly necessary because it exists.

cm2012 7y ago
Okay. So say you make an app that helps plumbers do their job well. If every plumber used it, plumber productivity would go up 50%, making life easier for all. It cost you years of your time and lots of money to make this great app, and you need a lot of plumbers to buy it to afford to continue working on it. There's a big plumber app on the market already, but yours is way better. How do you get plumbers to hear about your product? 1) The press? Uninterested. Plumber magazines or sites? Very low traffic - no way to scale. 2) Call or knock on doors of every plumber near you? If everyone did this, the spam would be unreal. Also inefficient and not scalable. 3) Referrals? You get some, but most plumbers aren't chomping at the bit to help their competitors. And because you started with so few, referrals are a snails pace and by no means exponential. 4) Organic postings and SEO? The big plumber app is way ahead of you. And 100 other worse apps clog up the listings. No one sees your posts. See the problem? Without ads, you can't grow many many categories of genuinely valuable products. Even if no one else is advertising, you can't really grow without them. This is barely a hypothetical by the way. I've worked with a dozen companies with similar situations.
- cwkoss 7y ago
  This is fallacious thinking. If you had an app that would increase plumber productivity by 50%, plumbers would be lining up to get into the Beta. Find any plumbing supplier or trade group, and if the effects are actually that good, they'll tell their members at no-charge because that knowledge would be a service to them. Plumbers would be cold-calling other plumbers trying to get a beta invite. All you need is a marginally competent sales person. Advertising is a waste money for quality products, only makes sense for inferior ones.
  - taffer 7y ago
    > If you had an app that would increase plumber productivity by 50%, plumbers would be lining up to get into the Beta. How would plumbers know about the app without advertising? > Find any plumbing supplier [...] they'll tell their members at no-charge In other words: They would advertise it.
    - anoncake 7y ago
      > In other words: They would advertise it. It's quite clear we are talking about paid advertising, not the broader concept of people saying things.
  - cm2012 7y ago
    This is just not true. Example: I was just hired to scale marketing for a particular app. This app currently has over 100 real reviews online, averaging 4.9 stars out of 5. Retention is nuts - 98% of people who ever started using the product (which has a monthly fee) are still using it. The company is three years old. Perfect to take off, right? But few industries are actually viral. We just doubled the number of new customers per month using FB ads in the first two months of scaling it out, and we'll scale much further over the next 3. Anyone who works in start-up growth will tell you the same things I am.
    - cwkoss 7y ago
      Why isn't the app growing organically? You can certainly pay for eyeballs, the question is whether FB ads are giving users with a retention level high enough to justify the advertising expense. Users from online ads tend to much lower quality than those that come from organic traffic, I would not expect your organic retention numbers to hold.
taffer 7y ago
If there were no explicit advertising, companies would use other, hidden means to reach customers' minds. Today in the press we have a more or less clear distinction between advertising and content, and I think if we banned advertising it would create an unintended incentive that could lead to the destruction of unbiased journalism as we know it today.
- cwkoss 7y ago
  > companies would use other, hidden means to reach customers' minds. This is currently done extensively, despite advertising existing. So this doesn't seem like a valid counterpoint.
  - taffer 7y ago
    I explain why this is a valid counterpoint in the second sentence of my post: Today in the press we have a more or less clear distinction between advertising and content, and I think if we banned advertising it would create an unintended incentive that could lead to the destruction of unbiased journalism as we know it today.
    - cwkoss 7y ago
      I think the distinction between advertising and content is a lot more blurry than you realize. The majority of 'news' articles begin from some company's press release, product placement is common in fictional worlds, and journalists frequently self-censor to avoid displeasing advertisers.
- anoncake 7y ago
  > Today in the press we have a more or less clear distinction between advertising and content, You have heard of native advertising haven't you? Of course ethical journalists refuse to do this. They will still refuse when ordinary ads have been banned. On the other hand, ads make the press less independent. No matter how much you try to avoid it: If someone buys ads in your publication they have influence over you. Be too critical of them and they'll withdraw their funding. They won't openly threaten you, of course, because that is not legal and not necessary.

cwkoss 7y ago

Only companies with inferior products need to advertise: great products are spread quickly at zero cost in the age of social media. Further, a proportion of the sale price funded the advertisement. Any product that has been advertised is necessarily overpriced.

cm2012 7y ago
Sentence 1 is untrue. See https://news.ycombinator.com/item?id=20034730 https://news.ycombinator.com/item?id=20034730 for an example. Sentence 3 is also untrue. No advertising means people hear about much fewer brands, which means reduced competition, which means higher prices. This more or less balances out the cost of ads for the consumer.