4 ms·

You will when you see the knock on effect to all consumer good pricing

by edf13 7y ago

aqme28 7y ago
Why would there be any significant added cost to consumer good pricing?
- sailfast 7y ago
  Everything "free" on the internet could potentially have a reduced revenue stream. People will have to make up the difference somewhere in order to provide these services if they can no longer monetize the data. Users that already pay for these services for this exact reason shouldn't be impacted, but it will impact other services that people consider "free", I would imagine.
- JumpCrisscross 7y ago
  > Why would there be any significant added cost to consumer good pricing? Assuming ad tech makes advertising more effective, banning it would make challenging a market incumbent more difficult. You'd need to burn more cash to teach more consumers about your product, a larger fraction of whom would be outside your target market. Granted, ad tech does not always add value. And there is a legitimate question as to the trade-off between privacy and consumer prices. But the tradeoff exists. Reducing the threat of new entrants means incumbents will raise prices.
  - sitkack 7y ago
    That assumes there is only one way to reach users, ie through internet wide surveillance. This is simply not true. You have a new wakeboard gadget, advertise it on a wakeboard forum or a wakeboard site. I visit EETimes so I can see the ads. An intermediary doesn't need to know me so they can profit from selling my existence and desires to a 3rd party at the drop of a hat.
    - JumpCrisscross 7y ago
      > That assumes there is only one way to reach users No, it doesn't. If you have three pipelines between points A and B, removing one of them will raise downstream prices. It doesn't matter that there are two others. Removing an option will increase the cost of the others, even assuming equal effectiveness.
      - sitkack 7y ago
        People are not flows, compressible or not.
        ambicapter 7y ago
        Cashflows are, which is what GP is talking about.
    - vonmoltke 7y ago
      > That assumes there is only one way to reach users, ie through internet wide surveillance. This is simply not true. You have a new wakeboard gadget, advertise it on a wakeboard forum or a wakeboard site. I visit EETimes so I can see the ads. This assumes "ad tech" == "internet wide surveillance". That is certainly the most profitable subset, but it is still just a subset. Something needs to serve those ads and make sure they are relevant to the content they are shown with, even if it exclusively uses the context of the specific page being loaded. Something needs to manage campaign tracking to know which specific sites or which specific ad copy is driving users in, even if no information about the users themselves is captured. Something needs to manage the connections between the ad copy and the site being advertised, both to ensure users go to the place they are supposed to and to combat malicious or hijacked ads. All of this is "ad tech". Even if you think we should return exclusively to the days of random, untracked banner ads some amount of ad tech is necessary.
      - sitkack 7y ago
        I agree, and I don’t think it is necessarily bad. But biz and marketing folks tasted milk and honey of the panopticon and they will fight kicking and screaming to keep it.
  - ryandrake 7y ago
    This assumes companies can raise prices profitably. But if that were the case, why wouldn’t they raise prices right now, independent of what happens to costs? I don’t buy many of the “costs will be passed on to consumers” arguments against regulation. If you assume companies already price things efficiently to maximize profit, then they cannot raise prices any further and make more money.
    - davidxc 7y ago
      Look up tax incidence and elasticity of supply / demand curves. Yes, it could definitely be reasonable to assume, from a modeling perspective, that companies currently charge the optimal price for maximizing profit. However, once you impose extra transaction costs on companies (like a tax), the equilibrium price will then change (previous equilibrium is no longer the equilibrium because external state has changed). By your argument, taxing a transaction in a market would not ever raise the price charged to the demand side. It's pretty easy to see by reading a chapter about tax incidence (which is different from where the tax is legally placed) and elasticities of supply/demand curves that this is definitely false (not just in theory, but also in practice)
  - TeMPOraL 7y ago
    That's assuming adtech is somehow making advertising disproportionately more effective for new companies than for established ones. If that assumption is wrong, and I suspect that it is, then rolling it back will make challengers no worse off than before - while hugely benefiting both every living human on the planet[0] individually, and every society as a whole. A similar argument could apply to cut the entire advertising industry down to mail-order catalogs and trade shows, which is something I'd like to see happening. -- [0] - Except the Sentinelese, I guess.
  - aqme28 7y ago
    >banning it would make challenging a market incumbent more difficult. That doesn't seem obvious to me. Why would it not make it more difficult for the incumbents relative to the upstarts?
deleted 7y ago
[deleted]
saurik 7y ago
That seems like a good thing: it takes an externalized cost and makes it explicit.
UnFleshedOne 7y ago
Advertising is the zero sum arms race in established markets especially (which would be a majority of markets I suppose) -- if one company spends more or has more effective ads, it pushes competitors to spend or improve on their own ads. That cost is being passed down to consumers. So by getting rid of all advertising everybody would see bigger margins and can cut prices.

You will when you see the knock on effect to all consumer good pricing

by edf13 7y ago

You will when you see the knock on effect to all consumer good pricing

aqme28 7y ago

Why would there be any significant added cost to consumer good pricing?

sailfast 7y ago
Everything "free" on the internet could potentially have a reduced revenue stream. People will have to make up the difference somewhere in order to provide these services if they can no longer monetize the data. Users that already pay for these services for this exact reason shouldn't be impacted, but it will impact other services that people consider "free", I would imagine.
JumpCrisscross 7y ago
> Why would there be any significant added cost to consumer good pricing? Assuming ad tech makes advertising more effective, banning it would make challenging a market incumbent more difficult. You'd need to burn more cash to teach more consumers about your product, a larger fraction of whom would be outside your target market. Granted, ad tech does not always add value. And there is a legitimate question as to the trade-off between privacy and consumer prices. But the tradeoff exists. Reducing the threat of new entrants means incumbents will raise prices.
- sitkack 7y ago
  That assumes there is only one way to reach users, ie through internet wide surveillance. This is simply not true. You have a new wakeboard gadget, advertise it on a wakeboard forum or a wakeboard site. I visit EETimes so I can see the ads. An intermediary doesn't need to know me so they can profit from selling my existence and desires to a 3rd party at the drop of a hat.
  - JumpCrisscross 7y ago
    > That assumes there is only one way to reach users No, it doesn't. If you have three pipelines between points A and B, removing one of them will raise downstream prices. It doesn't matter that there are two others. Removing an option will increase the cost of the others, even assuming equal effectiveness.
    - sitkack 7y ago
      People are not flows, compressible or not.
      - ambicapter 7y ago
        Cashflows are, which is what GP is talking about.
  - vonmoltke 7y ago
    > That assumes there is only one way to reach users, ie through internet wide surveillance. This is simply not true. You have a new wakeboard gadget, advertise it on a wakeboard forum or a wakeboard site. I visit EETimes so I can see the ads. This assumes "ad tech" == "internet wide surveillance". That is certainly the most profitable subset, but it is still just a subset. Something needs to serve those ads and make sure they are relevant to the content they are shown with, even if it exclusively uses the context of the specific page being loaded. Something needs to manage campaign tracking to know which specific sites or which specific ad copy is driving users in, even if no information about the users themselves is captured. Something needs to manage the connections between the ad copy and the site being advertised, both to ensure users go to the place they are supposed to and to combat malicious or hijacked ads. All of this is "ad tech". Even if you think we should return exclusively to the days of random, untracked banner ads some amount of ad tech is necessary.
    - sitkack 7y ago
      I agree, and I don’t think it is necessarily bad. But biz and marketing folks tasted milk and honey of the panopticon and they will fight kicking and screaming to keep it.
- ryandrake 7y ago
  This assumes companies can raise prices profitably. But if that were the case, why wouldn’t they raise prices right now, independent of what happens to costs? I don’t buy many of the “costs will be passed on to consumers” arguments against regulation. If you assume companies already price things efficiently to maximize profit, then they cannot raise prices any further and make more money.
  - davidxc 7y ago
    Look up tax incidence and elasticity of supply / demand curves. Yes, it could definitely be reasonable to assume, from a modeling perspective, that companies currently charge the optimal price for maximizing profit. However, once you impose extra transaction costs on companies (like a tax), the equilibrium price will then change (previous equilibrium is no longer the equilibrium because external state has changed). By your argument, taxing a transaction in a market would not ever raise the price charged to the demand side. It's pretty easy to see by reading a chapter about tax incidence (which is different from where the tax is legally placed) and elasticities of supply/demand curves that this is definitely false (not just in theory, but also in practice)
- TeMPOraL 7y ago
  That's assuming adtech is somehow making advertising disproportionately more effective for new companies than for established ones. If that assumption is wrong, and I suspect that it is, then rolling it back will make challengers no worse off than before - while hugely benefiting both every living human on the planet[0] individually, and every society as a whole. A similar argument could apply to cut the entire advertising industry down to mail-order catalogs and trade shows, which is something I'd like to see happening. -- [0] - Except the Sentinelese, I guess.
- aqme28 7y ago
  >banning it would make challenging a market incumbent more difficult. That doesn't seem obvious to me. Why would it not make it more difficult for the incumbents relative to the upstarts?

deleted 7y ago

[deleted]

saurik 7y ago

That seems like a good thing: it takes an externalized cost and makes it explicit.

UnFleshedOne 7y ago

Advertising is the zero sum arms race in established markets especially (which would be a majority of markets I suppose) -- if one company spends more or has more effective ads, it pushes competitors to spend or improve on their own ads. That cost is being passed down to consumers. So by getting rid of all advertising everybody would see bigger margins and can cut prices.