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This kind of seems like a troubling insight at first glance, but it doesn't pass basic sanity checks imo. You could make the same exact argument about any other

This kind of seems like a troubling insight at first glance, but it doesn't pass basic sanity checks imo. You could make the same exact argument about any other type of industry. Watch: >The [pool of discretionary income people have to spend on books] is a small fraction of [all commercial companies' marketing budgets], therefore it will always be more profitable to run free bookstores that try to make money by putting ads inside the dustjackets and all along the shelves. But this obviously isn't true - Barnes and Noble is a thing. Or you could even consider Kindles and the ebook market examples of how this isn't true. It can be far _superior_ in terms of revenue to offer a product that people pay for directly, as opposed to baiting them into a space with ads in it. I think the mistake came in when you compared all of the marketing budgets combined, (call it M), with all of the discretionary income combined, (D), and took it as axiomatic that D << M. But... how could that possibly be true? Most companies will not be operating at a loss, which means their annual marketing budget will be some fraction of their gross revenue. From what I can tell from some googling, at least ~60% of that revenue, averaging over all corporations, is coming directly from... consumers' pocketbooks. Some more googling tells me that marketing spend from US companies was ~$200 billion in 2018. US consumers spent $14 trillion. So the whole premise strikes me as questionable. Am I missing something?

cameronbrown 7y ago
Your argument breaks down when you consider the thing that allows newspaper/web ads to be profitable is the cost of delivery effectively being reduced to zero, whereas a book still has massive printing costs that cannot be scaled as well (thousands of the same books vs. millions of the same newspapers/page views)
- sebastos 7y ago
  B-b-but what about ebooks?
  - deleted 7y ago
    [deleted]
  - cameronbrown 7y ago
    Ebooks are an awful experience both buying and reading.
dangrossman 7y ago
I think what you're missing is that discretionary spending is not all spending, and marketing budgets are a percentage of all spending. When I go to CNN.com right now, I see ads for Tide pods and Toyota SUVs. That ad spend came from our supermarket and car payments, which you can't redirect to tipping websites unless you want to stop eating and driving to work. My argument is basically that no web monetization plan that involves redirecting some of our discretionary spending towards paying websites can make up for the advertising revenue they currently get, because that ad revenue is funded by not only a portion of our discretionary spending, but a portion of ALL our spending, and the non-discretionary portion is much larger. Tide and Toyota are always going to have more money to spend on advertising than Bobby and Jill have the discretion to spend on sponsoring websites.
- tripzilch 7y ago
  > no web monetization plan that involves redirecting some of our discretionary spending towards paying websites can make up for the advertising revenue they currently get, because that ad revenue is funded by not only a portion of our discretionary spending, but a portion of ALL our spending, and the non-discretionary portion is much larger. It kind of sounds like ads are like a pollution on the web, and we should just ban them. What you describe is a lot like the pollution due to over packaging many products in the food industry. You can say consumers shouldn't buy it, but consumers as an aggregate can't handle that and if you want to solve the problem, it's to put less packaging on the shelves. Similarly, if what you describe is true (and it sounds true, because how massive the internet ad industry is, indeed to me never seemed to quite add up to what people do online), then no matter what sort of monetization schemes we come up with for Internet content, most industry everywhere is still going to pollute the Internet with ads, simply because the content producers want more money, the consumer doesn't have it, but the industry marketing budgets do. I think this is partly due to "content producers want more money", because if it's never enough you can wreck any good thing. But the other part is that "the industry" can apparently stuff the Internet full of as many ads as they want without actually being bound by how much the consumer wants to "pay" for the content via ads or (if we figure out micropayments or something) money. Because their spending budget dwarfs that of the consumer. So, just like I always suspected, all these ads are there because the industry wants to advertise on the Internet, not because it needs to be there to pay for the content. Content automatically becomes advertising when it exists by the virtue of a marketing budget. Turns out this whole "your data for our content" deal, that consumers are supposedly choosing for, isn't the relevant transaction at all. You see pretty much the same problem with outdoor advertising and store front signage. The industry has way more than enough money to spend on advertising to ruin the urban scenery with ads and giant billboards. Where I live we have regulations to keep that in check, but when I go to other countries it's really ugly. It's quite bad in the USA, but at least that country hasn't existed for very long. The saddest thing is in older countries where you see historical buildings being half-obscured or even have the billboards bolted on them. Fortunately due to tourism, there are some regulations. Anyway, the point is that our Internet is being ruined with ads by the marketing budgets of the industry, not because the ads are necessary to support the content (they never were--there was content on the Internet before advertising, lots of it too), but simply because they have the money to put as much ads as they want onto our Internet. It reminds me of certain cafes where they play bad commercial radio. You paid for your coffee, to sit there, but you're still subjected to over-loud ads every 15 minutes. This is not because you didn't pay enough for the coffee, it's because whoever paid for that ad has the resources to pollute the soundscape regardless of whether you pay or not.
bakuninsbart 7y ago
To add to your argument: Spotify has 206 million users - almost half of which are paid subscribers.[0] This describes exactly the point of contention since free users are financing spotify through ads instead. I think it is also plausible to assume that among the paid subscribers a higher margin are primary users of spotify for music consumption, while free users have a higher share of secondary users (relying more on vynil, CDs, limewire). The dark side then again for example are news sites - very few of which seem to be able to finance themselves well via subscription services. [0]https://www.cnbc.com/2019/04/05/apple-music-has-reportedly-passed-spotify-in-paid-subscribers-in-the-us.html https://www.cnbc.com/2019/04/05/apple-music-has-reportedly-p...

cameronbrown 7y ago

Your argument breaks down when you consider the thing that allows newspaper/web ads to be profitable is the cost of delivery effectively being reduced to zero, whereas a book still has massive printing costs that cannot be scaled as well (thousands of the same books vs. millions of the same newspapers/page views)

sebastos 7y ago
B-b-but what about ebooks?
- deleted 7y ago
  [deleted]
- cameronbrown 7y ago
  Ebooks are an awful experience both buying and reading.

dangrossman 7y ago

I think what you're missing is that discretionary spending is not all spending, and marketing budgets are a percentage of all spending. When I go to CNN.com right now, I see ads for Tide pods and Toyota SUVs. That ad spend came from our supermarket and car payments, which you can't redirect to tipping websites unless you want to stop eating and driving to work. My argument is basically that no web monetization plan that involves redirecting some of our discretionary spending towards paying websites can make up for the advertising revenue they currently get, because that ad revenue is funded by not only a portion of our discretionary spending, but a portion of ALL our spending, and the non-discretionary portion is much larger. Tide and Toyota are always going to have more money to spend on advertising than Bobby and Jill have the discretion to spend on sponsoring websites.

tripzilch 7y ago
> no web monetization plan that involves redirecting some of our discretionary spending towards paying websites can make up for the advertising revenue they currently get, because that ad revenue is funded by not only a portion of our discretionary spending, but a portion of ALL our spending, and the non-discretionary portion is much larger. It kind of sounds like ads are like a pollution on the web, and we should just ban them. What you describe is a lot like the pollution due to over packaging many products in the food industry. You can say consumers shouldn't buy it, but consumers as an aggregate can't handle that and if you want to solve the problem, it's to put less packaging on the shelves. Similarly, if what you describe is true (and it sounds true, because how massive the internet ad industry is, indeed to me never seemed to quite add up to what people do online), then no matter what sort of monetization schemes we come up with for Internet content, most industry everywhere is still going to pollute the Internet with ads, simply because the content producers want more money, the consumer doesn't have it, but the industry marketing budgets do. I think this is partly due to "content producers want more money", because if it's never enough you can wreck any good thing. But the other part is that "the industry" can apparently stuff the Internet full of as many ads as they want without actually being bound by how much the consumer wants to "pay" for the content via ads or (if we figure out micropayments or something) money. Because their spending budget dwarfs that of the consumer. So, just like I always suspected, all these ads are there because the industry wants to advertise on the Internet, not because it needs to be there to pay for the content. Content automatically becomes advertising when it exists by the virtue of a marketing budget. Turns out this whole "your data for our content" deal, that consumers are supposedly choosing for, isn't the relevant transaction at all. You see pretty much the same problem with outdoor advertising and store front signage. The industry has way more than enough money to spend on advertising to ruin the urban scenery with ads and giant billboards. Where I live we have regulations to keep that in check, but when I go to other countries it's really ugly. It's quite bad in the USA, but at least that country hasn't existed for very long. The saddest thing is in older countries where you see historical buildings being half-obscured or even have the billboards bolted on them. Fortunately due to tourism, there are some regulations. Anyway, the point is that our Internet is being ruined with ads by the marketing budgets of the industry, not because the ads are necessary to support the content (they never were--there was content on the Internet before advertising, lots of it too), but simply because they have the money to put as much ads as they want onto our Internet. It reminds me of certain cafes where they play bad commercial radio. You paid for your coffee, to sit there, but you're still subjected to over-loud ads every 15 minutes. This is not because you didn't pay enough for the coffee, it's because whoever paid for that ad has the resources to pollute the soundscape regardless of whether you pay or not.

bakuninsbart 7y ago

To add to your argument: Spotify has 206 million users - almost half of which are paid subscribers.[0] This describes exactly the point of contention since free users are financing spotify through ads instead. I think it is also plausible to assume that among the paid subscribers a higher margin are primary users of spotify for music consumption, while free users have a higher share of secondary users (relying more on vynil, CDs, limewire). The dark side then again for example are news sites - very few of which seem to be able to finance themselves well via subscription services. [0]https://www.cnbc.com/2019/04/05/apple-music-has-reportedly-passed-spotify-in-paid-subscribers-in-the-us.html https://www.cnbc.com/2019/04/05/apple-music-has-reportedly-p...