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I've worked with System1 in a previous job. One of their main products is ad arbitrage, which as far as I can tell adds zero (or negative) value to the average

I've worked with System1 in a previous job. One of their main products is ad arbitrage, which as far as I can tell adds zero (or negative) value to the average consumer's browsing experience. This is a company that only cares about extracting as much money as they can by finding new ways of showing you ads. As a side note - the whole digital advertising industry reminds me a little of the financial engineering on Wall Street of the last decade. Doesn't add any new value to society - and in many ways actually harms it - but makes so much money that companies build their whole strategy around it.

friedman23 7y ago
Why do you say it doesn't add value? I assume the targeting actually works and improves ad performance for advertisers?
- mattigames 7y ago
  I see you omitted "to society" on purpose on your question (after the word "value")
  - friedman23 7y ago
    Many things exist that don't add value to "society", I'm going to stick to worrying about the value given to the people actually doing the purchasing thank you.
  - Mirioron 7y ago
    But if it improves ad performance for the people advertising then it does provide value for society. If nobody knows about your product then nobody's going to use it, which would make your product worthless to society regardless how good it is. Just think about launching a product, but you aren't allowed to advertise it in any way. You can't even expect word of mouth, because somebody would have to actually have known it exists.
    - eropple 7y ago
      You're assuming that marginally-advertised things are worth the attention budget of anyone downrange of it. In the modern era and with the corpus of data available to them, advertisers are psychological attackers and should be treated as such.
      - Mirioron 7y ago
        Ads are worth it to some people, because products do have customers and some of those customers had to learn about the product from the maker in some way. They're not worth it for everyone that sees them, but that's exactly what these types of ad middle men are trying to improve - to be able to show relevant ads to relevant people. I say trying, because they've pretty much only failed at it. The company you work at creates a product. How would people find out about it without any advertising? Keep in mind that even just having a sign in front of a store is advertising.
        theamk 7y ago
        We are not talking about general "advertising" concept -- we are talking specifically about System1, which is ad arbitrage and "unlocks consumer intent across channels including social, native, email, search" There is nothing wrong with non-tracking advertizing -- looking solely at the content of the page ad is embedded it, or at the search term for the search engine is enough to let people know about new products, and has no negative social implications.
        NeedMoreTea 7y ago
        Hmm, I'm with the GP. I've lived through the transition from mostly restrained and controlled (and often very naive) UK advertising in the sixties and seventies, through to today when advertising ate everything. Available in-yer-face on every surface, tracking every move and psychologically trying to manipulate. We can trust nothing whatsoever. I didn't much mind how it was, I detest how it is now. Probably a very minority view on HN, but I'd like to outlaw and treat as hostile all forms of advertising, except: + Yellow Pages style classified magazines and sites - Like old-school Yellow Pages, or the classifieds in the back of old magazines. When I want a new product, I can open the site or book and look for one. Easy. + Flat, silent and static magazine and newspaper style ads, locally served. + Branding on the packaging. + Shop signage akin to say the sixties or earlier - sign on frontage only. Illumination only whilst store open, and it's after lighting up time. No 20m KFC neon topped poles outside. No floodlights 24/7. Nowt else. I'm fucking sick of the advertising arms race.
- esotericn 7y ago
  It'd add value to my bank account if I stole your car.
rdbell 7y ago
Former adtech CTO here. I've heard this argument a lot but it's hard for me to agree. Saying that ad arbitrage doesn't "add value" is kind of like arguing that someone with a media-buying/sales role doesn't "add value" because they're just sitting in the middle taking a paycheck/commission. Partnering with ad arbitragers isn't much different than outsourcing internal media buying/sales roles to an agency to increase reach or fill-rate. Your point about ads being annoying to end-users isn't unique to digital. Advertisements on all mediums have always annoyed end-users. Certain implementations like full-page takeovers & loading 100 ads on a page are the most annoying. Generally it's the publisher's fault for the bad UX.
- Jamwinner 7y ago
  You are paid to be part of the problem, why would you understand it or even try? Its clear you dont want to.
- detaro 7y ago
  It's kind of funny how both counter-replies seem to ignore everything after the first word of "value to the average consumer's browsing experience".
  - eropple 7y ago
    There's that old saw about being incapable of understanding when one's salary depends on the misunderstanding, and it applies here. Our profession has helped make advertisements markedly worse (which is to say, better, by data-mining the hell out of individuals and aggregates alike and sharpening the psychological tools of attack to points) and markedly more aggressive, but fuck it, let's go shopping. I guess.
  - rdbell 7y ago
    Did you read the last paragraph in my post? I explicitly addressed that. My point is: 1. Ad arbitrage has a role. 2. The blame of annoying/bad UX is unfairly being deferred to arbitragers. It's usually the implementation that annoys users, and that's generally the publisher's fault. I don't know anything about System1's ethics and I'm not trying defend them by any means, but I don't agree with an argument that X company is bad because they've participated in arbitrage.
throwGuardian 7y ago
It's hyperbolic to proclaim ad tech doesn't add value, given that Facebook and Google manage to serve billions of happy customers with services subsidised by ad tech. That in no way implies I approve or like what they do - I run ad block wherever possible. Just refuse to believe in falsehoods trendy among rich, Urban tech savvy HN-ers, whose reality is far removed from the truth. Some estimates peg the value of "free" internet services, like Google search, Gmail, Facebook, etc at $30/month. That's a lot of value, if you ask me
- zucker42 7y ago
  He was saying ad arbitrage adds no value. As far as I can tell, this means the same ads are sold, and the free services receive the same amount of money, but companies have to pay more for ads and System1 takes a cut.

friedman23 7y ago

Why do you say it doesn't add value? I assume the targeting actually works and improves ad performance for advertisers?

mattigames 7y ago
I see you omitted "to society" on purpose on your question (after the word "value")
- friedman23 7y ago
  Many things exist that don't add value to "society", I'm going to stick to worrying about the value given to the people actually doing the purchasing thank you.
- Mirioron 7y ago
  But if it improves ad performance for the people advertising then it does provide value for society. If nobody knows about your product then nobody's going to use it, which would make your product worthless to society regardless how good it is. Just think about launching a product, but you aren't allowed to advertise it in any way. You can't even expect word of mouth, because somebody would have to actually have known it exists.
  - eropple 7y ago
    You're assuming that marginally-advertised things are worth the attention budget of anyone downrange of it. In the modern era and with the corpus of data available to them, advertisers are psychological attackers and should be treated as such.
    - Mirioron 7y ago
      Ads are worth it to some people, because products do have customers and some of those customers had to learn about the product from the maker in some way. They're not worth it for everyone that sees them, but that's exactly what these types of ad middle men are trying to improve - to be able to show relevant ads to relevant people. I say trying, because they've pretty much only failed at it. The company you work at creates a product. How would people find out about it without any advertising? Keep in mind that even just having a sign in front of a store is advertising.
      - theamk 7y ago
        We are not talking about general "advertising" concept -- we are talking specifically about System1, which is ad arbitrage and "unlocks consumer intent across channels including social, native, email, search" There is nothing wrong with non-tracking advertizing -- looking solely at the content of the page ad is embedded it, or at the search term for the search engine is enough to let people know about new products, and has no negative social implications.
      - NeedMoreTea 7y ago
        Hmm, I'm with the GP. I've lived through the transition from mostly restrained and controlled (and often very naive) UK advertising in the sixties and seventies, through to today when advertising ate everything. Available in-yer-face on every surface, tracking every move and psychologically trying to manipulate. We can trust nothing whatsoever. I didn't much mind how it was, I detest how it is now. Probably a very minority view on HN, but I'd like to outlaw and treat as hostile all forms of advertising, except: + Yellow Pages style classified magazines and sites - Like old-school Yellow Pages, or the classifieds in the back of old magazines. When I want a new product, I can open the site or book and look for one. Easy. + Flat, silent and static magazine and newspaper style ads, locally served. + Branding on the packaging. + Shop signage akin to say the sixties or earlier - sign on frontage only. Illumination only whilst store open, and it's after lighting up time. No 20m KFC neon topped poles outside. No floodlights 24/7. Nowt else. I'm fucking sick of the advertising arms race.
esotericn 7y ago
It'd add value to my bank account if I stole your car.

rdbell 7y ago

Former adtech CTO here. I've heard this argument a lot but it's hard for me to agree. Saying that ad arbitrage doesn't "add value" is kind of like arguing that someone with a media-buying/sales role doesn't "add value" because they're just sitting in the middle taking a paycheck/commission. Partnering with ad arbitragers isn't much different than outsourcing internal media buying/sales roles to an agency to increase reach or fill-rate. Your point about ads being annoying to end-users isn't unique to digital. Advertisements on all mediums have always annoyed end-users. Certain implementations like full-page takeovers & loading 100 ads on a page are the most annoying. Generally it's the publisher's fault for the bad UX.

Jamwinner 7y ago
You are paid to be part of the problem, why would you understand it or even try? Its clear you dont want to.
detaro 7y ago
It's kind of funny how both counter-replies seem to ignore everything after the first word of "value to the average consumer's browsing experience".
- eropple 7y ago
  There's that old saw about being incapable of understanding when one's salary depends on the misunderstanding, and it applies here. Our profession has helped make advertisements markedly worse (which is to say, better, by data-mining the hell out of individuals and aggregates alike and sharpening the psychological tools of attack to points) and markedly more aggressive, but fuck it, let's go shopping. I guess.
- rdbell 7y ago
  Did you read the last paragraph in my post? I explicitly addressed that. My point is: 1. Ad arbitrage has a role. 2. The blame of annoying/bad UX is unfairly being deferred to arbitragers. It's usually the implementation that annoys users, and that's generally the publisher's fault. I don't know anything about System1's ethics and I'm not trying defend them by any means, but I don't agree with an argument that X company is bad because they've participated in arbitrage.

throwGuardian 7y ago

It's hyperbolic to proclaim ad tech doesn't add value, given that Facebook and Google manage to serve billions of happy customers with services subsidised by ad tech. That in no way implies I approve or like what they do - I run ad block wherever possible. Just refuse to believe in falsehoods trendy among rich, Urban tech savvy HN-ers, whose reality is far removed from the truth. Some estimates peg the value of "free" internet services, like Google search, Gmail, Facebook, etc at $30/month. That's a lot of value, if you ask me

zucker42 7y ago
He was saying ad arbitrage adds no value. As far as I can tell, this means the same ads are sold, and the free services receive the same amount of money, but companies have to pay more for ads and System1 takes a cut.