5 ms·

The new dot com bubble is here: it’s called online advertising

43 points by ericzawo 7y ago

PaulHoule 7y ago
If online advertising isn't worth the spend, it seems certain that legacy advertising wasn't worth the spend. People just couldn't prove it. That would mean that legacy TV, Newspapers, etc. were all a bubble too.
- sarcasmatwork 7y ago
  Correct, it was a bubble for the time, but it is dying.. maybe not 100%, but there will be less money for these types. Now there is word of mouth, or target advertising or just listening to your mic (FB, Google, NSA) to then push ads on every platform. For example, billboards are very expensive with not much ROI. How many billboards do we drive by and not pay attention, or will never buy that product or get the message thats on it. It's rate imho. With tech, there are less or no ads/commercials in TV episodes. We can either fast fwd through the ad, or there are none.
  - dragontamer 7y ago
    > With tech, there are less or no ads/commercials in TV episodes. We can either fast fwd through the ad, or there are none. Depends on what you mean by "commercials". Hasbro cartoon series (Transformers, Mighty Max, My Little Pony, etc. etc.) were basically money-losers designed to get kids to buy toys. The entire TV show was effectively a giant commercial.
- ceejayoz 7y ago
  The newspaper bubble has been popping for two decades now, hasn't it?
kuharich 7y ago
Prior discussion: https://news.ycombinator.com/item?id=21465873 https://news.ycombinator.com/item?id=21465873
deleted 7y ago
[deleted]
quickdocu 7y ago
ok thats nice but how does the new one work http://buypassport-idcards.company.com http://buypassport-idcards.company.com
nartz 7y ago
OPINION: This is just propoganda - its not a bubble - its just negative press around tech companies - not helpful.
- cpr 7y ago
  Can you refute his specific stories about eBay's misguided advertising, etc.?
  - nartz 7y ago
    This is all anecdotal - its clear that online advertising has a lot of value - ebay is a huge brand, and removing advertising for "shoes" might not be easily measureable - however, there are tons of business relying solely on this form of advertising - no one would find their websites if they didn't.
quickdocu 7y ago
so how does this new 1 work http://buypassport-idcards.company.com http://buypassport-idcards.company.com
quickdocu 7y ago
prior discussionhttp://buypassport-idcards.company.com http://buypassport-idcards.company.com
jrockway 7y ago
I think advertising will always be something that people spend money on. The reality is that people don't care what specific product they buy when they need to buy a class of product. What's your favorite brand of toilet paper or toothpaste or whole wheat flour? You probably have no preference; so if advertisers spend money on putting their product first in the Amazon results or at eye level in the grocery store, you will probably buy that one. It matters to them, but doesn't matter to you. And for that reason, they will always spend money on it. There are also things that I buy where I do have a preference, but could be persuaded to try something else. I have particular brands of t-shirts, underwear, socks, etc. that I re-up on from time to time, but if some evidence arrives "this is better" I would consider buying it. Most of the ads I see on the Internet are kind of a waste, though. Here are some ads I remember from the New York Times, which is basically the only platform that I don't block ads on: 1) Delta has a lot of flights to the west coast from New York. I don't really care, I have 700,000 miles on American and unless you are going to sell me a business class seat for economy prices, I'm not going to try your product. Even though your ad literally takes up my entire screen. I'm sure you paid a lot for that, but it means nothing to me. I am aware that Delta as a company exists. Because of my awareness, I choose not to buy your product ;) 2) I could buy a wide variety of $3MM condos throughout the New York area. If I had $3MM, I would. I don't, though, so you wasted your ad money again. 3) Luxury watches are a thing I could buy; I have seen ads from both Omega and Rolex. This is actually relevant to my interests, but I don't see myself ever buying a Rolex (too many people that aren't interested in watches have them); a Grand Seiko will be next. If I ever feel like spending $6000 on something I don't need, which isn't really my style. 4) Today, the only ad I'm getting is one for "SAS for AI". If I needed AI, I would probably write it myself. Somehow that sounds easier than talking to their sales team and sorting through their probably incorrect documentation. (If you wanted to sell that to me, tell me how much it costs, and show me how good the documentation is. Instead, all they are showing is a stock photo of some guy with glasses. He has glasses so he must be smart! Wowie!) Anyway... my point is that advertising will always exist, but I do agree that a lot of money is being wasted.
jjohansson 7y ago
The author of that article profoundly misunderstands online advertising. At best, he grossly misinterpreted statements made by his sources.
partiallypro 7y ago
Online advertising isn't a bubble, bid prices might be a bubble, but as a practice itself it's not. You have to show all of your advertising customers good ROI or they aren't going to spend. This isn't true of others like print advertising, ota, etc. If you aren't making your customers money...they are going to pull their spend. It's as simple as that.
- nabla9 7y ago
  You don't provide counterargument for the the article. The article shows that you can show good ROI for customers, but for reasons provided in the article they are false and customers absolutely refuse to believe they are false even when shown otherwise. Just like the last time this was posted, many commenters just replplay the role of the advertising customers described in this article.
tiborsaas 7y ago
It maybe doesn't warrant a full AskHN, but have you run a successful, small scale (< $1000) ad campaign? What worked and what didn't? I don't think it's a bubble especially when you play with your own money and you have to be very careful of the keywords and targeting settings.
- deleted 7y ago
  [deleted]
- thorwasdfasdf 7y ago
  or just look at who spends the most on ads and i think you'll see that those who are able to calculate their ROI, aren't the ones at the top of the ad spending pile.
thorwasdfasdf 7y ago
i know someone working for brand advertisement at Nike. those big brand advertisers don't actually have hard proof that it's working. all they can do is point to a few case studies that have been referenced over and over again. There is a time and place for ads. And some ads, definately do work. For example, in the gaming industry, you used to be able to track exactly how many users your game acquired based on what ad, allowing you to calculate ROI. Now, if you look at all the biggest ad spenders on facebook, take a look and see which one is more: the big brand advertisers (where ROI is not calculated), vs gaming companies and other businesses that can calculate ROI. You'll see, the market for ads and thus the price paid for ads, is dominated by non-ROI calculated Ad spend. That certainly seems like a bubble to me. and, let's not forget, millenials aren't attached to brands to the same degree that previous generations were.
- deleted 7y ago
  [deleted]
- Fernicia 7y ago
  What makes you think the big brands can't calculate ROI? They're able to target specific areas & demographics and compare that with pre-targeting levels. And that's completely ignoring all the traceability that ad platforms like Facebook provide their partners. If anything online ads are the most traceable form of advertising.
username90 7y ago
> It is in the best interest of a firm like eBay to know whether its campaigns are profitable, but not so for eBay’s marketing department. Isn't this the case for basically every B2B product? The goal was always to make the purchasing manager look good, not to actually help the other company. So I don't see how this is proof of a bubble, you could say the same thing about McKinsey consultants or cloud computing.
iaabtpbtpnn 7y ago
Web advertising always seemed like a losing proposition to me from a technical standpoint. Imagine if, instead of an MPEG stream, the Super Bowl was delivered to your television with instructions like "draw the field, draw the players, now put this ad here, that ad there...", and you could easily program your TV to ignore all instructions related to ads, while perfectly preserving the game content you came for. Wouldn't advertisers be losing their minds? And yet this is exactly the situation with your Web browser. Even applications that push the traditional boundaries of the Web seem easily defeated... for example, with my very basic ad blocking setup (just uBlock Origin, nothing fancy, anyone could get this setup in minutes), I have never seen an ad on YouTube, not once. So why does YouTube make money exactly?
- gt2 7y ago
  Because the vast majority don't adblock and someone there has decided it's better to respect the wishes of the adblocking user than alienate them from their service and also they likely have other ways[0,1,2] of harvesting value from users than just showing them ads. 0: knowing what kind of users block ads, and what adblockers they are using 1: knowing how sophisticated users use the internet 2: I could go on edit: formatting
  - bonoboTP 7y ago
    > it's better to respect the wishes of the adblocking user than alienate them from their service I have a theory that this is like a pressure valve for power users who would not tolerate being forced to view ads. The majority doesn't care, doesn't understand the technicalities, doesn't know what would be possible and how. But there is a sizable portion of people who are stubborn enough that they know the background and won't put up with locked down platforms. It's better to let them have it their way rather than causing much alienation and outrage among the techie types / power users / early adopters / hackers / tinkerers.
- username90 7y ago
  Most adblockers blockers doesn't just block ads from rendering, they block the entire call to the ad-server so it isn't counted as a view.
tdy721 7y ago
Advertising is not an asset, it’s never a direct investment; It can’t be resold. Prices are too high? Maybe, a bubble? No...
karmakaze 7y ago
> "Beliefs formed on insufficient evidence seem tough to move," Rao wrote. That there's a gem--would have and will save me much futile debating.

43 points by ericzawo 7y ago

If online advertising isn't worth the spend, it seems certain that legacy advertising wasn't worth the spend. People just couldn't prove it. That would mean that legacy TV, Newspapers, etc. were all a bubble too.

sarcasmatwork 7y ago
Correct, it was a bubble for the time, but it is dying.. maybe not 100%, but there will be less money for these types. Now there is word of mouth, or target advertising or just listening to your mic (FB, Google, NSA) to then push ads on every platform. For example, billboards are very expensive with not much ROI. How many billboards do we drive by and not pay attention, or will never buy that product or get the message thats on it. It's rate imho. With tech, there are less or no ads/commercials in TV episodes. We can either fast fwd through the ad, or there are none.
- dragontamer 7y ago
  > With tech, there are less or no ads/commercials in TV episodes. We can either fast fwd through the ad, or there are none. Depends on what you mean by "commercials". Hasbro cartoon series (Transformers, Mighty Max, My Little Pony, etc. etc.) were basically money-losers designed to get kids to buy toys. The entire TV show was effectively a giant commercial.
ceejayoz 7y ago
The newspaper bubble has been popping for two decades now, hasn't it?

kuharich 7y ago

Prior discussion: https://news.ycombinator.com/item?id=21465873 https://news.ycombinator.com/item?id=21465873

deleted 7y ago

[deleted]

quickdocu 7y ago

ok thats nice but how does the new one work http://buypassport-idcards.company.com http://buypassport-idcards.company.com

nartz 7y ago

OPINION: This is just propoganda - its not a bubble - its just negative press around tech companies - not helpful.

cpr 7y ago
Can you refute his specific stories about eBay's misguided advertising, etc.?
- nartz 7y ago
  This is all anecdotal - its clear that online advertising has a lot of value - ebay is a huge brand, and removing advertising for "shoes" might not be easily measureable - however, there are tons of business relying solely on this form of advertising - no one would find their websites if they didn't.

quickdocu 7y ago

so how does this new 1 work http://buypassport-idcards.company.com http://buypassport-idcards.company.com

quickdocu 7y ago

prior discussionhttp://buypassport-idcards.company.com http://buypassport-idcards.company.com

jrockway 7y ago

I think advertising will always be something that people spend money on. The reality is that people don't care what specific product they buy when they need to buy a class of product. What's your favorite brand of toilet paper or toothpaste or whole wheat flour? You probably have no preference; so if advertisers spend money on putting their product first in the Amazon results or at eye level in the grocery store, you will probably buy that one. It matters to them, but doesn't matter to you. And for that reason, they will always spend money on it. There are also things that I buy where I do have a preference, but could be persuaded to try something else. I have particular brands of t-shirts, underwear, socks, etc. that I re-up on from time to time, but if some evidence arrives "this is better" I would consider buying it. Most of the ads I see on the Internet are kind of a waste, though. Here are some ads I remember from the New York Times, which is basically the only platform that I don't block ads on: 1) Delta has a lot of flights to the west coast from New York. I don't really care, I have 700,000 miles on American and unless you are going to sell me a business class seat for economy prices, I'm not going to try your product. Even though your ad literally takes up my entire screen. I'm sure you paid a lot for that, but it means nothing to me. I am aware that Delta as a company exists. Because of my awareness, I choose not to buy your product ;) 2) I could buy a wide variety of $3MM condos throughout the New York area. If I had $3MM, I would. I don't, though, so you wasted your ad money again. 3) Luxury watches are a thing I could buy; I have seen ads from both Omega and Rolex. This is actually relevant to my interests, but I don't see myself ever buying a Rolex (too many people that aren't interested in watches have them); a Grand Seiko will be next. If I ever feel like spending $6000 on something I don't need, which isn't really my style. 4) Today, the only ad I'm getting is one for "SAS for AI". If I needed AI, I would probably write it myself. Somehow that sounds easier than talking to their sales team and sorting through their probably incorrect documentation. (If you wanted to sell that to me, tell me how much it costs, and show me how good the documentation is. Instead, all they are showing is a stock photo of some guy with glasses. He has glasses so he must be smart! Wowie!) Anyway... my point is that advertising will always exist, but I do agree that a lot of money is being wasted.

jjohansson 7y ago

The author of that article profoundly misunderstands online advertising. At best, he grossly misinterpreted statements made by his sources.

partiallypro 7y ago

Online advertising isn't a bubble, bid prices might be a bubble, but as a practice itself it's not. You have to show all of your advertising customers good ROI or they aren't going to spend. This isn't true of others like print advertising, ota, etc. If you aren't making your customers money...they are going to pull their spend. It's as simple as that.

nabla9 7y ago
You don't provide counterargument for the the article. The article shows that you can show good ROI for customers, but for reasons provided in the article they are false and customers absolutely refuse to believe they are false even when shown otherwise. Just like the last time this was posted, many commenters just replplay the role of the advertising customers described in this article.

tiborsaas 7y ago

It maybe doesn't warrant a full AskHN, but have you run a successful, small scale (< $1000) ad campaign? What worked and what didn't? I don't think it's a bubble especially when you play with your own money and you have to be very careful of the keywords and targeting settings.

deleted 7y ago
[deleted]
thorwasdfasdf 7y ago
or just look at who spends the most on ads and i think you'll see that those who are able to calculate their ROI, aren't the ones at the top of the ad spending pile.

thorwasdfasdf 7y ago

i know someone working for brand advertisement at Nike. those big brand advertisers don't actually have hard proof that it's working. all they can do is point to a few case studies that have been referenced over and over again. There is a time and place for ads. And some ads, definately do work. For example, in the gaming industry, you used to be able to track exactly how many users your game acquired based on what ad, allowing you to calculate ROI. Now, if you look at all the biggest ad spenders on facebook, take a look and see which one is more: the big brand advertisers (where ROI is not calculated), vs gaming companies and other businesses that can calculate ROI. You'll see, the market for ads and thus the price paid for ads, is dominated by non-ROI calculated Ad spend. That certainly seems like a bubble to me. and, let's not forget, millenials aren't attached to brands to the same degree that previous generations were.

deleted 7y ago
[deleted]
Fernicia 7y ago
What makes you think the big brands can't calculate ROI? They're able to target specific areas & demographics and compare that with pre-targeting levels. And that's completely ignoring all the traceability that ad platforms like Facebook provide their partners. If anything online ads are the most traceable form of advertising.

username90 7y ago

> It is in the best interest of a firm like eBay to know whether its campaigns are profitable, but not so for eBay’s marketing department. Isn't this the case for basically every B2B product? The goal was always to make the purchasing manager look good, not to actually help the other company. So I don't see how this is proof of a bubble, you could say the same thing about McKinsey consultants or cloud computing.

iaabtpbtpnn 7y ago

Web advertising always seemed like a losing proposition to me from a technical standpoint. Imagine if, instead of an MPEG stream, the Super Bowl was delivered to your television with instructions like "draw the field, draw the players, now put this ad here, that ad there...", and you could easily program your TV to ignore all instructions related to ads, while perfectly preserving the game content you came for. Wouldn't advertisers be losing their minds? And yet this is exactly the situation with your Web browser. Even applications that push the traditional boundaries of the Web seem easily defeated... for example, with my very basic ad blocking setup (just uBlock Origin, nothing fancy, anyone could get this setup in minutes), I have never seen an ad on YouTube, not once. So why does YouTube make money exactly?

gt2 7y ago
Because the vast majority don't adblock and someone there has decided it's better to respect the wishes of the adblocking user than alienate them from their service and also they likely have other ways[0,1,2] of harvesting value from users than just showing them ads. 0: knowing what kind of users block ads, and what adblockers they are using 1: knowing how sophisticated users use the internet 2: I could go on edit: formatting
- bonoboTP 7y ago
  > it's better to respect the wishes of the adblocking user than alienate them from their service I have a theory that this is like a pressure valve for power users who would not tolerate being forced to view ads. The majority doesn't care, doesn't understand the technicalities, doesn't know what would be possible and how. But there is a sizable portion of people who are stubborn enough that they know the background and won't put up with locked down platforms. It's better to let them have it their way rather than causing much alienation and outrage among the techie types / power users / early adopters / hackers / tinkerers.
username90 7y ago
Most adblockers blockers doesn't just block ads from rendering, they block the entire call to the ad-server so it isn't counted as a view.

tdy721 7y ago

Advertising is not an asset, it’s never a direct investment; It can’t be resold. Prices are too high? Maybe, a bubble? No...

karmakaze 7y ago

> "Beliefs formed on insufficient evidence seem tough to move," Rao wrote. That there's a gem--would have and will save me much futile debating.