7 ms·

I've noticed HN often has two opinions about advertising depending on the day of the week: 1) It's an unchecked, all-powerful evil, making people buy or believ

I've noticed HN often has two opinions about advertising depending on the day of the week: 1) It's an unchecked, all-powerful evil, making people buy or believe in things they don't want or need by hoarding their data or 2) It's a giant ineffective scam that stupid companies who aren't led by engineers waste VC money on The two are diametrically opposed, yet, I've seen the same person argue #1 on Monday when it fits the narrative, and then on Tuesday start arguing #2--blissfully unaware of how both cannot be true at the same time. Could it be, that both 1 and 2 are wrong, and that advertising spend is simply reduced during recessions in reaction to the reduction in spending by consumers? Why pay money to acquire customers when the customers aren't willing to spend money on new products?

DHPersonal 7y ago
I think most people are uncomfortable to admit how effective advertising really is on every person, so as a result, they think up multiple reasons to protest its existence, even if they don’t always make sense as a whole. My opinion on this apparent contradiction is that some who say advertising research is dangerous also believe it is inherently ineffective — that the intrusive advertising methods used now are as helpful as general surface-level research on customers — but it’s the treasure trove of personal information that is dangerous to us all, as it is readily available for abuse.
ethbro 7y ago
Maybe it's an unchecked, all-powerful evil that hoards people's data, ineffective at making people buy or believe in things they don't want or need?
jonny_eh 7y ago
> I've seen the same person argue Really? You remember who says what on HN?
- nostrademons 7y ago
  Comment histories are public. It's not hard to look at their /threads page and see what they were saying a day ago.
xabotage 7y ago
I find myself generally unaffected by advertising and would normally fall into the "waste of money" camp, until I started hanging out more with non-engineering types. Seeing them made me realize A) advertising does work, at least for a critical mass of people, and B) advertising doesn't take away their ability to judge a product, no matter how well targeted it is. I've even found they have a superior ability to judge products and services than I do at times because they intuitively jive with the marketing in a way that my engineering brain doesn't (they can piece together subjective qualities about a product/service being marketed to them, and I just think "show me the specs and price." Both approaches have benefits and downsides).
- codexon 7y ago
  Sometimes it isn't as nefarious as convincing people to buy a product they wouldn't normally buy, and simply just showing the right people that your product exists.
  - roywiggins 7y ago
    I bought precisely one item from a Facebook ad, because it was the exact kind of item I had been looking for and failed to find. I was really pleased. But it happened one time. Now I get ads for chicken feet sellers on Alibaba.
- timClicks 7y ago
  What's interesting in that statement to me is that you don't consider the spec sheet to be advertising. Therefore, you feel that you're "unaffected" by it.
- scarface74 7y ago
  I find podcast advertising be very effective and targeted without being scammy. I would have never heard about Backblaze, Hover (instead of GoDaddy), Warby Parker, SquareSpace, Linode, Eero, or probably SquareTrade if it weren’t for podcast ads. I’ve used or recommended all of those services. I also find Overcast (podcast player) ads very useful and have discovered a lot of great podcasts because of it. Marco Arment creates his own ad network so he could control both the content and he wouldn’t have any mystery meat binary blob advertising SDK.
AnthonyMouse 7y ago
It's possible for both 1 and 2 to be right. Suppose that if you're peddling cheap junk and snake oil, advertising is effective, because nobody will have heard of your product by word of mouth (no one would recommend it and previous victims are ashamed to admit being suckered), but if you spam enough people you'll reach enough suckers to exceed the advertising expense. But if you're peddling a popular and quality product, everyone has already heard of it and additional advertising has low marginal utility because you were going to get most of the sales anyway. This furthermore doesn't get you out of the prisoner's dilemma, because even if buying advertising is only break-even rather than profitable, your competitor is doing it so you have to do it too or they gain a volume advantage over you and use that to kill you on unit pricing. But then you all do it and all that happens is that everyone pays money to cancel each other out.
- friedman23 7y ago
  It's amazing the lengths people go to reduce things into two dimensions. popular and quality product vs cheap junk and snake oil (and presumable unpopular) An honest person would note all possible combinations in their simplified model of businesses seeking advertising 1. popular products with bad quality 2. popular products with good quality 3. unpopular (or unknown) products with good quality 4. unpopular products with bad quality And of course the real world is more complex than this. your analysis is bad and wrong.
  - wdevanny 7y ago
    The parent comment was presenting one possible reason to explain the grandparent's observation. They were not trying to perfectly describe the real world, but only to point out that two seemingly conflicting points of view can be reconciled. I think the parent probably wrote their comment starting with the same thought as you: that the real world is more complex than a simply stated opinion. Saying "your analysis is bad and wrong." comes off as dismissive and I think you should read the HN Guidelines.
    - arkanciscan 7y ago
roywiggins 7y ago
They absolutely could both be true. Maybe 90% of advertising doesn't work, but the remaining 10% does, but nobody can tell which. It's a lemon market.
robocat 7y ago
> the two are diametrically opposed Your (1) is effective advertising that works, and your (2) is ineffective advertising that is a waste of money. It is perfectly OK to know that both exist, and to argue against both.
searchableguy 7y ago
Not sure if this is correct but my hypothesis is that the difference between those threads is that in A. They are thinking of what they consider an average user (most likely stupid, blissfully unaware of tracking and how companies are controlling him) whilst using ad blockers themselves or relative strong measures to avoid tracking. B. They are thinking of themselves as the customer to some extent and knowing that they don't ever click on ads as often, it's most likely wasted money. Again, I am not completely sure but it feels like the person is thinking of different subject in A and B when analysing. C. It could be that the plan is to make Google look evil in both cases. By robbing both you and companies out of their money and data.
mywittyname 7y ago
Well, we are a collection of people with our own independent thoughts and feelings on subjects, so it shouldn't be a surprise that some people feel the opposite of others are a variety of subjects. Though, to be honest, I don't think I've heard #2. I think any rational person understands that advertising has some degree of effectiveness. After all, many bright minds from a variety of hard sciences have spent decades of their lives, and extraordinary sums of money studying human behavior for the explicit purpose of selling more shit. Many of the largest companies in the world are advertising companies; before Google and Facebook there was the TV and Radio giants, who were massive, in spite of pretty serious regulations. None of this would have happened if advertising wasn't effective. At some point in time, people would have realized it didn't work and spent their money elsewhere. There are two big issues that I see: 1) More views have driven down bids for ad views. The ad industry is largely driven by companies bidding for views, so without a large influx of cash, the spike in views was going to depress ad impression prices. 2) Consumers have less discretionary money to spend, even if they wanted to, so the ROI on each view/click is going down. Each of those alone would be cause for concern, but combined, they do pose a significant issue for Google, Facebook, and smaller content creators.
- TeMPOraL 7y ago
  I sometimes say something vaguely like #2. And it doesn't conflict with #1. The argument is this: - A lot of advertising is effective, and a lot the effectiveness boils down to lies, manipulation and general dishonesty. - Ad attribution - i.e. tracing how much money spent on what advertising resulted in how much profit and when - is a hard problem. It's easy to make mistakes with it, and it's also easy to lie and not get caught. - Most people involved aren't exactly experts in statistics. That's especially true for small businesses, which don't have money or institutional expertise to hire talent just to evaluate their ad spend. - Which means people trust they aren't being bullshitted by the very industry that specializes in lies and manipulation. I've seen this play out in real life myself; I vividly remember working next desk to social media marketers who were clueless at maths. They'd take the numbers and graphs from Facebook's panel, write up stories that made these numbers always sound like everything is going perfectly, and send such reports to the customers who were even more mathematically clueless, and thus incapable of verifying whether the numbers and the story presented add up. The way I see it: some advertising is effective sometimes, but you don't know which one is effective and when, it's mighty hard to figure that out, and the advertisers have every incentive to confuse the issue for you. (Note that they'll also happily confuse the issue for themselves, too. The industry consists of a lot of players building their products and services on top of each others' products and services; there's a lot of competition happening, and there's plenty of incentive to use the same advertising tactics within the industry as outside.)
dntbnmpls 7y ago
It's even worse when it's the same person pushing contradictory narratives. The exact same person will write 1 in one thread and 2 in another thread. 1. "Online ads are ineffective and don't work. Online ads are a waste of money". 2. "The russians bought Trump's election by spending $50K on facebook ads". It's hypocrisy based on agenda. You might have also noticed that when someone they disagree with gets censored, they claim "google/facebook/etc" are private companies. When someone they agree with gets censored, we cannot allow tech monopolies to drive public discourse. There was a recent submission where france ruled that google must display and pay for news headlines. The same people saying "nobody has a right to google's platform since they are a private company" were vociferously defending france forcing google to carry news and pay for it. No doubt many of them were hypocritical news industry workers. But that's human nature, we are all selfish.
modsWork4appl 7y ago
Marketing is all powerful evil. Even if ads don't work. Some companies are better than others. Instead of "buy my product" they teach consumers they look cool if they buy. We wouldn't be dealing with Apple's BS if people only cared about quality.
jariel 7y ago
Both 1 and 2 are correct. We live in a consumption-driven society mostly driven by aspiration, not need. We are 'induced' into keeping up with the Joneses to a very great extent. This is not a conspiracy theory. Much of ad spend is a waste because its effectiveness cannot be measured. Marketers will tell you "I would cut my budget in 1/2 no problem I just don't know which 1/2". And some companies will spend ads on you from you're a kid until you're an adult hoping to lure you into a few purchases (Ford Trucks, BMW etc.).
kbos87 7y ago
Thank you. The reality is that in 2020 the people buying the ads usually (not always, but more often than not) are expected to account for the return on investment. There’s a little bit of a holier than thou attitude on HN - but if you go deep enough and talk to the people responsible for these budgets, they aren’t stupid and what they are doing is very much scrutinized.
- TeMPOraL 7y ago
  > if you go deep enough and talk to the people responsible for these budgets, they aren’t stupid and what they are doing is very much scrutinized In my experience, it's not that they're stupid - but they have neither the required math skills, nor the visibility into the whole pipeline, to be able to correctly evaluate the RoI, so they trust their providers in the ad industry a lot. So the correctness of their calculations depends a lot on the virtue and honesty of people working in the industry specializing in lies and manipulation when placed in front of an easy opportunity to make extra profit by being dishonest.
ac29 7y ago
I think you've intentionally been hyperbolic to make two nuanced positions sound like complete opposites. Here's my take on the two sides here: 1) It makes me uncomfortable that companies can track me online and use info that to target ads (or whatever their business model thinks it needs my info for). There are things about me like my location, identity and politics that are personal and I want to be in control of, not tokens to be sold. 2) Online advertising returns much less than $1 in profit for every $1 spent, so whats the point? Only big tech companies are benefiting from it. The fact that advertisers are pulling back during this economic contraction only proves this - if $1 in ad spending bought you >$1, they'd keep up their spending. Not everyone will agree with me, but for me, both of those are true.
- rahimnathwani 7y ago
  "Online advertising returns much less than $1 in profit for every $1 spent" Are you saying (A) no single advertiser increases their profits by more than the amount spent on advertising, (B) that, in aggregate, the amount spent on advertising is less than the additional profit earned by all advertisers, or (C) something else? It's unlikely that (A) is true. It's possible that (B) is true but that any individual advertiser would be net harmed if they were to stop advertising (because they can't stop their competitors from advertising). "The fact that advertisers are pulling back during this economic contraction only proves this - if $1 in ad spending bought you >$1, they'd keep up their spending." It doesn't prove that. Perhaps they are pulling their spending because: - they're not selling any more due to social distancing (theatre tickets? massages? dating services?) - they're not selling any more due to supply constraints or inability to operate their business's physical locations - the stuff they're selling is stuff people cut in a downturn Just because a piece of advertising isn't worthwhile when no one can go out and many people have just lost their jobs, that doesn't mean it wasn't worthwhile before.
  - ac29 7y ago
    C. I think its impossible to prove that any given $1 of advertising earns back $1 in profit for any sufficiently complex advertiser. Targeted ads for largely online companies: If your customer sees an advertisement on Facebook and YouTube, and sees a few sponsored search results on Bing, then opens an ad in an Amazon mobile app six months later and converts, which ad was effective? Which was priced right? Lets assume you can 100% correlate all of this activity. Can you justify spending $X on platform Y will return >$X? Brand awareness ads for largely offline companies: Your products are largely sold at retail, and you are a large multinational company like Coca Cola or Nestle. Which of your ad campaigns this quarter drove sales? Can you justify spending $X on platform Y will return >$X?
K0SM0S 7y ago
Please accept this physicalist's take: - Advertising as a first-principle works, because our biology is amenable to familiarity. sheer repetition ⇒ familiarity ⇒ positive bias ("things I know / like / trust / ...", common pattern) There might be more to it, but that's enough, and proved enough times in many a scientific study afaik. - Applying the technique to a real-world problem has varying levels of efficiency; whether it's the wrong solution or badly executed. Heed this naive comparison: not all bridges are good, and some are scams. But there's no question whether building bridges is useful in the first place. The question is and forever will be, what should be the rules for making good enough bridges, safe enough? Advertising as a domain and market is not a special snowflake in most regards. It's actually boringly common, dare I say predictable. ____ Where it gets tricky. Where first-principles aren't enough because complexity is at a whole other level: advertising is the primary revenue for a bunch of industries, most notably the press (the media) which is otherwise considered "the fourth pillar of democracy", i.e. that quality of information in a democracy is as necessary as government, congress, and justice, the 3 branches of the republic ideal form. How do you reconcile that the biggest "influencers" of public opinion, the press, is itself mostly influenced financially by the most interest, biased, self-tauting side of the entire economy? Wherein not rational engineers, not sane financiers, not level-headed CEOs or even just Jane and John your co-workers next door have a voice, not even sales who know that lying and deceiving is not the way to build a sustainable business... but marketing, in other words those whose job is to create a Hollywood-fiction of fabled greatness... it's not lying, it never was, it's been elevated as fiction —see: artistic awards for the best ads, superbowl hype, and the actual real cinematographic value of some of that, hands down. Nevermind that the products are asking for real money, however. And then we wonder why the media has become such a theatrical ongoing masterpiece of sensationalist storytelling. Well, lines were crossed. Why infotainment has become such a norm that it is now capable of higher quality than "editorialized" (read: advertiser-leashed) newsrooms. “No, Jane, we can't say that. We'd lose ad money, you don't want us to fire people, do you?” The sheer complexity of that makes me want to duck in quantum machine learning and call it a day on politics. I don't have a perfect solution, I can only see red lines in law and a certain sense of ethics, like we value life, we should value information. In short, bug is in human code, thus fix as well.
refurb 7y ago
Considering the fact that budgets, including advertising budgets, then to be a percentage of expected revenue, I’d say your probably right
martin_bech 7y ago
Both are actually correct. The point of beeing ineffectice is price.. add pricing is so high for most searches/placements that it will cost you 100usd in adds to sell a product with 80usd in margin. Companies will then rationalise this, with an assumption that the “lifetime” value of the customer is > 100usd, or you are paying to gain marketshare etc etc.
ethanwillis 7y ago
To answer your last question. I work in adtech, sort of. One of the reasons you'd want to pay to acquire customers right now is firstly dependent on your product. As an example, lets say your product has a conversion time of 6-12 months. If you strike right now and have the right content to keep people engaged over that time period while theyre in quarantine they'd be ready to "convert" right near the end of some of the most stringent quarantine restrictions. If you don't spend, then you just burned an entire year's worth of leads in your funnel.
randomsearch 7y ago
Na, you’ve misinterpreted what people say. They aren’t so much concerned by “people buying what they don’t need” - hardy a major concern of most hackers - they’re concerned about invasive data tracking being used to target ads. So I think you’ve gotten the first one wrong. And there’s no contradiction with the second in that case.
ashtonkem 7y ago
A minor tweak makes these two statements work together: 1) The ad industry is insatiable for customer data, and is willing to violate every last persons privacy to get it 2) The utility of the advertising industry’s targeted models is suspect at best.

DHPersonal 7y ago

I think most people are uncomfortable to admit how effective advertising really is on every person, so as a result, they think up multiple reasons to protest its existence, even if they don’t always make sense as a whole. My opinion on this apparent contradiction is that some who say advertising research is dangerous also believe it is inherently ineffective — that the intrusive advertising methods used now are as helpful as general surface-level research on customers — but it’s the treasure trove of personal information that is dangerous to us all, as it is readily available for abuse.

ethbro 7y ago

Maybe it's an unchecked, all-powerful evil that hoards people's data, ineffective at making people buy or believe in things they don't want or need?

jonny_eh 7y ago

> I've seen the same person argue Really? You remember who says what on HN?

nostrademons 7y ago
Comment histories are public. It's not hard to look at their /threads page and see what they were saying a day ago.

xabotage 7y ago

I find myself generally unaffected by advertising and would normally fall into the "waste of money" camp, until I started hanging out more with non-engineering types. Seeing them made me realize A) advertising does work, at least for a critical mass of people, and B) advertising doesn't take away their ability to judge a product, no matter how well targeted it is. I've even found they have a superior ability to judge products and services than I do at times because they intuitively jive with the marketing in a way that my engineering brain doesn't (they can piece together subjective qualities about a product/service being marketed to them, and I just think "show me the specs and price." Both approaches have benefits and downsides).

codexon 7y ago
Sometimes it isn't as nefarious as convincing people to buy a product they wouldn't normally buy, and simply just showing the right people that your product exists.
- roywiggins 7y ago
  I bought precisely one item from a Facebook ad, because it was the exact kind of item I had been looking for and failed to find. I was really pleased. But it happened one time. Now I get ads for chicken feet sellers on Alibaba.
timClicks 7y ago
What's interesting in that statement to me is that you don't consider the spec sheet to be advertising. Therefore, you feel that you're "unaffected" by it.
scarface74 7y ago
I find podcast advertising be very effective and targeted without being scammy. I would have never heard about Backblaze, Hover (instead of GoDaddy), Warby Parker, SquareSpace, Linode, Eero, or probably SquareTrade if it weren’t for podcast ads. I’ve used or recommended all of those services. I also find Overcast (podcast player) ads very useful and have discovered a lot of great podcasts because of it. Marco Arment creates his own ad network so he could control both the content and he wouldn’t have any mystery meat binary blob advertising SDK.

AnthonyMouse 7y ago

It's possible for both 1 and 2 to be right. Suppose that if you're peddling cheap junk and snake oil, advertising is effective, because nobody will have heard of your product by word of mouth (no one would recommend it and previous victims are ashamed to admit being suckered), but if you spam enough people you'll reach enough suckers to exceed the advertising expense. But if you're peddling a popular and quality product, everyone has already heard of it and additional advertising has low marginal utility because you were going to get most of the sales anyway. This furthermore doesn't get you out of the prisoner's dilemma, because even if buying advertising is only break-even rather than profitable, your competitor is doing it so you have to do it too or they gain a volume advantage over you and use that to kill you on unit pricing. But then you all do it and all that happens is that everyone pays money to cancel each other out.

friedman23 7y ago
It's amazing the lengths people go to reduce things into two dimensions. popular and quality product vs cheap junk and snake oil (and presumable unpopular) An honest person would note all possible combinations in their simplified model of businesses seeking advertising 1. popular products with bad quality 2. popular products with good quality 3. unpopular (or unknown) products with good quality 4. unpopular products with bad quality And of course the real world is more complex than this. your analysis is bad and wrong.
- wdevanny 7y ago
  The parent comment was presenting one possible reason to explain the grandparent's observation. They were not trying to perfectly describe the real world, but only to point out that two seemingly conflicting points of view can be reconciled. I think the parent probably wrote their comment starting with the same thought as you: that the real world is more complex than a simply stated opinion. Saying "your analysis is bad and wrong." comes off as dismissive and I think you should read the HN Guidelines.
  - arkanciscan 7y ago

roywiggins 7y ago

They absolutely could both be true. Maybe 90% of advertising doesn't work, but the remaining 10% does, but nobody can tell which. It's a lemon market.

robocat 7y ago

> the two are diametrically opposed Your (1) is effective advertising that works, and your (2) is ineffective advertising that is a waste of money. It is perfectly OK to know that both exist, and to argue against both.

searchableguy 7y ago

Not sure if this is correct but my hypothesis is that the difference between those threads is that in A. They are thinking of what they consider an average user (most likely stupid, blissfully unaware of tracking and how companies are controlling him) whilst using ad blockers themselves or relative strong measures to avoid tracking. B. They are thinking of themselves as the customer to some extent and knowing that they don't ever click on ads as often, it's most likely wasted money. Again, I am not completely sure but it feels like the person is thinking of different subject in A and B when analysing. C. It could be that the plan is to make Google look evil in both cases. By robbing both you and companies out of their money and data.

mywittyname 7y ago

Well, we are a collection of people with our own independent thoughts and feelings on subjects, so it shouldn't be a surprise that some people feel the opposite of others are a variety of subjects. Though, to be honest, I don't think I've heard #2. I think any rational person understands that advertising has some degree of effectiveness. After all, many bright minds from a variety of hard sciences have spent decades of their lives, and extraordinary sums of money studying human behavior for the explicit purpose of selling more shit. Many of the largest companies in the world are advertising companies; before Google and Facebook there was the TV and Radio giants, who were massive, in spite of pretty serious regulations. None of this would have happened if advertising wasn't effective. At some point in time, people would have realized it didn't work and spent their money elsewhere. There are two big issues that I see: 1) More views have driven down bids for ad views. The ad industry is largely driven by companies bidding for views, so without a large influx of cash, the spike in views was going to depress ad impression prices. 2) Consumers have less discretionary money to spend, even if they wanted to, so the ROI on each view/click is going down. Each of those alone would be cause for concern, but combined, they do pose a significant issue for Google, Facebook, and smaller content creators.

TeMPOraL 7y ago
I sometimes say something vaguely like #2. And it doesn't conflict with #1. The argument is this: - A lot of advertising is effective, and a lot the effectiveness boils down to lies, manipulation and general dishonesty. - Ad attribution - i.e. tracing how much money spent on what advertising resulted in how much profit and when - is a hard problem. It's easy to make mistakes with it, and it's also easy to lie and not get caught. - Most people involved aren't exactly experts in statistics. That's especially true for small businesses, which don't have money or institutional expertise to hire talent just to evaluate their ad spend. - Which means people trust they aren't being bullshitted by the very industry that specializes in lies and manipulation. I've seen this play out in real life myself; I vividly remember working next desk to social media marketers who were clueless at maths. They'd take the numbers and graphs from Facebook's panel, write up stories that made these numbers always sound like everything is going perfectly, and send such reports to the customers who were even more mathematically clueless, and thus incapable of verifying whether the numbers and the story presented add up. The way I see it: some advertising is effective sometimes, but you don't know which one is effective and when, it's mighty hard to figure that out, and the advertisers have every incentive to confuse the issue for you. (Note that they'll also happily confuse the issue for themselves, too. The industry consists of a lot of players building their products and services on top of each others' products and services; there's a lot of competition happening, and there's plenty of incentive to use the same advertising tactics within the industry as outside.)

dntbnmpls 7y ago

It's even worse when it's the same person pushing contradictory narratives. The exact same person will write 1 in one thread and 2 in another thread. 1. "Online ads are ineffective and don't work. Online ads are a waste of money". 2. "The russians bought Trump's election by spending $50K on facebook ads". It's hypocrisy based on agenda. You might have also noticed that when someone they disagree with gets censored, they claim "google/facebook/etc" are private companies. When someone they agree with gets censored, we cannot allow tech monopolies to drive public discourse. There was a recent submission where france ruled that google must display and pay for news headlines. The same people saying "nobody has a right to google's platform since they are a private company" were vociferously defending france forcing google to carry news and pay for it. No doubt many of them were hypocritical news industry workers. But that's human nature, we are all selfish.

modsWork4appl 7y ago

Marketing is all powerful evil. Even if ads don't work. Some companies are better than others. Instead of "buy my product" they teach consumers they look cool if they buy. We wouldn't be dealing with Apple's BS if people only cared about quality.

jariel 7y ago

Both 1 and 2 are correct. We live in a consumption-driven society mostly driven by aspiration, not need. We are 'induced' into keeping up with the Joneses to a very great extent. This is not a conspiracy theory. Much of ad spend is a waste because its effectiveness cannot be measured. Marketers will tell you "I would cut my budget in 1/2 no problem I just don't know which 1/2". And some companies will spend ads on you from you're a kid until you're an adult hoping to lure you into a few purchases (Ford Trucks, BMW etc.).

kbos87 7y ago

Thank you. The reality is that in 2020 the people buying the ads usually (not always, but more often than not) are expected to account for the return on investment. There’s a little bit of a holier than thou attitude on HN - but if you go deep enough and talk to the people responsible for these budgets, they aren’t stupid and what they are doing is very much scrutinized.

TeMPOraL 7y ago
> if you go deep enough and talk to the people responsible for these budgets, they aren’t stupid and what they are doing is very much scrutinized In my experience, it's not that they're stupid - but they have neither the required math skills, nor the visibility into the whole pipeline, to be able to correctly evaluate the RoI, so they trust their providers in the ad industry a lot. So the correctness of their calculations depends a lot on the virtue and honesty of people working in the industry specializing in lies and manipulation when placed in front of an easy opportunity to make extra profit by being dishonest.

ac29 7y ago

I think you've intentionally been hyperbolic to make two nuanced positions sound like complete opposites. Here's my take on the two sides here: 1) It makes me uncomfortable that companies can track me online and use info that to target ads (or whatever their business model thinks it needs my info for). There are things about me like my location, identity and politics that are personal and I want to be in control of, not tokens to be sold. 2) Online advertising returns much less than $1 in profit for every $1 spent, so whats the point? Only big tech companies are benefiting from it. The fact that advertisers are pulling back during this economic contraction only proves this - if $1 in ad spending bought you >$1, they'd keep up their spending. Not everyone will agree with me, but for me, both of those are true.

rahimnathwani 7y ago
"Online advertising returns much less than $1 in profit for every $1 spent" Are you saying (A) no single advertiser increases their profits by more than the amount spent on advertising, (B) that, in aggregate, the amount spent on advertising is less than the additional profit earned by all advertisers, or (C) something else? It's unlikely that (A) is true. It's possible that (B) is true but that any individual advertiser would be net harmed if they were to stop advertising (because they can't stop their competitors from advertising). "The fact that advertisers are pulling back during this economic contraction only proves this - if $1 in ad spending bought you >$1, they'd keep up their spending." It doesn't prove that. Perhaps they are pulling their spending because: - they're not selling any more due to social distancing (theatre tickets? massages? dating services?) - they're not selling any more due to supply constraints or inability to operate their business's physical locations - the stuff they're selling is stuff people cut in a downturn Just because a piece of advertising isn't worthwhile when no one can go out and many people have just lost their jobs, that doesn't mean it wasn't worthwhile before.
- ac29 7y ago
  C. I think its impossible to prove that any given $1 of advertising earns back $1 in profit for any sufficiently complex advertiser. Targeted ads for largely online companies: If your customer sees an advertisement on Facebook and YouTube, and sees a few sponsored search results on Bing, then opens an ad in an Amazon mobile app six months later and converts, which ad was effective? Which was priced right? Lets assume you can 100% correlate all of this activity. Can you justify spending $X on platform Y will return >$X? Brand awareness ads for largely offline companies: Your products are largely sold at retail, and you are a large multinational company like Coca Cola or Nestle. Which of your ad campaigns this quarter drove sales? Can you justify spending $X on platform Y will return >$X?

K0SM0S 7y ago

Please accept this physicalist's take: - Advertising as a first-principle works, because our biology is amenable to familiarity. sheer repetition ⇒ familiarity ⇒ positive bias ("things I know / like / trust / ...", common pattern) There might be more to it, but that's enough, and proved enough times in many a scientific study afaik. - Applying the technique to a real-world problem has varying levels of efficiency; whether it's the wrong solution or badly executed. Heed this naive comparison: not all bridges are good, and some are scams. But there's no question whether building bridges is useful in the first place. The question is and forever will be, what should be the rules for making good enough bridges, safe enough? Advertising as a domain and market is not a special snowflake in most regards. It's actually boringly common, dare I say predictable. ____ Where it gets tricky. Where first-principles aren't enough because complexity is at a whole other level: advertising is the primary revenue for a bunch of industries, most notably the press (the media) which is otherwise considered "the fourth pillar of democracy", i.e. that quality of information in a democracy is as necessary as government, congress, and justice, the 3 branches of the republic ideal form. How do you reconcile that the biggest "influencers" of public opinion, the press, is itself mostly influenced financially by the most interest, biased, self-tauting side of the entire economy? Wherein not rational engineers, not sane financiers, not level-headed CEOs or even just Jane and John your co-workers next door have a voice, not even sales who know that lying and deceiving is not the way to build a sustainable business... but marketing, in other words those whose job is to create a Hollywood-fiction of fabled greatness... it's not lying, it never was, it's been elevated as fiction —see: artistic awards for the best ads, superbowl hype, and the actual real cinematographic value of some of that, hands down. Nevermind that the products are asking for real money, however. And then we wonder why the media has become such a theatrical ongoing masterpiece of sensationalist storytelling. Well, lines were crossed. Why infotainment has become such a norm that it is now capable of higher quality than "editorialized" (read: advertiser-leashed) newsrooms. “No, Jane, we can't say that. We'd lose ad money, you don't want us to fire people, do you?” The sheer complexity of that makes me want to duck in quantum machine learning and call it a day on politics. I don't have a perfect solution, I can only see red lines in law and a certain sense of ethics, like we value life, we should value information. In short, bug is in human code, thus fix as well.

refurb 7y ago

Considering the fact that budgets, including advertising budgets, then to be a percentage of expected revenue, I’d say your probably right

martin_bech 7y ago

Both are actually correct. The point of beeing ineffectice is price.. add pricing is so high for most searches/placements that it will cost you 100usd in adds to sell a product with 80usd in margin. Companies will then rationalise this, with an assumption that the “lifetime” value of the customer is > 100usd, or you are paying to gain marketshare etc etc.

ethanwillis 7y ago

To answer your last question. I work in adtech, sort of. One of the reasons you'd want to pay to acquire customers right now is firstly dependent on your product. As an example, lets say your product has a conversion time of 6-12 months. If you strike right now and have the right content to keep people engaged over that time period while theyre in quarantine they'd be ready to "convert" right near the end of some of the most stringent quarantine restrictions. If you don't spend, then you just burned an entire year's worth of leads in your funnel.

randomsearch 7y ago

Na, you’ve misinterpreted what people say. They aren’t so much concerned by “people buying what they don’t need” - hardy a major concern of most hackers - they’re concerned about invasive data tracking being used to target ads. So I think you’ve gotten the first one wrong. And there’s no contradiction with the second in that case.

ashtonkem 7y ago

A minor tweak makes these two statements work together: 1) The ad industry is insatiable for customer data, and is willing to violate every last persons privacy to get it 2) The utility of the advertising industry’s targeted models is suspect at best.