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On ads: the fundamental problem with them is that most people don't realize that they are paying for digital content and free social services anyway, albeit ind

by mojuba 6y ago

On ads: the fundamental problem with them is that most people don't realize that they are paying for digital content and free social services anyway, albeit indirectly, since the ad spendings are included in the prices of consumer products. Even if you use an ad blocker you pay for the ads you don't see anyway. In fact the more we use free social platforms and digital content, the more we pay for it from our pockets. On top of that, we also enrich the platforms themselves, that is the middleman. See that $100 billion revenue figure for Google alone? That's also us, the consumer's money. So one opportunity for disruption is I think targeting the middleman, i.e. the platforms. You can offer cheaper ads to the advertisers by being more efficient than Google that burns absurd amounts of money on their mostly awkward and useless "moonshot" projects. I think you can in principle be more efficient than Facebook too, by employing 100x less engineers if you focus on one task and do it well. In other words, the problem of "killing" Google or Facebook doesn't necessarily mean building literally alternatives to their products, but rather by creating more efficient advertisement platforms. Pick whatever method of keeping the users' eyes on the screens and be less greedy, more efficient.

NullPrefix 6y ago
>ad spendings are included in the prices of consumer products No ads and no price haggling are big reasons why Tesla is so popular.
- fakedang 6y ago
  Apple too Also, the lack of options. It's much easier to buy from Apple or Tesla (even though I don't use any Apple products except a Mac Mini), simply because the number of options are less. At this point, I don't know the difference between a Vostro, a Latitude and an XPS.
  - sofixa 6y ago
    I don't know where you live, but in France there are plenty of Apple ads. Some are run by third parties ( e.g. telecoms advertising you can get the latest iPhone with them, mostly in the form of a huge Apple ad with a small logo of the operator actually advertising ) but most are not.
    - yoz-y 6y ago
      Exactly. During holiday season half of ads are for Apple.
- PointyFluff 6y ago
  Doubt.
solatic 6y ago
> most people don't realize that they are paying for digital content and free social services anyway, albeit indirectly, since the ad spendings are included in the prices of consumer products That's a zero-sum argument that's a bit disingenuous. If you make widgets, and it costs you $5 to make a widget, you can sell 10 of them at $20/pop to the consumer for a total profit of 10 * (20-5) = $150. If you spend $100 on advertising, but that advertising helps you sell to 100 consumers, then you can sell them instead for $10/pop and make 100 * (10-5) - 100 = $400 profit, so you make more profit AND cut the price in half, so everyone wins. The problem is that advertising is so unfocused that it has both littered the public space and been unable to prove, in many or most cases, that it actually succeeds in its goal of improving both profits and reducing prices.
- mojuba 6y ago
  I agree, the inefficiency of advertisement might be the main reason for the surplus we are paying (also let's not forget the platform - the middleman). However: > been unable to prove, in many or most cases, that it actually succeeds in its goal of improving both profits and reducing prices Neither has it been able to prove the opposite. The long-term effects of brand awareness are difficult to measure. Anecdotally, I've seen cases when a very expensive billboard didn't move the download figures even by an iota but local people began talking about the company casually and even recognizing some of the employees on the streets, telling them how they like the product.
- bluesign 6y ago
  Actually I don’t agree with zero-sum argument, but your example seems to be equally wrong. Every widget you sell with advertisement is one widget sold less for competitor (or something totally else) Advertisement is not increasing the money consumer can spend totally. So basically you are trying to steal someoneelses share
  - solatic 6y ago
    > Every widget you sell with advertisement is one widget sold less for competitor (or something totally else) Not exactly. It's true that consumers sometimes make choices between competitors, like deciding to go to one fast food chain or another. But oftentimes consumers make a choice about how much money to spend vs save. If a consumer has $500 in discretionary funds, the consumer can decide to buy a simple, no-frills, commoditized "meets-my-needs" product and save the $400 for later. Or the consumer can decide to spring for the ultra-deluxe $500 product and save nothing. Discretionary income is far higher than most people realize. Nobody needs to buy soft drinks, new cars (i.e. instead of a used car), new clothes (instead of sewing up old ones), yet another new video game (instead of a library of millions of older titles that are still as entertaining as they were when they were first released), or a million other things that you see if you look at people's financial decisions. People do so largely because of desire that has been aroused in them by marketers.
sokoloff 6y ago
> Pick whatever method of keeping the users' eyes on the screens and be less greedy, more efficient. Being greedy for your users’ limited life is at least as bad as whatever Google does, IMO.
totemandtoken 6y ago
Possibly, but that strikes me as the path of most resistance. You are competing to create a more efficient market than one engineered by thousands of employees over a long period of time. I really doubt that one individual or even a handful of experts can create a mechanism design that's more efficient than what Goggle's developed for the better part of a decade and a half. This is the issue with monopolies - They are the market.

by mojuba 6y ago

NullPrefix 6y ago

>ad spendings are included in the prices of consumer products No ads and no price haggling are big reasons why Tesla is so popular.

fakedang 6y ago
Apple too Also, the lack of options. It's much easier to buy from Apple or Tesla (even though I don't use any Apple products except a Mac Mini), simply because the number of options are less. At this point, I don't know the difference between a Vostro, a Latitude and an XPS.
- sofixa 6y ago
  I don't know where you live, but in France there are plenty of Apple ads. Some are run by third parties ( e.g. telecoms advertising you can get the latest iPhone with them, mostly in the form of a huge Apple ad with a small logo of the operator actually advertising ) but most are not.
  - yoz-y 6y ago
    Exactly. During holiday season half of ads are for Apple.
PointyFluff 6y ago
Doubt.

solatic 6y ago

> most people don't realize that they are paying for digital content and free social services anyway, albeit indirectly, since the ad spendings are included in the prices of consumer products That's a zero-sum argument that's a bit disingenuous. If you make widgets, and it costs you $5 to make a widget, you can sell 10 of them at $20/pop to the consumer for a total profit of 10 * (20-5) = $150. If you spend $100 on advertising, but that advertising helps you sell to 100 consumers, then you can sell them instead for $10/pop and make 100 * (10-5) - 100 = $400 profit, so you make more profit AND cut the price in half, so everyone wins. The problem is that advertising is so unfocused that it has both littered the public space and been unable to prove, in many or most cases, that it actually succeeds in its goal of improving both profits and reducing prices.

mojuba 6y ago
I agree, the inefficiency of advertisement might be the main reason for the surplus we are paying (also let's not forget the platform - the middleman). However: > been unable to prove, in many or most cases, that it actually succeeds in its goal of improving both profits and reducing prices Neither has it been able to prove the opposite. The long-term effects of brand awareness are difficult to measure. Anecdotally, I've seen cases when a very expensive billboard didn't move the download figures even by an iota but local people began talking about the company casually and even recognizing some of the employees on the streets, telling them how they like the product.
bluesign 6y ago
Actually I don’t agree with zero-sum argument, but your example seems to be equally wrong. Every widget you sell with advertisement is one widget sold less for competitor (or something totally else) Advertisement is not increasing the money consumer can spend totally. So basically you are trying to steal someoneelses share
- solatic 6y ago
  > Every widget you sell with advertisement is one widget sold less for competitor (or something totally else) Not exactly. It's true that consumers sometimes make choices between competitors, like deciding to go to one fast food chain or another. But oftentimes consumers make a choice about how much money to spend vs save. If a consumer has $500 in discretionary funds, the consumer can decide to buy a simple, no-frills, commoditized "meets-my-needs" product and save the $400 for later. Or the consumer can decide to spring for the ultra-deluxe $500 product and save nothing. Discretionary income is far higher than most people realize. Nobody needs to buy soft drinks, new cars (i.e. instead of a used car), new clothes (instead of sewing up old ones), yet another new video game (instead of a library of millions of older titles that are still as entertaining as they were when they were first released), or a million other things that you see if you look at people's financial decisions. People do so largely because of desire that has been aroused in them by marketers.

sokoloff 6y ago

> Pick whatever method of keeping the users' eyes on the screens and be less greedy, more efficient. Being greedy for your users’ limited life is at least as bad as whatever Google does, IMO.

totemandtoken 6y ago

Possibly, but that strikes me as the path of most resistance. You are competing to create a more efficient market than one engineered by thousands of employees over a long period of time. I really doubt that one individual or even a handful of experts can create a mechanism design that's more efficient than what Goggle's developed for the better part of a decade and a half. This is the issue with monopolies - They are the market.