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What would happen if legislation were passed to ban all tracking, across the board? Perhaps also inclusive of limits on targeted advertising also (to reduce the

• lumost 6y ago
  There are a few factors at play here when it comes to advertising. 1) Digital is taking over all ad-channels 2) Digital ads can be tracked and attributed ways that were never possible with traditional media 3) It turns out most non-targeted ads aren't actually that effective, and aggregate ad spend is falling. FB ads are effective and high value because of tracking. If tracking goes away, FB ad revenue will fall to that of banner advertising at roughly 1/100th to 1/10000th the price per impression that FB currently receives. Such a change would effectively force a rethink of the entire consumer technology business, and see FB/GOOG re-structure to some form of subscription revenue or shutdown large feature sets and product offerings which would no longer be tenable.
  • grishka 6y ago
    How much does Facebook earn from one user, $1 a year? No one would've died if they switched to a $1/year subscription model. People tend to respect companies that are honest with them. Except Facebook won't ever be able to regain its reputation, but still.
    • judge2020 6y ago
      https://mondaynote.com/the-arpus-of-the-big-four-dwarf-everybody-else-e5b02a579ed3#e27f:~:text=Facebook%E2%80%99s%20revenue%20per%20user%20is%20roaring.,does%20that%20with%20a%20free%20service https://mondaynote.com/the-arpus-of-the-big-four-dwarf-every.... Depends on the metric you use. > Facebook’s revenue per user is roaring. For Q4 2018 vs. Q4 2017, it’s global ARPU increased by 19 percent to $7.37, and the US-Canada ARPU by 30 percent to $35. Between 2011 and 2018, the social network global ARPU rose nearly 6x, while the US-Canada grew 11x. With a domestic revenue per user of $112, Facebook is the equivalent of a publisher charging $9 a month. It does that with a free service.
      • grishka 6y ago
        TIL. I thought these kinds of numbers weren't at all possible with an ad-supported business model.
    • lumost 6y ago
      Assuming that the only users who would be willing to pay are those who use one of FB's services at least once per month; then FB would need to charge $26/yr to match their current revenue. Given that they already have 2.7 billion MAUs it's unlikely that they could grow their way out of such a change, and serving ads is ultimately inexpensive.
    • marketingtech 6y ago
      In Q4 alone, they made $53/user in US/Canada, and $10/user worldwide. This revenue is not evenly distributed, and the type of user who is willing to pay $50/quarter for FB is worth much more than that to FB advertisers. source: Slide 4 (ARPU) https://s21.q4cdn.com/399680738/files/doc_financials/2020/q4/FB-Earnings-Presentation-Q4-2020.pdf https://s21.q4cdn.com/399680738/files/doc_financials/2020/q4...
    • Zelphyr 6y ago
      Doing that would equate to $2.7 billion a year in revenue. They currently generate about $70 billion a year. So, yeah; they'd pretty much die if their revenue dropped that much.
      • grishka 6y ago
        Imagine how much money they could save if they stop redesigning every little thing all the time to squeeze every last cent. Imagine not needing hundreds of developers working on a single app.
  • otabdeveloper4 6y ago
    > FB ads are effective and high value Not really. Digital advertising, frankly, sucks from the advertiser's point of view. It's just that people are online now and advertisers have no choice: the inventory providers are monopolistic and unregulated.
    • lumost 6y ago
      A more fair comparison might be that all advertising sucks from an advertisers perspective... but we just didn't have a good way to measure it. In the world of Nielson and print the only consistently measurable ads were brand ads - and brand awareness had a loose correlation across businesses with revenue. There was no way of rigorously testing whether individual customers propensity to purchase a good from a given business was actually tied to any of the brand awareness ads that were being purchased, or customer's brands they had heard of for trust reasons after deciding on a purchase, or if customer's simply didn't care about the branding. Bear in mind, any negative datapoint that indicates customer's didn't care could always be taken as a sign that the "brand" had to be improved. Not that the ads were worthless. Now on digital any brand exercise, direct pay per conversion, or other form of ad gets attributed to downstream revenue, and we're quickly discovering which half of the marketing budget isn't working.
      • otabdeveloper4 6y ago
        > There was no way of rigorously testing whether individual customers propensity to purchase a good from a given business was actually tied to any of the brand awareness ads that were being purchased This isn't right. Of course there was - statistics, sampling and A/B testing was invented way before computers or the Internet existed. Advertising is just applied sociology, and sociology is just statistics when done right.
    • Permit 6y ago
      > Digital advertising, frankly, sucks from the advertiser's point of view. What advertising does not suck from the advertiser's point of view? How are metrics gathered that demonstrate these forms of advertising work?
  • throwaway2245 6y ago
    > It turns out most non-targeted ads aren't actually that effective Non-personalised television advertising is still doing great.
    • marketingtech 6y ago
      No, it's not. Eyeballs are down, thus prices and market share are down compared to digital. Different industry sources have different figures, but everyone agrees TV spend was down >5% in 2020 and expected to drop faster in 2021 as digital continues to grow at >30%. There's now a mad rush to standardize tech for personalized tv advertising, as providers plan to use the email/phone number you used for your cable/streaming service as a personal identifier that can be joined against 3rd party targeting data. I'm not trying justifying this - just describing where the industry (and money) is going.
      • throwaway2245 6y ago
        Is it not right that 2019 was the highest spend ever for TV advertising? And a 5% drop would be less than the drop in broader TV production, via coronavirus? Major events that are associated with large advertising budgets haven't happened: the Olympics didn't happen. The Eurovision Song Contest didn't happen.
  • mgreg 6y ago
    > 3) It turns out most non-targeted ads aren't actually that effective, and aggregate ad spend is falling. While this is a commonly held believe in many corners it doesn't appear to be well backed by data & research. Freakonomics also covered this topic in some detail recently. Some examples where it's proven untrue: Nytimes drops targeted advertising in Europe: https://digiday.com/media/gumgumtest-new-york-times-gdpr-cut-off-ad-exchanges-europe-ad-revenue/ https://digiday.com/media/gumgumtest-new-york-times-gdpr-cut... >“The fact that we are no longer offering behavioral targeting options in Europe does not seem to be in the way of what advertisers want to do with us,” he said. “The desirability of a brand may be stronger than the targeting capabilities. We have not been impacted from a revenue standpoint, and, on the contrary, our digital advertising business continues to grow nicely.” Danish broadcaster grew revenue after dropping targeted ads: https://techcrunch.com/2020/07/24/data-from-dutch-public-broadcaster-shows-the-value-of-ditching-creepy-ads/ https://techcrunch.com/2020/07/24/data-from-dutch-public-bro... >The data shows the NPO grew ad revenue after ditching trackers to target ads in the first half of this year
    • lumost 6y ago
      Typically, platforms with smaller reach ( read < 10 million DAU) will only have a few big advertisers who are willing to purchase most ad positions. Behavioral targeting on such platforms with large advertisers will probably only limit spend by cutting out bad impressions, and the in-house or external behavioral targeting isn't anything close to what FB offers. FB/Goog dominate ad-spend as they are able to effectively match small advertisers with the appropriate audience, and these advertisers typically have specific customer goals in mind. If the goal of the ad buyers on the NYT is simply to associate their brand with the trustworthiness of the NYT, then there won't be much benefit from behavioral targets.
• flavius29663 6y ago
  I have a different idea other than banning: make companies pay a tax on each bit of user information they hold.
  • broknbottle 6y ago
    Tax, how about royalties to the user. They use that data to advertise to other users within a family or circle. It’s data about us, why shouldn’t they have to pay a royalty to users and get our permissions beforehand when they want to utilize the data in different ways. We have different licenses for code and projects. Why not have something similar for user data / metadata
    • gameman144 6y ago
      You could argue that they do pay a royalty to users, and that royalty gets put toward free access to software and services. Whether or not that royalty is sufficient is fine to debate, but at the end of the day someone is footing the bill.
  • vaduz 6y ago
    Great idea! It means that the company gets to do the tracking as much as it wants as long as it shares some of these profits with the government, and as a bonus gets to enjoy a reasonably confidence that any initiative to futher enhance privacy will be quashed in a hurry - with bipartisan support, too, especially in the current tax revenue slump thanks to the ongoing pandemic. /s The word you were probably looking for is fines, but they would have to be punitive and extraordinarily risky to stop the practice...
    • flavius29663 6y ago
      what I meant was taxes high enough to matter for the bottom line. Also, this would force the companies to open up their databases for government or public inspection, kind-of like we do today with uranium processing. This alone would expose dark behavior much earlier than today
• gameman144 6y ago
  One worry I have is regarding poorly handled legislation hobbling national companies more than intended and driving consumers to worse options (as opposed to just preventing them from doing creepy things.) One of the prime examples here is search: if Google didn't keep a history of my search terms and/or other data about my account, the results they'd return would be far less personalized. I could (and do) use DuckDuckGo instead, but the search results are far less convenient (e.g. when I look up "compilation", DDG shows me literary compilations, Google shows me code-related things). This in itself is fine, as long as either: 1. The drop in convenience isn't so high that people would prefer an alternative service 2. We can impose these rules worldwide. If the drop in convenience isn't too bad, then even though there's a little more friction, there's not a mass exodus from these services. If we could impose these rules worldwide, that'd also make this an easy decision. Given that the web is global, however, my biggest area of worry is that we squeeze all national companies to protect privacy, but it turns out the consumers really did like the personalized and convenient experiences and immediately switch over to Baidu or some other site that falls outside national jurisdiction and personalizes user experience well (presumably through even stronger privacy invasions). tl;dr: I am cool with legislation, but given the global scale of the web we need to make sure we get the incentives/changes just right.
• chias 6y ago
  > ban all tracking That's a whole can of worms. Does the existence of things like your website's Apache request log count as "tracking"? Or does it only count if it's multiple domains? Maybe we'd need to say multiple organizations, to account for applications with multiple domains (e.g. facebook.com, fbcdn.com, etc.) But then what is an organization? If I sign an agreement with you to sell you my Apache request log, is that now illegal? If so, what was it about that that made it illegal? How do you make that illegal without also making it illegal to share these otherwise benign logs with people for the purpose of debugging website issues? Are you going to base this on "intent"? That is, "you're free to share this data with X as long as X does not intend to use it for advertising, or to share it with anyone else who might [...] who might intend to use it for advertising"? These kinds of intent-chains are spectacularly ineffective, in part because the advertising ecosystem is set up to make these chains as convoluted as possible, and suddenly someone just has some data there and why not make profiles out of it? etc. :\