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What about ads + paid plans with no ads? I feel like that’s a great middle ground for everyone who would delete the app if it had ads. Am I missing something wi

What about ads + paid plans with no ads? I feel like that’s a great middle ground for everyone who would delete the app if it had ads. Am I missing something with that thought process?

tsjq 6y ago
I'm totally in for this.
jarito 6y ago
Once a company starts selling ads, privacy is no longer in their interest. Even paid customers will get lumped in to monitoring and reporting to satisfy / push up ad revenues.
- ex3ndr 6y ago
  That never was true under Paul's management - ads was just to keep stuff alive.
thrwaway-adtech 6y ago
The problem with this model from the advertisers perspective is the people with disposable income who will pay for your ad free experience are the exact people they want to show the ads to. I don’t know if telegram has this problem, but it’s certainly the problem in most ad + premium models because if I am advertising something like a car, I want the guy who can afford $10/month for her texting app to see my ad more than the people who don’t! Those ads are the most profitable and have the best chance of subsidizing the free users, who you need in your network to keep the paid users. (Throwaway because I work in ad tech and don’t want this sentiment linked to my employer)
- Hamcha 6y ago
  Why would you think someone who actively pays to not be served ads would be a good fit to be advertised to? Eg. My personal experience with buying products (food, software, SaaS, etc) based on ads conditioned me to actively distrust products that are heavily advertised compared to stuff that's just mentioned in reddit threads or used by friends. Would I be a good fit for ads?
  - ebiester 6y ago
    If you are willing to pay for something that is free, it generally means you have more disposable income. It's not that you become more valuable, it's that the remaining cohort becomes less valuable. Few people making $30,000 a year are going to pay to disable ads. many people making $200,000 or more are going to consider it.
  - carschno 6y ago
    The goal of an ad is mostly to make potential buyers aware of a specific product/brand. Hence, showing ads to potential buyers is most effective, even if many/most will not become actual buyers (like you, apparently). The conversion rate among the potential buyers (who can afford to pay for an ad-free service) is still much higher than among users who agree to see the ad (by not paying for an ad-free service), but cannot afford to buy the product.
  - adrr 6y ago
    Disposable income. Demographic is different for people who pay to remove ads than people who don't. I pay to block ads on Hulu and Youtube and buy upcoming brands like Vuori, Away, Peloton, Allbirds etc. Marketing works. How do you think your friends learned about product that are mentioned in reddit threads? Guarantee it wasn't organic. If the company was launched in the last 10 years, it was built on VC dollars used to spend tens to hundreds millions in marketing.
  - deadmutex 6y ago
    I think I took an advertising class long time ago (so long ago that I don't remember if it was an actual advertising class, Advertising 101 or some marketing class). But, what stuck to me was, that most people said that they were unaffected by ads, and the data showed otherwise. Ads also help with brand recognition etc. Typically, people are very familiar with some space, say desktop CPUs... and they'll say, "I'll never buy an intel CPU just based on an ad", and that might be true. However, when it comes to a space that's completely far away from their day to day expertise, say... weedkiller in the garden, and they're more likely to trust a branded product that they've seen product placement or other types of ad. Of course, not everyone is that way, but ads have different objectives, and they are effective.
- _jal 6y ago
  This just cements my belief that advertisers no longer consider making people feel intruded upon by ads a bad thing - they directly target people who do not want to see their messaging. The goal is to nonconsensually force their message on people who don't want it. Fuck these people.
  - thrwaway-adtech 6y ago
    It’s not that people who want ad-free experiences are targeted, it’s that people who have money to spare every month to buy a premium experience (in this case, not be annoyed by an ad), are highly correlated with people who you want to reach because they have money to buy your product, and that’s who they want to advertise to. Advertisers don’t want to be spending money to reach people who will never buy their product, either because they hate their ad or because they don’t have money, but unfortunately there is no way to know who these people are in advance. Spending $10/month to not look at text ads is a sure fire way to signal you have money so you aren’t in the later camp, and people who hate ads with a passion and won’t respond to them are rare in the wild (hn nonwithstanding :D) Too many people think they can monetize by just “sprinkle some ads on it” without thinking about why an advertiser would buy those ads.
    - mahogany 6y ago
      Just to be pedantic (because I was a bit confused), the emphasis shouldn't really be on "targeted" because > and that’s who they want to advertise to is just a fancy way of saying "targeting". What I think you're saying is that it's not people who want ad-free experiences that are being targeted. Rather, those people belong to a broader group -- those with money to spend -- who are being targeted.
  - lotsofpulp 6y ago
    > The goal is to nonconsensually force their message on people who don't want it. What part of the post you replied to indicates nonconsensual?
  - dalbasal 6y ago
    Online advertisers are much simpler than that. They want sales, or signups or whatever acronym they need to force up. Group A converts at 10%. Group B at 1%. The advertiser may have a theory of why these groups are different. Increasingly, we don't. FB, especially, does a lot of automated targeting. Marketers tend to have good instincts about these things, because patterns are repetitive and simple. That said, I'm pretty confident that advertising to subscribers would be more effective than advertising to non subscribers. In my mind, "person who subscribed to a thing online" is just a good qualifier. It probably correlates to a lot of other qualities like "shops online often" or whatnot. Those "theories" don't really matter though. They're just a starting point. Advertisers don't know or care what people think of the ads nor how they make the 98.3% who didn't buy anything feel. All they know is that they didn't click/buy/whatever. I think people imagine online advertisers like a geekier version of mad men. It isn't like that. There's not the pretensions of understanding or influencing psychology. It's more like stock trading.
- AYBABTME 6y ago
  How does Youtube Premium handle this?
- dalbasal 6y ago
  Exactly. FB would never do this, and google would never do it for search. It's adverse selection. Spotify is a good example. The ad supported version has uses: it's a funnel for paid users, a deterrent to competition, a data farm, etc. Making money is not one of those uses. I suspect that this is because the best advertisers audience subscribes. Also, opt out ads also harms your upside. EG, fb make more in ad revenue than they could ever make in subs. You don't want to pursue an ad-based strategy that excludes the possibility of a win like that, even if it's a long shot.
  - wdb 6y ago
    I think Spotify makes their ads purposely annoying to use it as funnel for paid plans. I have the feeling the ads got worse over time so stopped using the app. I normally don't mind listening to the news and commercial breaks on the good old radio.
    - dalbasal 6y ago
      Well... that's part of the premise of freemium. They could probably kill ads entirely and like without that revenue, but then why would people subscribe? For spotify this is tolerable. Network effects exist, but they aren't everything. For telegram, network effects are the whole thing. "Freemium" doesn't usually work the way people think it does. "Just let me pay to remove ads" is rarely good business advice. If your business model is ads, you stick with ads. If your business model is subs, you might have an ad-supported version for other reasons. Even in old media, paid channels/papers/etc. still have ads. They don't make an ad free version.
    - skinnymuch 6y ago
      Yes. Spotify makes very little from the ads. Spotify would like to cripple the payment free version as much as possible. It is only there to move you over to the paid version and possibly as a helpful network effects way.
  - missedthecue 6y ago
    Ignoring the adverse selection problem for a moment, why don't you think FB could make more money on subs? Facebook revenue per user is $30 in the US. As long as the monthly subscription is greater than $2.50 a month, they are making more that way.
- vhiremath4 6y ago
  Ah this makes total sense. Thanks for the additional info!
grishka 6y ago
There will be no ads in the sense you're suggesting.
- redisman 6y ago
  Ad providers want to target their ads or you'll get the worst performing ads which won't generate much revenue for anyone.
  - grishka 6y ago
    They may want it, but it's Pavel Durov who makes the ultimate decision, and, knowing him as well as I do, I'd say that it's very unlikely he'll allow any semblance of tracking or targeting. He has no sympathy for surveillance capitalism and "growth". Besides, as I said in another comment, ads will only exist in channels. Channels have already sold ads directly since about forever. Also: https://t.me/durov/153 https://t.me/durov/153
krisdol 6y ago
Ads create a twisted profit incentive that counters what Telegram wants to be, even if Telegram only pursues a privacy-friendly ads experience at first. Sell functionality, storage, customization, or digital assets. I know Discord doesn't _just_ make money off of these things, but that revenue stream is a compatible option for Telegram.

What about ads + paid plans with no ads? I feel like that’s a great middle ground for everyone who would delete the app if it had ads. Am I missing something with that thought process?

tsjq 6y ago

I'm totally in for this.

jarito 6y ago

Once a company starts selling ads, privacy is no longer in their interest. Even paid customers will get lumped in to monitoring and reporting to satisfy / push up ad revenues.

ex3ndr 6y ago
That never was true under Paul's management - ads was just to keep stuff alive.

thrwaway-adtech 6y ago

The problem with this model from the advertisers perspective is the people with disposable income who will pay for your ad free experience are the exact people they want to show the ads to. I don’t know if telegram has this problem, but it’s certainly the problem in most ad + premium models because if I am advertising something like a car, I want the guy who can afford $10/month for her texting app to see my ad more than the people who don’t! Those ads are the most profitable and have the best chance of subsidizing the free users, who you need in your network to keep the paid users. (Throwaway because I work in ad tech and don’t want this sentiment linked to my employer)

Hamcha 6y ago
Why would you think someone who actively pays to not be served ads would be a good fit to be advertised to? Eg. My personal experience with buying products (food, software, SaaS, etc) based on ads conditioned me to actively distrust products that are heavily advertised compared to stuff that's just mentioned in reddit threads or used by friends. Would I be a good fit for ads?
- ebiester 6y ago
  If you are willing to pay for something that is free, it generally means you have more disposable income. It's not that you become more valuable, it's that the remaining cohort becomes less valuable. Few people making $30,000 a year are going to pay to disable ads. many people making $200,000 or more are going to consider it.
- carschno 6y ago
  The goal of an ad is mostly to make potential buyers aware of a specific product/brand. Hence, showing ads to potential buyers is most effective, even if many/most will not become actual buyers (like you, apparently). The conversion rate among the potential buyers (who can afford to pay for an ad-free service) is still much higher than among users who agree to see the ad (by not paying for an ad-free service), but cannot afford to buy the product.
- adrr 6y ago
  Disposable income. Demographic is different for people who pay to remove ads than people who don't. I pay to block ads on Hulu and Youtube and buy upcoming brands like Vuori, Away, Peloton, Allbirds etc. Marketing works. How do you think your friends learned about product that are mentioned in reddit threads? Guarantee it wasn't organic. If the company was launched in the last 10 years, it was built on VC dollars used to spend tens to hundreds millions in marketing.
- deadmutex 6y ago
  I think I took an advertising class long time ago (so long ago that I don't remember if it was an actual advertising class, Advertising 101 or some marketing class). But, what stuck to me was, that most people said that they were unaffected by ads, and the data showed otherwise. Ads also help with brand recognition etc. Typically, people are very familiar with some space, say desktop CPUs... and they'll say, "I'll never buy an intel CPU just based on an ad", and that might be true. However, when it comes to a space that's completely far away from their day to day expertise, say... weedkiller in the garden, and they're more likely to trust a branded product that they've seen product placement or other types of ad. Of course, not everyone is that way, but ads have different objectives, and they are effective.
_jal 6y ago
This just cements my belief that advertisers no longer consider making people feel intruded upon by ads a bad thing - they directly target people who do not want to see their messaging. The goal is to nonconsensually force their message on people who don't want it. Fuck these people.
- thrwaway-adtech 6y ago
  It’s not that people who want ad-free experiences are targeted, it’s that people who have money to spare every month to buy a premium experience (in this case, not be annoyed by an ad), are highly correlated with people who you want to reach because they have money to buy your product, and that’s who they want to advertise to. Advertisers don’t want to be spending money to reach people who will never buy their product, either because they hate their ad or because they don’t have money, but unfortunately there is no way to know who these people are in advance. Spending $10/month to not look at text ads is a sure fire way to signal you have money so you aren’t in the later camp, and people who hate ads with a passion and won’t respond to them are rare in the wild (hn nonwithstanding :D) Too many people think they can monetize by just “sprinkle some ads on it” without thinking about why an advertiser would buy those ads.
  - mahogany 6y ago
    Just to be pedantic (because I was a bit confused), the emphasis shouldn't really be on "targeted" because > and that’s who they want to advertise to is just a fancy way of saying "targeting". What I think you're saying is that it's not people who want ad-free experiences that are being targeted. Rather, those people belong to a broader group -- those with money to spend -- who are being targeted.
- lotsofpulp 6y ago
  > The goal is to nonconsensually force their message on people who don't want it. What part of the post you replied to indicates nonconsensual?
- dalbasal 6y ago
  Online advertisers are much simpler than that. They want sales, or signups or whatever acronym they need to force up. Group A converts at 10%. Group B at 1%. The advertiser may have a theory of why these groups are different. Increasingly, we don't. FB, especially, does a lot of automated targeting. Marketers tend to have good instincts about these things, because patterns are repetitive and simple. That said, I'm pretty confident that advertising to subscribers would be more effective than advertising to non subscribers. In my mind, "person who subscribed to a thing online" is just a good qualifier. It probably correlates to a lot of other qualities like "shops online often" or whatnot. Those "theories" don't really matter though. They're just a starting point. Advertisers don't know or care what people think of the ads nor how they make the 98.3% who didn't buy anything feel. All they know is that they didn't click/buy/whatever. I think people imagine online advertisers like a geekier version of mad men. It isn't like that. There's not the pretensions of understanding or influencing psychology. It's more like stock trading.
AYBABTME 6y ago
How does Youtube Premium handle this?
dalbasal 6y ago
Exactly. FB would never do this, and google would never do it for search. It's adverse selection. Spotify is a good example. The ad supported version has uses: it's a funnel for paid users, a deterrent to competition, a data farm, etc. Making money is not one of those uses. I suspect that this is because the best advertisers audience subscribes. Also, opt out ads also harms your upside. EG, fb make more in ad revenue than they could ever make in subs. You don't want to pursue an ad-based strategy that excludes the possibility of a win like that, even if it's a long shot.
- wdb 6y ago
  I think Spotify makes their ads purposely annoying to use it as funnel for paid plans. I have the feeling the ads got worse over time so stopped using the app. I normally don't mind listening to the news and commercial breaks on the good old radio.
  - dalbasal 6y ago
    Well... that's part of the premise of freemium. They could probably kill ads entirely and like without that revenue, but then why would people subscribe? For spotify this is tolerable. Network effects exist, but they aren't everything. For telegram, network effects are the whole thing. "Freemium" doesn't usually work the way people think it does. "Just let me pay to remove ads" is rarely good business advice. If your business model is ads, you stick with ads. If your business model is subs, you might have an ad-supported version for other reasons. Even in old media, paid channels/papers/etc. still have ads. They don't make an ad free version.
  - skinnymuch 6y ago
    Yes. Spotify makes very little from the ads. Spotify would like to cripple the payment free version as much as possible. It is only there to move you over to the paid version and possibly as a helpful network effects way.
- missedthecue 6y ago
  Ignoring the adverse selection problem for a moment, why don't you think FB could make more money on subs? Facebook revenue per user is $30 in the US. As long as the monthly subscription is greater than $2.50 a month, they are making more that way.
vhiremath4 6y ago
Ah this makes total sense. Thanks for the additional info!

grishka 6y ago

There will be no ads in the sense you're suggesting.

redisman 6y ago
Ad providers want to target their ads or you'll get the worst performing ads which won't generate much revenue for anyone.
- grishka 6y ago
  They may want it, but it's Pavel Durov who makes the ultimate decision, and, knowing him as well as I do, I'd say that it's very unlikely he'll allow any semblance of tracking or targeting. He has no sympathy for surveillance capitalism and "growth". Besides, as I said in another comment, ads will only exist in channels. Channels have already sold ads directly since about forever. Also: https://t.me/durov/153 https://t.me/durov/153

krisdol 6y ago

Ads create a twisted profit incentive that counters what Telegram wants to be, even if Telegram only pursues a privacy-friendly ads experience at first. Sell functionality, storage, customization, or digital assets. I know Discord doesn't _just_ make money off of these things, but that revenue stream is a compatible option for Telegram.