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The online ad business generally mystifies me. While an awful lot of the internet, especially the surveillance advertising part, looks to be the greatest misal

The online ad business generally mystifies me. While an awful lot of the internet, especially the surveillance advertising part, looks to be the greatest misallocation of engineering (and other) talent in the history of the world, ya gotta ask about the efficacy. The only reasonably accurate targeting I've ever run into is the occasional ad for something I just browsed on Amazon. I've never clicked on an internet ad. Youtube advertising might as well be targeted to an alien race. What in the hell keeps this whole business afloat at it's current level? Am I being programmed to buy that mechanic's vise because they threw up an after-the-browse ad? No doubt there's some sort of backend telemetry that proves the value of all this trouble, but I just don't see it. Maybe the emperor really is nekkid. edit: It may well be that the real marketing genius in the advertising industry is not it's value in increasing sales, whether it's old school print media/OTA/tradeshows or the newfangled spying-on-you internet variety, but in convincing it's customers of advertising's value. Anything beyond pushing you up a search engine's ranking strikes me as a sketchy proposition.

pydry 5y ago
I have tracking blockers set up all over, so I rarely get ads targeted at me. Instead I get ads targeted at people who share my IP. I can often tell what my girlfriend has been browsing for from the ads I'm hit with, for instance, which is somewhat creepy.
- heavyset_go 5y ago
  > I can often tell what my girlfriend has been browsing for from the ads I'm hit with, for instance, which is somewhat creepy. I've had ads for medication that I'm prescribed, or could be prescribed, play on other people's devices when they use my network. It's likely targeted because I don't get ads for other types of prescriptions at all at home. I'm also pretty sure of some of the medical conditions my friends and family have based on the ads I consistently see in their homes.
tonyedgecombe 5y ago
I wouldn't be surprised if Adwords is a net loss for the majority of Google's customers. The whole thing is full of dark patterns. Personally I got so fed up with the abusive nature of it that I abandoned it several years ago.
- double0jimb0 5y ago
  I like to think of google ads the IRS of the internet. I pay my ad agency to minimize my google ads tax, not to grow business, same instructions I give to my tax accountant. Google will argue that everyone wins if you grow and pay more google tax, but many have tested this and proved it not to be true. Said another way, how good of a job your tax accountant is doing is orthogonal to growing your business.
- deleted 5y ago
  [deleted]
ashtonbaker 5y ago
> No doubt there's some sort of backend telemetry that proves the value of all this trouble. And it seems like unless you go to a lot of trouble, you're essentially relying on the ad network's own metrics for efficacy... Which when you consider the sheer quantity of money at stake, seems like it will end in a massive fraud at least once. I could be wrong about the perverse incentive though, it seems almost too obvious so I would assume that people who know the ad industry better than me would have a response to it.
- jefftk 5y ago
  > unless you go to a lot of trouble, you're essentially relying on the ad network's own metrics for efficacy There's a whole ecosystem of "buyside verification vendors" that advertisers contract with to validate that they're getting what they paid for. Buyers don't just take the seller's word for it, or at least enough of them don't that shady sellers are kept in check.
code4you 5y ago
I totally agree about the YouTube advertising. YouTube literally has hundreds of hours of my video history to work with, yet the vast majority of the ads I see are completely unrelated to my interests. What's the point of all the tracking if they can't even show me relevant ads on YouTube of all places? Podcast ads tend to be much more relevant, and I can even recall purchases I've made due to them. AFAIK my podcast player isn't tracking me or using targeted ads.
- lapnitnelav 5y ago
  That's because the companies winning bidds on your 'views' are targeting you because of your apparent persona, i.e middle aged man/woman in tech -aka middle class ++ with disposable income, rather than what you are interested in. On top of that, plenty of marketers are absolutely clueless about how to go about their strategy, mostly because unlike previous generations (in online ads), they don't grok the underlying tech at all.
  - kingsuper20 5y ago
    They might was well simply tie it to the program content then. For instance, if I watch a Scott Kilmer video, it'll typically have an Autozone ad. If that's all there is to it, I expect there's a lot of needless work being done under the covers.
    - blt 5y ago
      If you turn off personalized ads, that's basically what you'll see. Although for me, it's a 50/50 split between topic-related and ads that appear to target a generic male audience, which is a very good guess for some topics.
    - lapnitnelav 5y ago
      No, actually you can do both (and more). Advertising is throwing darts at the board with your eyes closed, whenever it lands somewhere on the board and nets you point is good enough for most. Typical conversion rates are under the 1% threshold so you accept that a lot of your spend is not efficient but when it is, you make your money back and some, if you are any good at it.
marcinzm 5y ago
>I've never clicked on an internet ad. The most successful ads looks very similar to the organic content and tend to have very similar targeting mechanisms. Search ads that look like search results. Product ads on amazon that look like product search results. Facebook ads that look like Facebook posts. In my experience all those ads are quiet close to content I'd like and I've clicked on quiet a few without realizing it's an ad.
- swader999 5y ago
  I'd argue further that the most successful are not at all distinguishable as adds. They masquerade as content but are paid placements or placed just for the sake of advertising.
hijodelsol 5y ago
While I personally agree with you when it comes to YT advertising which at times could not be more irrelevant, Google search ads and Facebook/Instagram ads seem to be the place where most money is spend. And in case of Google search the whole thing is basically a prisoners dilemma. You and your competitors are probably among the first results for the relevant keywords anyway and could save a lot on advertising if none of you advertised. But once a single competitor starts buying ads the whole sector has to move until the expense on Google ads is equal to the former profit margin. This in turn leads to monopolization as only the competitor with the highest profit margin at baseline will still be making a profit. It’s hard to believe that Google pushing its apps and a single search/navigation bar on users is but an attempt to get businesses to pay for results they would already rank pretty well for, thereby diverting the profit of entire industries to Google and not offering any benefits to users.
- fshbbdssbbgdd 5y ago
  > You and your competitors are probably among the first results for the relevant keywords anyway and could save a lot on advertising if none of you advertised. But once a single competitor starts buying ads the whole sector has to move until the expense on Google ads is equal to the former profit margin. This in turn leads to monopolization as only the competitor with the highest profit margin at baseline will still be making a profit. Granted, incumbents are likely to score high on organic search results. If somebody new comes up with a better product, which can deliver more value at a lower price, the page rank algorithm isn’t going to do much for them. But the newcomer’s superior unit economics mean they can afford to bid higher for an ad, which allows them to get market share from the incumbent. In that sense, ads can make the market more liquid, and speed adoption of improved products and more efficient manufacturing or business processes. The ad publisher does end up capturing a big chunk of this value, and it’s valid to ask if that’s fair and if we as a society should allow it.
fastball 5y ago
Generally yes but Instagram ads are somehow amazingly well-targeted towards me. Literally every ad I say to myself "wow, that is actually something I would consider buying" and in certain instances, I have. Outside of Instagram it is exceedingly rare that I would purchase something based on an ad.
- KptMarchewa 5y ago
  I'm in the same boat, and think it's just that I don't see any typical big advertiser ads like FMCG companies, whereas the traditional media is full of them. On the other side there are Google Play ads with mouth open guys - I'm never going to play one of those vile games, ever. https://www.reddit.com/r/AndroidGaming/comments/cv4ezs/mouth_opentooth_showing_guys_collection/ https://www.reddit.com/r/AndroidGaming/comments/cv4ezs/mouth...
- filoleg 5y ago
  From what I keep reading on HN, Facebook ad network ads (which includes Instagram) are by far the best and most precise in terms of targeting, it doesn't even get close. And from my anecdotal experiences, I have to agree with both you and what I see on HN in that regard. Not only they get the advertisers right up my alley, they even get the exact products I want to click on. For a specific example: I don't get easily baited by random no-name "hip" clothing startups (that are mostly just alibaba dropship sort of places), so instagram keeps giving me ads for Adidas products as well. And the thing is, not only does it get correctly that I am likely to be interested in Adidas products, the specific products from Adidas that get suggested to me in those ads are the exact kind of products from Adidas that I would be interested in. Which is very impressive and surprising, given how wide the range of Adidas products is, and how most of their general stuff isn't super appealing to me. It is hard to describe to the point where I am struggling myself to define what exactly I am looking for if I am navigating Adidas website. But somehow Instagram ads get it right on target most of the time. The only time when those ads let me down big time was when I saw an Adidas tracksuit advertised with the design I just liked a ton. Without looking at the details, I ordered it, only to realize a bit later that it was in "kids" section of their website, and I have no kids (and neither do I fall under the typical "people who might have kids" demographic by any metric; e.g., I don't search for any items even tangentially related to children, not a part of any FB groups that are heavily populated by parents or children, etc.). But damn, I would be lying if I said that Instagram didn't get the exact idea of what I wanted perfectly correct, sizing issues aside lol.
antattack 5y ago
We should not call them Ads. Ads used to be passive, one-way means to turn ones attention to something. Now-days "Ads" are a watching you.
- scubbo 5y ago
  I get your point, but this is inaccurate. Advertizing has always been targeted based on the demographic most likely to see them - deciding to air a TV ad during Saturday morning cartoons, during a football match, or during a soap opera has very meaningful differences. The only change now is that the granularity of information available for targeting has increased.
  - antattack 5y ago
    It used to be surveys few could voluntarily filled out that were interpolated onto similar demographics, or based on purchases. Now advertisers can track you directly where/when you go, without your permission. Your search and purchase history forever remembered, your location verified, your friends identified. With such level detail we will soon have custom pricing to maximize profits.
TwelveNights 5y ago
I've always thought that the value provided was in comparison to old-school advertising techniques, such as through physical media or broadcast-style presentation formats. Nowadays, even if some Youtube ads seem like a crapshoot, it's still much more focused than television.
- simonbarker87 5y ago
  This, its not that the new digital approaches are photos in absolute terms but compared to old media they are substantially better
waltherg 5y ago
The value proof in the backend that convinces advertisers to throw more many at this? Mostly rule of thumb heuristics with a fair amount of overselling. So no, in most cases the telemetry just doesn't prove much. I've seen the thesis that all this advertising revenue - even if poorly spent - subvents large portions of exciting research in deep learning etc. at the likes of Google and Facebook. So all that talent wouldn't entirely be lost to advertising.
csa 5y ago
You’ve made some really good points. Possible explanations that I have seen for inaccurate targeting: 1. Some folks have a ton of money in their budget to spend on marketing, and they frankly don’t care about optimizing their targeting. In some cases, this is a shrewd decision, since the benefits of marginal optimization don’t really justify the cost of optimization. That said, in most cases, it’s just sloth or ignorance combined with the knowledge that they better spend their ad budget or else “bad things” will happen. 2. Lots of people call themselves digital marketers. Most of them who are employees suck, and I mean suck really bad. The reason is that if you are really good at digital marketing, it’s pretty easy to roll your own small business that, at a minimum, makes enough money while still having a lot of latitude in terms of free time or financial upside. Most companies are not willing or are not able to pay highly competent digital marketers what they are worth. Regardless, these employee marketers who suck tend not to do well at optimizing targeting. 3. Most digital marketing agencies suck at targeting. This is largely a byproduct of #2 above. The owner of an agency or the lead marketer might be really good, but they often delegate to people who are not. Streamlining the work of the underlings turns out not to be that important for most of these agencies. That’s my 2 cents. I would love to hear other opinions.
1vuio0pswjnm7 5y ago
Perhaps it is not so much a question of whether online ads work nor how profitable the business is (or the costs to society of all the surveillance), but instead the question is why the author cannot or will not work on something else. Is the work he does truly valuable in a general sense. This question might help us gauge the veracity of his statements. If the web were 100% ad-free, it would still exist. It would still be growing. People would still spend countless hours working on computer programming. People would still be endlessly tinkering with the internet. This is reality, I saw it in the 80's and 90's. However, they would not be, as the author is today, asking for forgiveness, pledging to donate half their "earnings" to charity. Online ads may be an efficient way to make money but it also may be the only efficient way to make money from such "work" (experimentation, fun). The folks who are profiting from online ads will say anything to avoid that reality check. The emperor may indeed be naked, but the amount of money and infrastructure these companies have to bury the truth is enormous. They will not allow the world to ever again experience a web without pervasive advertising. The person who started the web already had a real job. He did not try to make money with online ads. That world was fun while it lasted. There were so many possibilities. Thanks to this author's "work", the possibilities now appear to be mostly dystopian. Compare this post "Why I work on Ads" to the original paper from Brin and Page that described the influence of advertising on web search as undesirable and a primary motivation for creating Google. http://research.google.com/pubs/archive/334.pdf http://research.google.com/pubs/archive/334.pdf
8note 5y ago
I get the sense that it's mostly children and right wing PACs that keep the ad business afloat
- TchoBeer 5y ago
  As a former child, I don't think I've ever bought or considered buying something because of an ad.
ChefboyOG 5y ago
There's a famous quote from John Wanamaker that goes something like: "Half of my advertising budget is wasted. The problem is, I don't know which half."
mdpye 5y ago
> I've never clicked on an internet ad. Me neither, but marketing is significantly about awareness, not just the clicks. If you've seen it, it is at some level "in you", and the brand has (fractionally) been built. I know this doesn't apply to all ads by any means, but it's important to remember that advertising also works this way.
- runj__ 5y ago
  It's amazing to see the amount of people in this post that don't click ads. I really try to avoid to click them, I quite often open an incognito window to search for product I've just seen in an ad (I'm sure Google will find a way to figure out that an incognito user with the same IP as me is... me, but it feels better to try). But I do click ads in my work, if the top (ad) link on Google is something relevant I might click it if I don't care for the company. I try to avoid clicking links for companies I really like since I work in a very ad heavy industry and know how much CPC can cost.
mediaman 5y ago
One of the interesting things about advertising is that nobody really knows if it works, and there's a growing body of evidence that it largely doesn't work. We are sold on the idea that they work, because someone clicks this ad, we track them, they buy the product, and we attribute the sale to that ad. But we don't know whether the customer would have bought anyway. And some research suggests that, for the most part, they would have. Steve Tadelis at Berkeley wrote a paper in 2013 demonstrating little to no efficacy of nine figures of ad spend at eBay. http://conference.nber.org/confer/2013/EoDs13/Tadelis.pdf http://conference.nber.org/confer/2013/EoDs13/Tadelis.pdf This may not be true of all ads - ads for little-known brands, for example, may reach people who would have never heard of it. But the bulk of advertising bought by large brands may largely be a waste. Advertisers still spend money because almost nobody is getting paid to rain on the parade. There's an endless stream of ad agencies, paid search marketers, marketing department staff themselves, CMOs, media properties, ad nauseam who are all invested in continuing marketing spend. A CMO will almost never declare that his department is useless. So they continue to make the case for their continued relevance.
- mc32 5y ago
  Organic mentions are the best ads; aside from that dedicated niche review sites which I’ll hit to look at the review and the comments. On the other hand, brand recognition I do believe has value but is hard to quantify. I also never click on an internet ad EXCEPT if it links to a price -not to buy.
  - bscphil 5y ago
    I partially disagree: fake (paid) "organic" mentions and fake reviews are the most effective form of marketing. And, obviously, they're much easier for a company to achieve than the real thing. How unsurprising is it that the most effective class of ad spend is the most scummy? The reason (fake) organic marketing is effective is exactly because it fools people into thinking that it isn't marketing. Take paid Amazon reviews for example. This is advertising, just one of the most scummy possible forms of it. It's effective because people like me look to reviews to provide a third-party take on whether or not a product is any good. If I have a choice between two otherwise equivalent products, I'll pick the one with better reviews. But usually this just means rewarding the company that paid more to "advertise" on Amazon. I realize you're probably talking about "real" organic mentions, but those are growing increasingly harder to find. A good example is the last time I bought headphones. I got suckered by a bunch of small review sites that had either been paid or gotten free samples in exchange for reviews. I bought two pairs, and when they arrived the sound from both was distorted. One pair broke within a few months. It was clearly trash that had been pumped using fake organic marketing. When I went back to find the sites that had provided the reviews in the first place, a few of them did mention (in very tiny print) that the reviews were paid. Me, suckered by advertising?! More likely than you'd think. Back in the day, Johnny Carson reading an ad was convincing to the median consumer because they could be led to believe that the ad really was an endorsement of the product. That doesn't work any more, or not nearly as much at any rate. The basic strategy hasn't changed: it's still an attempt to find someone the consumer will trust. This is why, in my opinion, ads have always been and always will be bad, an attempt to subvert human rationality. Johnny Carson endorsing a product didn't mean that the product was good, it meant he was paid to endorse it. A review site endorsing a product nowadays doesn't mean that the product is good, it means they're paid to endorse it. In both cases the breakdown between what the consumer believes is happening and what is actually happening is the very thing advertising is trying to create, its raison d'être.
jonas21 5y ago
Which do you think is more likely? a. A $300 billion dollar industry is based entirely on a delusion. b. You are an outlier.
- analog31 5y ago
  c. a portion of the industry is based on a delusion Given that some industries (or movements, ideologies, etc.) could credibly be based on delusions, what do you think is the upper limit for how big such an industry could get?
  - pierrefermat1 5y ago
    The ad industry is an easily verifiable one, just go ask any of your small business running friends to see if they have generated more profit than they've spent on ads.
    - analog31 5y ago
      My business has generated more profit than it has spent on ads. ;-)
jonplackett 5y ago
One of the craziest parts is the total lack of accountability. Google / FB just say they show your ad to a XXXX million people. You owe them $XXXX.
- runj__ 5y ago
  Wouldn't traditional "offline" advertising be even worse? "We suspect X million people watch this TV show (based on highly inaccurate Nielsen ratings) and then stayed around for the ad break, pay XX dollars." "XXX people passed by your billboard, XX saw it, X people visited your website and made a purchase, pay XX dollars."
  - jonplackett 5y ago
    At least that's an independent ranking (I presume?) Plus you can go watch TV and see that it's actually been on there. Or walk down the street, or pick up a newspaper.
- katzgrau 5y ago
  People track conversions - click through URLs contain tracking query params which track the source. If you convert (download a resource, request a demo, start a trial, buy a product) it gets reported back to Facebook. There's definitely accountability. The problem is that you can't always blame FB or Google because maybe your targeting is off, your ad copy sucks, you dumped the user off the front page of your website and they bailed, etc. There's a lot more to performance and accountability.
  - jonplackett 5y ago
    If you're only paying for conversions then you should be OK, but paying for clicks is still very common no?
notjustanymike 5y ago
A "successful" ad has a CTR (click through rate) of over 0.2%. Almost no one is clicking on ads.
manigandham 5y ago
First of not every ad is targeted to you. A large majority will just be lightly targeted or remnant inventory where it’s better to show you something than waste an impression. You probably don’t notice the ones that are well targeted because they just work.
swader999 5y ago
Here here. As an exercise, does anyone remember an add they saw today on the web? One they clicked on? I rarely do.

pydry 5y ago

I have tracking blockers set up all over, so I rarely get ads targeted at me. Instead I get ads targeted at people who share my IP. I can often tell what my girlfriend has been browsing for from the ads I'm hit with, for instance, which is somewhat creepy.

heavyset_go 5y ago
> I can often tell what my girlfriend has been browsing for from the ads I'm hit with, for instance, which is somewhat creepy. I've had ads for medication that I'm prescribed, or could be prescribed, play on other people's devices when they use my network. It's likely targeted because I don't get ads for other types of prescriptions at all at home. I'm also pretty sure of some of the medical conditions my friends and family have based on the ads I consistently see in their homes.

tonyedgecombe 5y ago

I wouldn't be surprised if Adwords is a net loss for the majority of Google's customers. The whole thing is full of dark patterns. Personally I got so fed up with the abusive nature of it that I abandoned it several years ago.

double0jimb0 5y ago
I like to think of google ads the IRS of the internet. I pay my ad agency to minimize my google ads tax, not to grow business, same instructions I give to my tax accountant. Google will argue that everyone wins if you grow and pay more google tax, but many have tested this and proved it not to be true. Said another way, how good of a job your tax accountant is doing is orthogonal to growing your business.
deleted 5y ago
[deleted]

ashtonbaker 5y ago

> No doubt there's some sort of backend telemetry that proves the value of all this trouble. And it seems like unless you go to a lot of trouble, you're essentially relying on the ad network's own metrics for efficacy... Which when you consider the sheer quantity of money at stake, seems like it will end in a massive fraud at least once. I could be wrong about the perverse incentive though, it seems almost too obvious so I would assume that people who know the ad industry better than me would have a response to it.

jefftk 5y ago
> unless you go to a lot of trouble, you're essentially relying on the ad network's own metrics for efficacy There's a whole ecosystem of "buyside verification vendors" that advertisers contract with to validate that they're getting what they paid for. Buyers don't just take the seller's word for it, or at least enough of them don't that shady sellers are kept in check.

code4you 5y ago

I totally agree about the YouTube advertising. YouTube literally has hundreds of hours of my video history to work with, yet the vast majority of the ads I see are completely unrelated to my interests. What's the point of all the tracking if they can't even show me relevant ads on YouTube of all places? Podcast ads tend to be much more relevant, and I can even recall purchases I've made due to them. AFAIK my podcast player isn't tracking me or using targeted ads.

lapnitnelav 5y ago
That's because the companies winning bidds on your 'views' are targeting you because of your apparent persona, i.e middle aged man/woman in tech -aka middle class ++ with disposable income, rather than what you are interested in. On top of that, plenty of marketers are absolutely clueless about how to go about their strategy, mostly because unlike previous generations (in online ads), they don't grok the underlying tech at all.
- kingsuper20 5y ago
  They might was well simply tie it to the program content then. For instance, if I watch a Scott Kilmer video, it'll typically have an Autozone ad. If that's all there is to it, I expect there's a lot of needless work being done under the covers.
  - blt 5y ago
    If you turn off personalized ads, that's basically what you'll see. Although for me, it's a 50/50 split between topic-related and ads that appear to target a generic male audience, which is a very good guess for some topics.
  - lapnitnelav 5y ago
    No, actually you can do both (and more). Advertising is throwing darts at the board with your eyes closed, whenever it lands somewhere on the board and nets you point is good enough for most. Typical conversion rates are under the 1% threshold so you accept that a lot of your spend is not efficient but when it is, you make your money back and some, if you are any good at it.

marcinzm 5y ago

>I've never clicked on an internet ad. The most successful ads looks very similar to the organic content and tend to have very similar targeting mechanisms. Search ads that look like search results. Product ads on amazon that look like product search results. Facebook ads that look like Facebook posts. In my experience all those ads are quiet close to content I'd like and I've clicked on quiet a few without realizing it's an ad.

swader999 5y ago
I'd argue further that the most successful are not at all distinguishable as adds. They masquerade as content but are paid placements or placed just for the sake of advertising.

hijodelsol 5y ago

While I personally agree with you when it comes to YT advertising which at times could not be more irrelevant, Google search ads and Facebook/Instagram ads seem to be the place where most money is spend. And in case of Google search the whole thing is basically a prisoners dilemma. You and your competitors are probably among the first results for the relevant keywords anyway and could save a lot on advertising if none of you advertised. But once a single competitor starts buying ads the whole sector has to move until the expense on Google ads is equal to the former profit margin. This in turn leads to monopolization as only the competitor with the highest profit margin at baseline will still be making a profit. It’s hard to believe that Google pushing its apps and a single search/navigation bar on users is but an attempt to get businesses to pay for results they would already rank pretty well for, thereby diverting the profit of entire industries to Google and not offering any benefits to users.

fshbbdssbbgdd 5y ago
> You and your competitors are probably among the first results for the relevant keywords anyway and could save a lot on advertising if none of you advertised. But once a single competitor starts buying ads the whole sector has to move until the expense on Google ads is equal to the former profit margin. This in turn leads to monopolization as only the competitor with the highest profit margin at baseline will still be making a profit. Granted, incumbents are likely to score high on organic search results. If somebody new comes up with a better product, which can deliver more value at a lower price, the page rank algorithm isn’t going to do much for them. But the newcomer’s superior unit economics mean they can afford to bid higher for an ad, which allows them to get market share from the incumbent. In that sense, ads can make the market more liquid, and speed adoption of improved products and more efficient manufacturing or business processes. The ad publisher does end up capturing a big chunk of this value, and it’s valid to ask if that’s fair and if we as a society should allow it.

fastball 5y ago

Generally yes but Instagram ads are somehow amazingly well-targeted towards me. Literally every ad I say to myself "wow, that is actually something I would consider buying" and in certain instances, I have. Outside of Instagram it is exceedingly rare that I would purchase something based on an ad.

KptMarchewa 5y ago
I'm in the same boat, and think it's just that I don't see any typical big advertiser ads like FMCG companies, whereas the traditional media is full of them. On the other side there are Google Play ads with mouth open guys - I'm never going to play one of those vile games, ever. https://www.reddit.com/r/AndroidGaming/comments/cv4ezs/mouth_opentooth_showing_guys_collection/ https://www.reddit.com/r/AndroidGaming/comments/cv4ezs/mouth...
filoleg 5y ago
From what I keep reading on HN, Facebook ad network ads (which includes Instagram) are by far the best and most precise in terms of targeting, it doesn't even get close. And from my anecdotal experiences, I have to agree with both you and what I see on HN in that regard. Not only they get the advertisers right up my alley, they even get the exact products I want to click on. For a specific example: I don't get easily baited by random no-name "hip" clothing startups (that are mostly just alibaba dropship sort of places), so instagram keeps giving me ads for Adidas products as well. And the thing is, not only does it get correctly that I am likely to be interested in Adidas products, the specific products from Adidas that get suggested to me in those ads are the exact kind of products from Adidas that I would be interested in. Which is very impressive and surprising, given how wide the range of Adidas products is, and how most of their general stuff isn't super appealing to me. It is hard to describe to the point where I am struggling myself to define what exactly I am looking for if I am navigating Adidas website. But somehow Instagram ads get it right on target most of the time. The only time when those ads let me down big time was when I saw an Adidas tracksuit advertised with the design I just liked a ton. Without looking at the details, I ordered it, only to realize a bit later that it was in "kids" section of their website, and I have no kids (and neither do I fall under the typical "people who might have kids" demographic by any metric; e.g., I don't search for any items even tangentially related to children, not a part of any FB groups that are heavily populated by parents or children, etc.). But damn, I would be lying if I said that Instagram didn't get the exact idea of what I wanted perfectly correct, sizing issues aside lol.

antattack 5y ago

We should not call them Ads. Ads used to be passive, one-way means to turn ones attention to something. Now-days "Ads" are a watching you.

scubbo 5y ago
I get your point, but this is inaccurate. Advertizing has always been targeted based on the demographic most likely to see them - deciding to air a TV ad during Saturday morning cartoons, during a football match, or during a soap opera has very meaningful differences. The only change now is that the granularity of information available for targeting has increased.
- antattack 5y ago
  It used to be surveys few could voluntarily filled out that were interpolated onto similar demographics, or based on purchases. Now advertisers can track you directly where/when you go, without your permission. Your search and purchase history forever remembered, your location verified, your friends identified. With such level detail we will soon have custom pricing to maximize profits.

TwelveNights 5y ago

I've always thought that the value provided was in comparison to old-school advertising techniques, such as through physical media or broadcast-style presentation formats. Nowadays, even if some Youtube ads seem like a crapshoot, it's still much more focused than television.

simonbarker87 5y ago
This, its not that the new digital approaches are photos in absolute terms but compared to old media they are substantially better

waltherg 5y ago

The value proof in the backend that convinces advertisers to throw more many at this? Mostly rule of thumb heuristics with a fair amount of overselling. So no, in most cases the telemetry just doesn't prove much. I've seen the thesis that all this advertising revenue - even if poorly spent - subvents large portions of exciting research in deep learning etc. at the likes of Google and Facebook. So all that talent wouldn't entirely be lost to advertising.

csa 5y ago

You’ve made some really good points. Possible explanations that I have seen for inaccurate targeting: 1. Some folks have a ton of money in their budget to spend on marketing, and they frankly don’t care about optimizing their targeting. In some cases, this is a shrewd decision, since the benefits of marginal optimization don’t really justify the cost of optimization. That said, in most cases, it’s just sloth or ignorance combined with the knowledge that they better spend their ad budget or else “bad things” will happen. 2. Lots of people call themselves digital marketers. Most of them who are employees suck, and I mean suck really bad. The reason is that if you are really good at digital marketing, it’s pretty easy to roll your own small business that, at a minimum, makes enough money while still having a lot of latitude in terms of free time or financial upside. Most companies are not willing or are not able to pay highly competent digital marketers what they are worth. Regardless, these employee marketers who suck tend not to do well at optimizing targeting. 3. Most digital marketing agencies suck at targeting. This is largely a byproduct of #2 above. The owner of an agency or the lead marketer might be really good, but they often delegate to people who are not. Streamlining the work of the underlings turns out not to be that important for most of these agencies. That’s my 2 cents. I would love to hear other opinions.

1vuio0pswjnm7 5y ago

Perhaps it is not so much a question of whether online ads work nor how profitable the business is (or the costs to society of all the surveillance), but instead the question is why the author cannot or will not work on something else. Is the work he does truly valuable in a general sense. This question might help us gauge the veracity of his statements. If the web were 100% ad-free, it would still exist. It would still be growing. People would still spend countless hours working on computer programming. People would still be endlessly tinkering with the internet. This is reality, I saw it in the 80's and 90's. However, they would not be, as the author is today, asking for forgiveness, pledging to donate half their "earnings" to charity. Online ads may be an efficient way to make money but it also may be the only efficient way to make money from such "work" (experimentation, fun). The folks who are profiting from online ads will say anything to avoid that reality check. The emperor may indeed be naked, but the amount of money and infrastructure these companies have to bury the truth is enormous. They will not allow the world to ever again experience a web without pervasive advertising. The person who started the web already had a real job. He did not try to make money with online ads. That world was fun while it lasted. There were so many possibilities. Thanks to this author's "work", the possibilities now appear to be mostly dystopian. Compare this post "Why I work on Ads" to the original paper from Brin and Page that described the influence of advertising on web search as undesirable and a primary motivation for creating Google. http://research.google.com/pubs/archive/334.pdf http://research.google.com/pubs/archive/334.pdf

8note 5y ago

I get the sense that it's mostly children and right wing PACs that keep the ad business afloat

TchoBeer 5y ago
As a former child, I don't think I've ever bought or considered buying something because of an ad.

ChefboyOG 5y ago

There's a famous quote from John Wanamaker that goes something like: "Half of my advertising budget is wasted. The problem is, I don't know which half."

mdpye 5y ago

> I've never clicked on an internet ad. Me neither, but marketing is significantly about awareness, not just the clicks. If you've seen it, it is at some level "in you", and the brand has (fractionally) been built. I know this doesn't apply to all ads by any means, but it's important to remember that advertising also works this way.

runj__ 5y ago
It's amazing to see the amount of people in this post that don't click ads. I really try to avoid to click them, I quite often open an incognito window to search for product I've just seen in an ad (I'm sure Google will find a way to figure out that an incognito user with the same IP as me is... me, but it feels better to try). But I do click ads in my work, if the top (ad) link on Google is something relevant I might click it if I don't care for the company. I try to avoid clicking links for companies I really like since I work in a very ad heavy industry and know how much CPC can cost.

mediaman 5y ago

One of the interesting things about advertising is that nobody really knows if it works, and there's a growing body of evidence that it largely doesn't work. We are sold on the idea that they work, because someone clicks this ad, we track them, they buy the product, and we attribute the sale to that ad. But we don't know whether the customer would have bought anyway. And some research suggests that, for the most part, they would have. Steve Tadelis at Berkeley wrote a paper in 2013 demonstrating little to no efficacy of nine figures of ad spend at eBay. http://conference.nber.org/confer/2013/EoDs13/Tadelis.pdf http://conference.nber.org/confer/2013/EoDs13/Tadelis.pdf This may not be true of all ads - ads for little-known brands, for example, may reach people who would have never heard of it. But the bulk of advertising bought by large brands may largely be a waste. Advertisers still spend money because almost nobody is getting paid to rain on the parade. There's an endless stream of ad agencies, paid search marketers, marketing department staff themselves, CMOs, media properties, ad nauseam who are all invested in continuing marketing spend. A CMO will almost never declare that his department is useless. So they continue to make the case for their continued relevance.

mc32 5y ago
Organic mentions are the best ads; aside from that dedicated niche review sites which I’ll hit to look at the review and the comments. On the other hand, brand recognition I do believe has value but is hard to quantify. I also never click on an internet ad EXCEPT if it links to a price -not to buy.
- bscphil 5y ago
  I partially disagree: fake (paid) "organic" mentions and fake reviews are the most effective form of marketing. And, obviously, they're much easier for a company to achieve than the real thing. How unsurprising is it that the most effective class of ad spend is the most scummy? The reason (fake) organic marketing is effective is exactly because it fools people into thinking that it isn't marketing. Take paid Amazon reviews for example. This is advertising, just one of the most scummy possible forms of it. It's effective because people like me look to reviews to provide a third-party take on whether or not a product is any good. If I have a choice between two otherwise equivalent products, I'll pick the one with better reviews. But usually this just means rewarding the company that paid more to "advertise" on Amazon. I realize you're probably talking about "real" organic mentions, but those are growing increasingly harder to find. A good example is the last time I bought headphones. I got suckered by a bunch of small review sites that had either been paid or gotten free samples in exchange for reviews. I bought two pairs, and when they arrived the sound from both was distorted. One pair broke within a few months. It was clearly trash that had been pumped using fake organic marketing. When I went back to find the sites that had provided the reviews in the first place, a few of them did mention (in very tiny print) that the reviews were paid. Me, suckered by advertising?! More likely than you'd think. Back in the day, Johnny Carson reading an ad was convincing to the median consumer because they could be led to believe that the ad really was an endorsement of the product. That doesn't work any more, or not nearly as much at any rate. The basic strategy hasn't changed: it's still an attempt to find someone the consumer will trust. This is why, in my opinion, ads have always been and always will be bad, an attempt to subvert human rationality. Johnny Carson endorsing a product didn't mean that the product was good, it meant he was paid to endorse it. A review site endorsing a product nowadays doesn't mean that the product is good, it means they're paid to endorse it. In both cases the breakdown between what the consumer believes is happening and what is actually happening is the very thing advertising is trying to create, its raison d'être.

jonas21 5y ago

Which do you think is more likely? a. A $300 billion dollar industry is based entirely on a delusion. b. You are an outlier.

analog31 5y ago
c. a portion of the industry is based on a delusion Given that some industries (or movements, ideologies, etc.) could credibly be based on delusions, what do you think is the upper limit for how big such an industry could get?
- pierrefermat1 5y ago
  The ad industry is an easily verifiable one, just go ask any of your small business running friends to see if they have generated more profit than they've spent on ads.
  - analog31 5y ago
    My business has generated more profit than it has spent on ads. ;-)

jonplackett 5y ago

One of the craziest parts is the total lack of accountability. Google / FB just say they show your ad to a XXXX million people. You owe them $XXXX.

runj__ 5y ago
Wouldn't traditional "offline" advertising be even worse? "We suspect X million people watch this TV show (based on highly inaccurate Nielsen ratings) and then stayed around for the ad break, pay XX dollars." "XXX people passed by your billboard, XX saw it, X people visited your website and made a purchase, pay XX dollars."
- jonplackett 5y ago
  At least that's an independent ranking (I presume?) Plus you can go watch TV and see that it's actually been on there. Or walk down the street, or pick up a newspaper.
katzgrau 5y ago
People track conversions - click through URLs contain tracking query params which track the source. If you convert (download a resource, request a demo, start a trial, buy a product) it gets reported back to Facebook. There's definitely accountability. The problem is that you can't always blame FB or Google because maybe your targeting is off, your ad copy sucks, you dumped the user off the front page of your website and they bailed, etc. There's a lot more to performance and accountability.
- jonplackett 5y ago
  If you're only paying for conversions then you should be OK, but paying for clicks is still very common no?

notjustanymike 5y ago

A "successful" ad has a CTR (click through rate) of over 0.2%. Almost no one is clicking on ads.

manigandham 5y ago

First of not every ad is targeted to you. A large majority will just be lightly targeted or remnant inventory where it’s better to show you something than waste an impression. You probably don’t notice the ones that are well targeted because they just work.

swader999 5y ago

Here here. As an exercise, does anyone remember an add they saw today on the web? One they clicked on? I rarely do.