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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

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.

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.