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A lot of on-line businesses created in the last ten years would not be profitable without the ability to grow their customer base. Anyone selling products speci

by bertil 5y ago

A lot of on-line businesses created in the last ten years would not be profitable without the ability to grow their customer base. Anyone selling products specialised enough to only be relevant for 10% of a demographic group or less.

LegitShady 5y ago
those businesses could have operated through any other large platform. 'the ability to grow their customer base' is more dependent on their business than on which platform they advertise. Google and apple can target users for you too. Facebook just happens to not do anything but social media and ads.
kodah 5y ago
> Anyone selling products specialised enough to only be relevant for 10% of a demographic group or less. The question from here is, without Facebook could that have happened? Does Facebook's ecosystem contribute to this success? Does it also contribute to a lack of competitors in this space?
- bertil 5y ago
  What space exactly? Individual niches are not as interesting because you might think that the market for your calligraphy kit is a forum for Japanese speakers (10% conversion rate, 10k people largest forum) but Manga-watchers have a much better potential (2%, 5M). It’s easy to assume who your niche is, but almost every campaign is a surprise. This is why Custom Audience powers most ads. Therefore your market is a service that knows about many people’s niche interest, but is itself quite generic: that’s Wordpress·com (freemium, not interested in ads), reddit (not good at monetisation for a long time), twitter (same delay), GMail to some extend and much later Slack, Discord, maybe SnapChat and TikTok. There is a duopoly in ads platforms because there’s a duopoly in effective ideas that scale to any support and any advertiser: keyword (Google) and personalisation. Many platforms have tried to base ads on the content of the page, but it’s hard to find ads that pair well with the war in Darfur. Many YouTube creators get away with promoted content, but it is murky more often than not. The most successful “editorial” attempt is OutBrain and Taboola that are essentially auto-generated articles with super-optimised clic-bait-y garbage. You can imagine hosting that information yourself, edit it, expose it to ad slots in your browser with a protocol. Dave Winner certainly dreams of it. But for me, the proof that this could work was Facebook letting anyone edit their ad preference and information: for years, you could just tell Facebook that you were _not_ into cars, baby clothes or stamp collection. No one used it. It was linked on every ad; you were linked to it if you right-clic to say an ad wasn’t relevant; it was easily findable on the website and the app… No one touched it. So much so that improving it was impossible without traffic. Privacy advocate who claimed this needed to exist ignored my comments when I told them it already did. There was major internal support for it, but even VPs can’t argue against data. You can look at the history: Facebook was created in 2004; they immediately had ads, but they only became a significant player on targeting from 2008 onwards. At that point, ads had been around since 1995 with Viaweb, so more than 15 years; Google had been around for since 1998, so 10 years and the acquisition that created AdWords five years earlier in 2003. If an alternative direction was easy, there was time to build something. I’m not saying another reality isn’t possible — I dream of a protocol emerging from Facebook opening its preference embeddings, after realising that there’s a worthwhile ecosystem of apps to let people optimise it the way they want. But not enough people wanted it, while billions of people seem comfortable with delegating decisions and targeting entirely.
peterthehacker 5y ago
This argument I’m very skeptical of. The pre-Facebook internet was niched. Lots of sites for all sorts of subcultures. Online businesses that were relevant to <=10% of the population would advertise on the sites that cater to their niche. Facebook ads as a distribution channel is all that we know in this day and age. Who knows whether online small businesses would be better or worse with a different paradigm.
KittenInABox 5y ago
I'm part of several specialized groups, so much so that Facebook ads are actually too broad for me. If you're a specialist you're definitely going on a specific board for it, with Facebook communities only good for general buy/sell hobbies. (I'm more likely to benefit from a reddit dedicated specific kinds of pens than I am to benefit from a facebook dedicated to the same.)
dillondoyle 5y ago
+1 this. HN always writes off, and even when they have no experience, claim FB & targeted ads aren't effective even in the face of proof and examples of individual HNers Politics is an example of this change too. The big obvious nefarious. But to your example gives big boost to small campaigns. I think also (i can't prove obviously) allowing more progressive candidates to raise and win by growing support nationwide to win in District.

by bertil 5y ago

LegitShady 5y ago

those businesses could have operated through any other large platform. 'the ability to grow their customer base' is more dependent on their business than on which platform they advertise. Google and apple can target users for you too. Facebook just happens to not do anything but social media and ads.

kodah 5y ago

> Anyone selling products specialised enough to only be relevant for 10% of a demographic group or less. The question from here is, without Facebook could that have happened? Does Facebook's ecosystem contribute to this success? Does it also contribute to a lack of competitors in this space?

bertil 5y ago
What space exactly? Individual niches are not as interesting because you might think that the market for your calligraphy kit is a forum for Japanese speakers (10% conversion rate, 10k people largest forum) but Manga-watchers have a much better potential (2%, 5M). It’s easy to assume who your niche is, but almost every campaign is a surprise. This is why Custom Audience powers most ads. Therefore your market is a service that knows about many people’s niche interest, but is itself quite generic: that’s Wordpress·com (freemium, not interested in ads), reddit (not good at monetisation for a long time), twitter (same delay), GMail to some extend and much later Slack, Discord, maybe SnapChat and TikTok. There is a duopoly in ads platforms because there’s a duopoly in effective ideas that scale to any support and any advertiser: keyword (Google) and personalisation. Many platforms have tried to base ads on the content of the page, but it’s hard to find ads that pair well with the war in Darfur. Many YouTube creators get away with promoted content, but it is murky more often than not. The most successful “editorial” attempt is OutBrain and Taboola that are essentially auto-generated articles with super-optimised clic-bait-y garbage. You can imagine hosting that information yourself, edit it, expose it to ad slots in your browser with a protocol. Dave Winner certainly dreams of it. But for me, the proof that this could work was Facebook letting anyone edit their ad preference and information: for years, you could just tell Facebook that you were _not_ into cars, baby clothes or stamp collection. No one used it. It was linked on every ad; you were linked to it if you right-clic to say an ad wasn’t relevant; it was easily findable on the website and the app… No one touched it. So much so that improving it was impossible without traffic. Privacy advocate who claimed this needed to exist ignored my comments when I told them it already did. There was major internal support for it, but even VPs can’t argue against data. You can look at the history: Facebook was created in 2004; they immediately had ads, but they only became a significant player on targeting from 2008 onwards. At that point, ads had been around since 1995 with Viaweb, so more than 15 years; Google had been around for since 1998, so 10 years and the acquisition that created AdWords five years earlier in 2003. If an alternative direction was easy, there was time to build something. I’m not saying another reality isn’t possible — I dream of a protocol emerging from Facebook opening its preference embeddings, after realising that there’s a worthwhile ecosystem of apps to let people optimise it the way they want. But not enough people wanted it, while billions of people seem comfortable with delegating decisions and targeting entirely.

peterthehacker 5y ago

This argument I’m very skeptical of. The pre-Facebook internet was niched. Lots of sites for all sorts of subcultures. Online businesses that were relevant to <=10% of the population would advertise on the sites that cater to their niche. Facebook ads as a distribution channel is all that we know in this day and age. Who knows whether online small businesses would be better or worse with a different paradigm.

KittenInABox 5y ago

I'm part of several specialized groups, so much so that Facebook ads are actually too broad for me. If you're a specialist you're definitely going on a specific board for it, with Facebook communities only good for general buy/sell hobbies. (I'm more likely to benefit from a reddit dedicated specific kinds of pens than I am to benefit from a facebook dedicated to the same.)

dillondoyle 5y ago

+1 this. HN always writes off, and even when they have no experience, claim FB & targeted ads aren't effective even in the face of proof and examples of individual HNers Politics is an example of this change too. The big obvious nefarious. But to your example gives big boost to small campaigns. I think also (i can't prove obviously) allowing more progressive candidates to raise and win by growing support nationwide to win in District.