4 ms·

After selling costs, regulatory costs, and handing over the bulk of revenue to publishers, Google's yield on this third party ad inventory must be below 10%. Gl

After selling costs, regulatory costs, and handing over the bulk of revenue to publishers, Google's yield on this third party ad inventory must be below 10%. Globally it's less than 15% of Google's total ad revenue overall. What's the point of being in this business? You're making a lot of powerful people angry for almost zero profit.

kevingadd 5y ago
Maybe the point isn't to make money, but to occupy space in the market and boost their power in other markets as a result.
- otherotherchris 5y ago
  If they want to "occupy space" they could just roll out an ad blocker into Chrome. Nuke all 3rd party advertising from orbit. I'm sure they could find a way to make youtube ads unskipable.
  - black_puppydog 5y ago
    Wow now there's an interesting thought experiment. As much as I'd love to see a real adblocker in chrome (even though I don't use it) I guess you could read that as "near-monopoly producer of browser software uses their market force to gain an upper-hand in a different branch of their business." That reads like a textbook anti-trust lawsuit :P
    - deleted 5y ago
      [deleted]
jefftk 5y ago
> What's the point of being in this business? Search depends on having sites to link people to, and those sites primarily use ads for monetization. If Google shut down their display advertising business, web publishers overall would make far less money in the short term, and it's not clear how long recovery would take. Disclosure: I work at Google on display ads, speaking only for myself -- I don't know what the company's strategy is here.
- skinkestek 5y ago
  Recently I have been using Marginalia a bit. Surprisingly often not only do I find usable results with Marginalia but even better results. A good deal of what Marginalia does different[1] seems to be to strongly prefer pages with less ads and tracking. Sadly for Google and happily for me and others there is an amazing amount of good content that surfaces once you peel away the cookie cutter, maximum ad, maximum tracking web sites. For now we need some of those ad filled pages but if the marked changes I am fairly sure most of them will adapt or be replaced. [1]: besides being a real search engine instead of vector search or whatever it is Google and Bing does that feeds me with several non-matches in every search. Edit, I got a downvote and while I don't care about the exact points I guess it is because someone think I exaggerate wildly, so here is a challenge, try to repeat this search in your favorite mainstream engine and see what results you get: https://search.marginalia.nu/search?query=windows+linux+dual+boot+&profile=yolo&js=default https://search.marginalia.nu/search?query=windows+linux+dual...
- dmitriid 5y ago
  > Google shut down their display advertising business, web publishers overall would make far less money in the short term, and it's not clear how long recovery would take. I would ask for an independent study to confirm this. On the surface at least this sounds unlikely (to put it mildly).
  - jefftk 5y ago
    If you remove a large component of publisher revenue, the total will go down in the short term. That doesn't seem like a very strong claim?
    - dmitriid 5y ago
      > If you remove a large component of publisher revenue 1. If you remove Google Ads it doesn't mean other ad systems disappear 2. Google has been caught red handed preventing other ad platforms from competing. https://www.axios.com/google-facebook-conspired-manipulate-ad-auctions-states-lawsuit-1ef8d50f-1891-4cf3-8399-3487ad66588a.html https://www.axios.com/google-facebook-conspired-manipulate-a... 3. Google was caught overcharging advertisers and pocketing the difference https://www.marketwatch.com/story/alphabet-and-facebook-ceos-colluded-in-online-ad-sales-scheme-unredacted-antitrust-lawsuit-alleges-11642205787 https://www.marketwatch.com/story/alphabet-and-facebook-ceos... It's quite possible that if Google Ads go away, it will be a net positive for the system.
onion2k 5y ago
If Google aren't selling them then someone else will, and that means someone else is building marketshare and using the profit to grow. That represents a threat to Google's main ad business. The last thing Google want is for an advertiser or a pubisher to use a separate service for part of their inventory, because that means someone else has direct access to their customer.
- otherotherchris 5y ago
  Google's main ad business is on Google owned properties. Always has been. The biggest existential threat to Google is that Google has abandoned management focus on developing it's core offerings (Search, Cloud, Maps, GSuite, GMail, Messaging) to fight stupid antitrust battles with the EU over a tiny slither of profit in a completely irrelevant side business. Reputational damage alone is driving away huge amounts of Cloud and GSuite business.
mathteddybear 5y ago
Sure there might have been no profit in making gay doodles for Putin. With ads, "almost" zero profit turns out to be a unicorn sized I guess. If we have to stick to that shallow judgement. On the other side of a spectrum is "we make world wide web a better place by funneling advertiser spend towards quality websites". True story.

kevingadd 5y ago

Maybe the point isn't to make money, but to occupy space in the market and boost their power in other markets as a result.

otherotherchris 5y ago
If they want to "occupy space" they could just roll out an ad blocker into Chrome. Nuke all 3rd party advertising from orbit. I'm sure they could find a way to make youtube ads unskipable.
- black_puppydog 5y ago
  Wow now there's an interesting thought experiment. As much as I'd love to see a real adblocker in chrome (even though I don't use it) I guess you could read that as "near-monopoly producer of browser software uses their market force to gain an upper-hand in a different branch of their business." That reads like a textbook anti-trust lawsuit :P
  - deleted 5y ago
    [deleted]

jefftk 5y ago

> What's the point of being in this business? Search depends on having sites to link people to, and those sites primarily use ads for monetization. If Google shut down their display advertising business, web publishers overall would make far less money in the short term, and it's not clear how long recovery would take. Disclosure: I work at Google on display ads, speaking only for myself -- I don't know what the company's strategy is here.

skinkestek 5y ago
Recently I have been using Marginalia a bit. Surprisingly often not only do I find usable results with Marginalia but even better results. A good deal of what Marginalia does different[1] seems to be to strongly prefer pages with less ads and tracking. Sadly for Google and happily for me and others there is an amazing amount of good content that surfaces once you peel away the cookie cutter, maximum ad, maximum tracking web sites. For now we need some of those ad filled pages but if the marked changes I am fairly sure most of them will adapt or be replaced. [1]: besides being a real search engine instead of vector search or whatever it is Google and Bing does that feeds me with several non-matches in every search. Edit, I got a downvote and while I don't care about the exact points I guess it is because someone think I exaggerate wildly, so here is a challenge, try to repeat this search in your favorite mainstream engine and see what results you get: https://search.marginalia.nu/search?query=windows+linux+dual+boot+&profile=yolo&js=default https://search.marginalia.nu/search?query=windows+linux+dual...
dmitriid 5y ago
> Google shut down their display advertising business, web publishers overall would make far less money in the short term, and it's not clear how long recovery would take. I would ask for an independent study to confirm this. On the surface at least this sounds unlikely (to put it mildly).
- jefftk 5y ago
  If you remove a large component of publisher revenue, the total will go down in the short term. That doesn't seem like a very strong claim?
  - dmitriid 5y ago
    > If you remove a large component of publisher revenue 1. If you remove Google Ads it doesn't mean other ad systems disappear 2. Google has been caught red handed preventing other ad platforms from competing. https://www.axios.com/google-facebook-conspired-manipulate-ad-auctions-states-lawsuit-1ef8d50f-1891-4cf3-8399-3487ad66588a.html https://www.axios.com/google-facebook-conspired-manipulate-a... 3. Google was caught overcharging advertisers and pocketing the difference https://www.marketwatch.com/story/alphabet-and-facebook-ceos-colluded-in-online-ad-sales-scheme-unredacted-antitrust-lawsuit-alleges-11642205787 https://www.marketwatch.com/story/alphabet-and-facebook-ceos... It's quite possible that if Google Ads go away, it will be a net positive for the system.

onion2k 5y ago

If Google aren't selling them then someone else will, and that means someone else is building marketshare and using the profit to grow. That represents a threat to Google's main ad business. The last thing Google want is for an advertiser or a pubisher to use a separate service for part of their inventory, because that means someone else has direct access to their customer.

otherotherchris 5y ago
Google's main ad business is on Google owned properties. Always has been. The biggest existential threat to Google is that Google has abandoned management focus on developing it's core offerings (Search, Cloud, Maps, GSuite, GMail, Messaging) to fight stupid antitrust battles with the EU over a tiny slither of profit in a completely irrelevant side business. Reputational damage alone is driving away huge amounts of Cloud and GSuite business.

mathteddybear 5y ago

Sure there might have been no profit in making gay doodles for Putin. With ads, "almost" zero profit turns out to be a unicorn sized I guess. If we have to stick to that shallow judgement. On the other side of a spectrum is "we make world wide web a better place by funneling advertiser spend towards quality websites". True story.