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Imho, the big question here is, if there's actually a trend. Was it easier, 10 years ago, to make money from a website, with just one single (non-animated) ban

by hooby 4y ago

Imho, the big question here is, if there's actually a trend. Was it easier, 10 years ago, to make money from a website, with just one single (non-animated) banner on top, than it is today with a website that's plastered with animated banners, link ads, and other stuff? Was it easier, 10 years ago, to make money from a video platform, with just one single skip-able ad at the start of each video - than it is today with 10 un-skip-able ads in front of each video? Was it easier to advertise your business 100 years ago, with a single poster on a street corner - than it is today with a huge ad-campaign consisting of TV-, Radio- and Newspaper-Ads? The big question to me is: Does advertising become less and less effective the more people are exposed to advertisements? Advertisers are measuring the actual effectiveness of their ads, and paying for that only. Therefore falling effectiveness means falling prices and you have to increase the quantity of ads, to earn the same money (and achieve the same effect) as before. But increased quantity means people are exposed to even more ads, which means they become even less effective. Which leads to even lower prices and even higher quantity. This can't go on forever... at some point the loss of effectiveness is going to be larger than what you can possibly make up for by increasing quantity. And there's an upper limit - you can't push quantity above 60 minutes of ads per hour. This can only end with all users either signing up for premium, leaving the service all-together, or using ad-blockers. In all three cases, the ad-business looses. Are we witnessing the slow death of (online) advertising?

tdeck 4y ago
Does anyone even remember when YouTube had no pre-roll or mid-roll ads at all, only small banner ads? That used to be the thing I liked about YouTube compared to all the other video sites.
ASalazarMX 4y ago
Advertising is immensely wasteful, and its market is already oversaturated, it has to double down each year to get the same returns of last year. Nevertheless, I think we're seeing a cycle, not its death: few ads -> excessive ads -> ad-free options -> repeat
- david38 4y ago
  Many things are wasteful. Trees are wasteful. The plant world could happily live as tall grasses, but because of competition, we now have trees.
eurasiantiger 4y ago
The trend is to mix in the advertising with the content, which is of course created for advertising in mind to begin with.
orangeoxidation 4y ago
> Advertisers are measuring the actual effectiveness of their ads, and paying for that only. Therefore falling effectiveness means falling prices and you have to increase the quantity of ads, to earn the same money (and achieve the same effect) as before. Note there are significant uncertainties in measuring the effectiveness of ads. Measuring click-through rate is comparatively easy, measuring things like brand-recognition doable, measuring how much a specific ad or campaign influences purchasing decisions is quite a hurdle. Predicting it even harder. There have been success stories, but online, especially "personalized", ads might have been somewhat of a bubble. Appearing better than they are?
- hooby 4y ago
  It doesn't have to be super accurate or super certain, for advertisers to catch a general trend. Even if the price adjustments lag significantly behind the actual decrease in effectiveness - the loss of effectiveness will still drive down prices. As for personalized ads - I think the worst is still to come. Right now, most it is just about looking at a person's profile to decide which ad to show to them. But we are getting close to ML being used to actually create individual ads, optimized for each respective viewer.
zeruch 4y ago
"Are we witnessing the slow death of (online) advertising? " Hope springs eternal, but we could also be witnessing the Bladerunner/Transmetropolitanization of advertising.
LaundroMat 4y ago
Good points. I also wonder: - does the overhead cost due to the complexity of advertising (tooling, people, ...) weigh up against the benefits? - isn't tracking and personalization meant to lead to a decrease in quantity and an increase in quality (in the eyes of the advertiser)? And doesn't that mean that the price of an ad placement should be going up instead of down, because the publisher can offer exactly the audience the advertiser wants? It can't but all go up in flames one day. Or at least, that's my hope.
- hooby 4y ago
  There's also the big question, if being exposed to that much advertising as an individual has other (psychological) side-effects as well, rather than just decreasing the effectiveness those ads have on you? After all, ads are intentionally designed to drive compulsion and to manipulate your (purchase) behavior. And personalized advertising is all about knowing and exploiting everyone's weaknesses for more effective manipulations, isn't it?
hotpotamus 4y ago
Did you ever see Idiocracy? It's become hackneyed to say that we're approaching it, but look at the way they handle advertising. Basically the video you watch is just a window surrounded by scrolling advertisement banners. The trend was clear then. Look at shows from the past, a "1 hour" program used to consist of what, 52 minutes? I know it's crept from 48 minutes to 42 last I checked. I even remember reading about online advertising going on 20 years ago - the industry was adding animated or flashing ads - anything to get attention (which saw the rise of ad blockers) and the conventional wisdom was that viewers were like cockroaches; you spray them with a new formula, but eventually they become resistant so you've got to try something else.
- otabdeveloper4 4y ago
  Usually the number of ads per hour is mandated by regulation for traditional media. Youtube will converge to something similar if they want to keep their monopoly status.
  - hotpotamus 4y ago
    Who regulates ads per hour?
    - otabdeveloper4 4y ago
      I assume it's different in every country. Governments and industry know about the problem the grandparent post talks about, and yeah, there's a history of dealing with it in traditional media. Youtube is just another case of "uberization" where a big entity thinks it can skirt regulation just because they're "high-tech" and "disruptive".
- hooby 4y ago
  No, haven't seen Idiocracy (yet) - but I remember seeing a short clip of the ads you mention. If I remember correctly, when I went to university 20+ years ago, "animation blindness" was already a coined term. The idea is, that you can't use animated buttons or icons on your website, because people have become condition to completely ignore anything that moves, and consider it NOT part of the website. So if you do have an animated button, you risk that people will miss that, because anything that looks like an ad becomes sorta invisible to most.
atan2 4y ago
"Are we witnessing the slow death of (online) advertising?" I think so. I don't believe it will die completely, but it will crash big time.
whywhywhydude 4y ago
Just look at auto insurance industry. A significant portion of your premiums is actually spent on advertising. It doesn’t seem like the stupid gecko commercials will ever die. Great podcast on planet money - https://www.npr.org/2022/06/01/1102496094/the-gecko-effect https://www.npr.org/2022/06/01/1102496094/the-gecko-effect
- thehappypm 4y ago
  I definitely recommend listening to that podcast. They make a really good point that insurance is an industry that benefits hugely from advertising, because the competitor products really aren’t all that differentiated from each other.

by hooby 4y ago

tdeck 4y ago

Does anyone even remember when YouTube had no pre-roll or mid-roll ads at all, only small banner ads? That used to be the thing I liked about YouTube compared to all the other video sites.

ASalazarMX 4y ago

Advertising is immensely wasteful, and its market is already oversaturated, it has to double down each year to get the same returns of last year. Nevertheless, I think we're seeing a cycle, not its death: few ads -> excessive ads -> ad-free options -> repeat

david38 4y ago
Many things are wasteful. Trees are wasteful. The plant world could happily live as tall grasses, but because of competition, we now have trees.

eurasiantiger 4y ago

The trend is to mix in the advertising with the content, which is of course created for advertising in mind to begin with.

orangeoxidation 4y ago

> Advertisers are measuring the actual effectiveness of their ads, and paying for that only. Therefore falling effectiveness means falling prices and you have to increase the quantity of ads, to earn the same money (and achieve the same effect) as before. Note there are significant uncertainties in measuring the effectiveness of ads. Measuring click-through rate is comparatively easy, measuring things like brand-recognition doable, measuring how much a specific ad or campaign influences purchasing decisions is quite a hurdle. Predicting it even harder. There have been success stories, but online, especially "personalized", ads might have been somewhat of a bubble. Appearing better than they are?

hooby 4y ago
It doesn't have to be super accurate or super certain, for advertisers to catch a general trend. Even if the price adjustments lag significantly behind the actual decrease in effectiveness - the loss of effectiveness will still drive down prices. As for personalized ads - I think the worst is still to come. Right now, most it is just about looking at a person's profile to decide which ad to show to them. But we are getting close to ML being used to actually create individual ads, optimized for each respective viewer.

zeruch 4y ago

"Are we witnessing the slow death of (online) advertising? " Hope springs eternal, but we could also be witnessing the Bladerunner/Transmetropolitanization of advertising.

LaundroMat 4y ago

Good points. I also wonder: - does the overhead cost due to the complexity of advertising (tooling, people, ...) weigh up against the benefits? - isn't tracking and personalization meant to lead to a decrease in quantity and an increase in quality (in the eyes of the advertiser)? And doesn't that mean that the price of an ad placement should be going up instead of down, because the publisher can offer exactly the audience the advertiser wants? It can't but all go up in flames one day. Or at least, that's my hope.

hooby 4y ago
There's also the big question, if being exposed to that much advertising as an individual has other (psychological) side-effects as well, rather than just decreasing the effectiveness those ads have on you? After all, ads are intentionally designed to drive compulsion and to manipulate your (purchase) behavior. And personalized advertising is all about knowing and exploiting everyone's weaknesses for more effective manipulations, isn't it?

hotpotamus 4y ago

Did you ever see Idiocracy? It's become hackneyed to say that we're approaching it, but look at the way they handle advertising. Basically the video you watch is just a window surrounded by scrolling advertisement banners. The trend was clear then. Look at shows from the past, a "1 hour" program used to consist of what, 52 minutes? I know it's crept from 48 minutes to 42 last I checked. I even remember reading about online advertising going on 20 years ago - the industry was adding animated or flashing ads - anything to get attention (which saw the rise of ad blockers) and the conventional wisdom was that viewers were like cockroaches; you spray them with a new formula, but eventually they become resistant so you've got to try something else.

otabdeveloper4 4y ago
Usually the number of ads per hour is mandated by regulation for traditional media. Youtube will converge to something similar if they want to keep their monopoly status.
- hotpotamus 4y ago
  Who regulates ads per hour?
  - otabdeveloper4 4y ago
    I assume it's different in every country. Governments and industry know about the problem the grandparent post talks about, and yeah, there's a history of dealing with it in traditional media. Youtube is just another case of "uberization" where a big entity thinks it can skirt regulation just because they're "high-tech" and "disruptive".
hooby 4y ago
No, haven't seen Idiocracy (yet) - but I remember seeing a short clip of the ads you mention. If I remember correctly, when I went to university 20+ years ago, "animation blindness" was already a coined term. The idea is, that you can't use animated buttons or icons on your website, because people have become condition to completely ignore anything that moves, and consider it NOT part of the website. So if you do have an animated button, you risk that people will miss that, because anything that looks like an ad becomes sorta invisible to most.

atan2 4y ago

"Are we witnessing the slow death of (online) advertising?" I think so. I don't believe it will die completely, but it will crash big time.

whywhywhydude 4y ago

Just look at auto insurance industry. A significant portion of your premiums is actually spent on advertising. It doesn’t seem like the stupid gecko commercials will ever die. Great podcast on planet money - https://www.npr.org/2022/06/01/1102496094/the-gecko-effect https://www.npr.org/2022/06/01/1102496094/the-gecko-effect

thehappypm 4y ago
I definitely recommend listening to that podcast. They make a really good point that insurance is an industry that benefits hugely from advertising, because the competitor products really aren’t all that differentiated from each other.