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what I find strange is that selling ads makes more money than selling service. Because at the end the people watching the ads are buying the stuff advertised so

what I find strange is that selling ads makes more money than selling service. Because at the end the people watching the ads are buying the stuff advertised so those who adverstise have more money for advertising…. So for it to be rentable people have to buy way more than the ad revenue google makes. If spending for google ads is 1% of bussines budget and budget has to be at least Revenue……..with 280 billion revenue for google it would be 280.000.000.000.000 that we as humans have to spend for stuff that was advertised on google so someone pays google for ads so they can run google search etc …. 35 dollar is maybe ok… …. Maybe better than spending 3500$ on … I dont know … stuff is good also ..

deleted 4y ago
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aflag 4y ago
If you show an ad for a car that costs $100k to 1000 users and a single user buys it (0.1%) you still sold a car for $100k. Let's say it costs $90k to make it. You could pay $5 per ad displayed and still made a profit. My point is, the people who actually buy the products are actually paying for the other people who can't afford it. So, the model doesn't rely on everyone buying a keyring from a car dealership, but on most people not buying anything, and a couple buying a car. In a sense, that model is better at distributing income, because everyone gets a service and the people who can afford pay for everything. If everything was behind paywalls, people who can afford would have all the nice services and people who can't, will have nothing. What's interesting is that "targeted ads" is a bit of a misnomer. It's more of an ads ranking, where the user is shown the ads they are most likely to buy. However, from the point of view of the car dealership, when they think targeted ads, they would like their ads to be shown only to people who will likely buy the car. No company would want their ads shown to someone with no disposable income, yet, they will be shown some ad.
ZephyrBlu 4y ago
They're selling distribution. Why is it strange to you that distribution is valued so highly? In a lot of ways it's more valuable than a product.
philwelch 4y ago
Advertising is kind of a backdoor price discrimination in that way. If you can afford to spend $10,000,000, people will advertise wealth management services to you. If you can afford to spend $1, McDonalds will advertise their dollar menu to you.

deleted 4y ago

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aflag 4y ago

If you show an ad for a car that costs $100k to 1000 users and a single user buys it (0.1%) you still sold a car for $100k. Let's say it costs $90k to make it. You could pay $5 per ad displayed and still made a profit. My point is, the people who actually buy the products are actually paying for the other people who can't afford it. So, the model doesn't rely on everyone buying a keyring from a car dealership, but on most people not buying anything, and a couple buying a car. In a sense, that model is better at distributing income, because everyone gets a service and the people who can afford pay for everything. If everything was behind paywalls, people who can afford would have all the nice services and people who can't, will have nothing. What's interesting is that "targeted ads" is a bit of a misnomer. It's more of an ads ranking, where the user is shown the ads they are most likely to buy. However, from the point of view of the car dealership, when they think targeted ads, they would like their ads to be shown only to people who will likely buy the car. No company would want their ads shown to someone with no disposable income, yet, they will be shown some ad.

ZephyrBlu 4y ago

They're selling distribution. Why is it strange to you that distribution is valued so highly? In a lot of ways it's more valuable than a product.

philwelch 4y ago

Advertising is kind of a backdoor price discrimination in that way. If you can afford to spend $10,000,000, people will advertise wealth management services to you. If you can afford to spend $1, McDonalds will advertise their dollar menu to you.