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As someone who has worked in AdTech I would respectfully disagree. It is indeed complex but it is incredibly efficient. Also it is irrelevant of whether publish

As someone who has worked in AdTech I would respectfully disagree. It is indeed complex but it is incredibly efficient. Also it is irrelevant of whether publisher earns 75% or 30% of the total revenue. What matters is how much they are earning compared to the next best alternative. Some companies like Google are incredible at this. Google is not a "monopoly" in this space. In fact the world has far too many Google equivalents but absolutely no one comes close to Google in generating top dollars for publishers. I am saying this after working for 10+ years competing against Google.

xmprt 1y ago
Perhaps Google does well for their publishers but do they do well for advertisers? Inherently it seems like it's impossible to do both because what's good for one group is bad for another. Fortunately with healthy competition we solve this problem since alternatives could be used. But since Google is playing both sides and has so much sway over the market, they're able to manipulate things. Even if they're not manipulating things to their benefit, it's still not great to have a single party have so much control.
- PaulHoule 1y ago
  It’s a two-sided market and it doesn’t have to be either/or. Google has a wide range of advertisers so it can find one that converts on your site and it has a wide range of sites so it can find ones that work for a given advertisers. Also Google has a large database and user inventory for personalization so it can find ads that convert on your site even if your site wouldn’t attract ads otherwise. the personalization economy has all sorts of ads and might be brand destroying in the case of retargeting but you see that crap everywhere whereas many Google alternatives run brand-destroying ads and pay you $0.00 after rounding.
- mattmcknight 1y ago
  > Inherently it seems like it's impossible to do both but that is the value of a marketplace, aligning buyers and sellers via the price mechanism
  - oblio 1y ago
    Isn't this decision about Google abusing their marketplace (as all marketplace owners will inevitably do), by pushing their own stuff? Every setup where someone makes the platform and sells stuff built on top of it is inherently abusive. You just don't know when the abuse will come and against whom.
- toast0 1y ago
  > Perhaps Google does well for their publishers but do they do well for advertisers? Inherently it seems like it's impossible to do both because what's good for one group is bad for another. There's certainly some tension between advertisers and publishers, in that advertiser would like to pay less and publishers would like to be paid more; but there's a lot of things an ad exchange can do that are good for both. Selecting ads to display that result in meaningful downstream conversion is good for both advertisers and publishers, because they'll both get paid and maybe something about the user getting something they want too. Showing inappropriate and ineffective ads isn't great for the advertiser, and it might make the publisher money in the near term, but it can drive users away and tends not to be sustainable --- advertisers stop advertising in venues where they don't get results. The value of a good ad exchange for the publisher and the advertiser is when it provides reasonable matching at a lower cost than the parties arranging advertising directly. Possibly some amount of assurances for both sides too --- the exchange should ensure the advertising code and destinations aren't going to compromise the publisher or their user and should ensure that the ads paid for are actually seen (to the degree possible). There's room for the exchange to profit from scale while still being lower cost than self-managed advertising.
CPLX 1y ago
> it is irrelevant of whether publisher earns 75% or 30% of the total revenue Of course it matters if a middleman is skimming off 70% of the revenue in a given market. > it is incredibly efficient On what planet is a loss of 70% of the resources to the matching process between buyers and sellers "incredibly efficient"? > What matters is how much they are earning compared to the next best alternative. Right, which is why it is illegal to prevent there from being a next best alternative via anti-competitive practices which is precisely was was proven in this trial after a detailed examination of the evidence.
- hamp95 1y ago
  > On what planet is a loss of 70% of the resources to the matching process between buyers and sellers "incredibly efficient"? One where the market maker is taking up the cost of providing a market. E.g. Steam takes a 30% cut for providing the infrastructure required to distribute games. Some people/companies can do it for less but it is the best option for a majority of sellers. If the market maker did not the seller would get more revenue but would also eat the cost directly instead of paying someone else to do it.
  - crowcroft 1y ago
    Are you saying that serving ads costs more than running a news site? This also neglects the fact that the programmatic market routes billions of dollars intended to be spent on real media (ad placements on real news websites etc), to fraudulent mobile apps and websites and bot traffic.
    - Jensson 1y ago
      > Are you saying that serving ads costs more than running a news site? Serving the ads is probably much more expensive than serving the news site, since there is a ton of heavy algorithms to determine what ads to show. Total costs for each depends on how much it costed to make the news article so is hard to say.
    - bryan_w 1y ago
ksec 1y ago
Thankfully HN is finally at a stage people can come out and talk about Ad tech without being harassed or attacked. Could you explain more on this. What do you think makes Google Ad or DoubleClick so special? And >What matters is how much they are earning compared to the next best alternative. Correct me if I am wrong, you are suggesting even if publisher only earns 30% of the revenue they still earn more than on other alternative platform?
- adrr 1y ago
  I am on the purchasing side. Google is very efficient when delivering traffic especially their Max Performance product. Probably the cheapest of all platforms. So they are serving relevant ads to users who engage with the ads. This is win for me and I assume also a win for publishers who get revenue due to higher engagement. Also users should benefit because they are getting relevant ads. Linear tv is notorious for non relevant ads like all the drug ads for conditions you don’t have. If you’re forced to see ads, wouldn’t you want ads that are relevant?
  - xnx 1y ago
    This. $1 spent on ads at Google gets a better return for advertisers than that same $1 spent almost anywhere else. For publishers, no one generates more revenue per ad space than Google (without reputation destroying ads).
  - pclmulqdq 1y ago
    No, I personally want to see ads that are as irrelevant as possible. I hate getting a sales pitch forced on me, and would rather see something funny or entertaining showing off an irrelevant product in a clever way than whatever your customers want to shove in front of my eyes. This is why I block all ads, but still appreciate super bowl commercials. And I have discovered that this actually works on me. I like the Nike ads, so on the occasions when I buy sportswear, I have positive feelings about Nike stuff. I spend 100-10000x more on stuff that isn't sportswear, but I think Nike gets more value from me watching that ad than anyone who advertises some "relevant" SaaS product or whatnot.
PaulHoule 1y ago
It was 10 years ago when I was serious about it but I found every monetization venue other than Google was a joke. If you had the right kind of site you could make money with Adult Friend Finder but everything else paid somewhere between 0-10% what Google did and it wasn’t worth the brand destruction that usually resulted.
whiplash451 1y ago
> the world has far too many Google equivalents No it doesn't. As explained by the parent, Google is in a unique position w.r.t to the publishers, the sellers and the bidders. There's a ton of very talented adtech companies out there, but they only get to play an unfair game.
- zombiwoof 1y ago
  I worked at Google on Adtech. I can tell you everybody knew it was an unfair game and illegal. Lots of unrecorded meetings and “no notes taken” sessions
crowcroft 1y ago
In theory, I agree. In practice the whole system is rotten. * Google unilaterally changing bid mechanics raising costs 15% https://finance.yahoo.com/news/google-changed-ad-auctions-raising-191333390.html https://finance.yahoo.com/news/google-changed-ad-auctions-ra... * Conversion attribution and cookie bombing fraud from both Criteo and Steelhouse https://finance.yahoo.com/news/criteo-versus-steelhouse-click-fraud-114843807.html https://finance.yahoo.com/news/criteo-versus-steelhouse-clic... * Phunware click flooding fraud https://www.forbes.com/sites/augustinefou/2021/01/17/ubers-lawsuit-against-ad-fraud-comes-full-circlethey-won/ https://www.forbes.com/sites/augustinefou/2021/01/17/ubers-l... * A nearly unending list of different mobile ad frauds https://www.fraud0.com/resources/ad-fraud-cases-of-the-past-years/ https://www.fraud0.com/resources/ad-fraud-cases-of-the-past-... * Viewability fraud https://www.cnbc.com/2017/01/31/procter-gamble-chief-marketer-slams-crappy-media-supply-chain.html https://www.cnbc.com/2017/01/31/procter-gamble-chief-markete... * Session hijacking fraud https://www.buzzfeednews.com/article/craigsilverman/ad-industry-insiders-are-connected-to-a-fraud-scheme-that https://www.buzzfeednews.com/article/craigsilverman/ad-indus... This doesn't sound like a healthy and efficient industry. Not only do vendors clip the ticket aggressively, they divert dollars that advertisers are intending to go to quality media/real publishers, and siphon it off to fraudulent sites and apps where they generally take a higher margin.
- demadog 1y ago
  [dead]
- econ 1y ago
  I was most impressed by a Google Ad that showed up if you searched for the Dutch tax office. It would only show the name "Tax office" with a free to call phone number under it. Only the hyperlink pointed at a paid number 90 cent per minute. Depending on how busy it is or how exotic your question one can easily be on hold for an hour or two. Then you get the bill and pay 54 euro per hour. Google thought this was a great way to make money. The ad ran forever. Makes you wonder which other phone numbers they highjacked. Would they provide the same service if I copy some website?
  - 1y ago
nitwit005 1y ago
You're absolutely right, publishers are picking Google with cause, but if Google prevented competition, that's not a real choice is it? There has to be some sort of competition for markets to be efficient, and you're essentially suggesting there hasn't been a viable alternative in a decade.
prepend 1y ago
It matters when monopoly forces increase the cost to publishers and thus harms them. It can be great compared to next best and they are still harmed by illegal practices that make it worse off.
InsomniacL 1y ago
> Also it is irrelevant of whether publisher earns 75% or 30% of the total revenue. What matters is how much they are earning compared to the next best alternative. Not if Google illegally monopolizes the market unfairly hindering 'the next best alternative'. > Google is not a "monopoly" in this space. You've made that comment on a post where a judge has ruled "Google is illegally monopolizing"... > In fact the world has far too many Google equivalents but absolutely no one comes close to Google in generating top dollars for publishers. They have not been able to compete in a fair market. This comment has some great examples.. https://news.ycombinator.com/item?id=43719246 https://news.ycombinator.com/item?id=43719246
udev4096 1y ago
Your opinion is biased from the fact that you worked on "adtech". How can you justify it? You are the reason the web is bloated and lost the true idea of it a long time ago. Luckily, there are people who run pi-hole and adguard who have my utmost respect along with countless people who maintain an upto-date ad-block list
Nemo_bis 1y ago
"Efficient" in the pursuit of what purpose?

xmprt 1y ago

Perhaps Google does well for their publishers but do they do well for advertisers? Inherently it seems like it's impossible to do both because what's good for one group is bad for another. Fortunately with healthy competition we solve this problem since alternatives could be used. But since Google is playing both sides and has so much sway over the market, they're able to manipulate things. Even if they're not manipulating things to their benefit, it's still not great to have a single party have so much control.

PaulHoule 1y ago
It’s a two-sided market and it doesn’t have to be either/or. Google has a wide range of advertisers so it can find one that converts on your site and it has a wide range of sites so it can find ones that work for a given advertisers. Also Google has a large database and user inventory for personalization so it can find ads that convert on your site even if your site wouldn’t attract ads otherwise. the personalization economy has all sorts of ads and might be brand destroying in the case of retargeting but you see that crap everywhere whereas many Google alternatives run brand-destroying ads and pay you $0.00 after rounding.
mattmcknight 1y ago
> Inherently it seems like it's impossible to do both but that is the value of a marketplace, aligning buyers and sellers via the price mechanism
- oblio 1y ago
  Isn't this decision about Google abusing their marketplace (as all marketplace owners will inevitably do), by pushing their own stuff? Every setup where someone makes the platform and sells stuff built on top of it is inherently abusive. You just don't know when the abuse will come and against whom.
toast0 1y ago
> Perhaps Google does well for their publishers but do they do well for advertisers? Inherently it seems like it's impossible to do both because what's good for one group is bad for another. There's certainly some tension between advertisers and publishers, in that advertiser would like to pay less and publishers would like to be paid more; but there's a lot of things an ad exchange can do that are good for both. Selecting ads to display that result in meaningful downstream conversion is good for both advertisers and publishers, because they'll both get paid and maybe something about the user getting something they want too. Showing inappropriate and ineffective ads isn't great for the advertiser, and it might make the publisher money in the near term, but it can drive users away and tends not to be sustainable --- advertisers stop advertising in venues where they don't get results. The value of a good ad exchange for the publisher and the advertiser is when it provides reasonable matching at a lower cost than the parties arranging advertising directly. Possibly some amount of assurances for both sides too --- the exchange should ensure the advertising code and destinations aren't going to compromise the publisher or their user and should ensure that the ads paid for are actually seen (to the degree possible). There's room for the exchange to profit from scale while still being lower cost than self-managed advertising.

CPLX 1y ago

> it is irrelevant of whether publisher earns 75% or 30% of the total revenue Of course it matters if a middleman is skimming off 70% of the revenue in a given market. > it is incredibly efficient On what planet is a loss of 70% of the resources to the matching process between buyers and sellers "incredibly efficient"? > What matters is how much they are earning compared to the next best alternative. Right, which is why it is illegal to prevent there from being a next best alternative via anti-competitive practices which is precisely was was proven in this trial after a detailed examination of the evidence.

hamp95 1y ago
> On what planet is a loss of 70% of the resources to the matching process between buyers and sellers "incredibly efficient"? One where the market maker is taking up the cost of providing a market. E.g. Steam takes a 30% cut for providing the infrastructure required to distribute games. Some people/companies can do it for less but it is the best option for a majority of sellers. If the market maker did not the seller would get more revenue but would also eat the cost directly instead of paying someone else to do it.
- crowcroft 1y ago
  Are you saying that serving ads costs more than running a news site? This also neglects the fact that the programmatic market routes billions of dollars intended to be spent on real media (ad placements on real news websites etc), to fraudulent mobile apps and websites and bot traffic.
  - Jensson 1y ago
    > Are you saying that serving ads costs more than running a news site? Serving the ads is probably much more expensive than serving the news site, since there is a ton of heavy algorithms to determine what ads to show. Total costs for each depends on how much it costed to make the news article so is hard to say.
  - bryan_w 1y ago

ksec 1y ago

Thankfully HN is finally at a stage people can come out and talk about Ad tech without being harassed or attacked. Could you explain more on this. What do you think makes Google Ad or DoubleClick so special? And >What matters is how much they are earning compared to the next best alternative. Correct me if I am wrong, you are suggesting even if publisher only earns 30% of the revenue they still earn more than on other alternative platform?

adrr 1y ago
I am on the purchasing side. Google is very efficient when delivering traffic especially their Max Performance product. Probably the cheapest of all platforms. So they are serving relevant ads to users who engage with the ads. This is win for me and I assume also a win for publishers who get revenue due to higher engagement. Also users should benefit because they are getting relevant ads. Linear tv is notorious for non relevant ads like all the drug ads for conditions you don’t have. If you’re forced to see ads, wouldn’t you want ads that are relevant?
- xnx 1y ago
  This. $1 spent on ads at Google gets a better return for advertisers than that same $1 spent almost anywhere else. For publishers, no one generates more revenue per ad space than Google (without reputation destroying ads).
- pclmulqdq 1y ago
  No, I personally want to see ads that are as irrelevant as possible. I hate getting a sales pitch forced on me, and would rather see something funny or entertaining showing off an irrelevant product in a clever way than whatever your customers want to shove in front of my eyes. This is why I block all ads, but still appreciate super bowl commercials. And I have discovered that this actually works on me. I like the Nike ads, so on the occasions when I buy sportswear, I have positive feelings about Nike stuff. I spend 100-10000x more on stuff that isn't sportswear, but I think Nike gets more value from me watching that ad than anyone who advertises some "relevant" SaaS product or whatnot.

PaulHoule 1y ago

It was 10 years ago when I was serious about it but I found every monetization venue other than Google was a joke. If you had the right kind of site you could make money with Adult Friend Finder but everything else paid somewhere between 0-10% what Google did and it wasn’t worth the brand destruction that usually resulted.

whiplash451 1y ago

> the world has far too many Google equivalents No it doesn't. As explained by the parent, Google is in a unique position w.r.t to the publishers, the sellers and the bidders. There's a ton of very talented adtech companies out there, but they only get to play an unfair game.

zombiwoof 1y ago
I worked at Google on Adtech. I can tell you everybody knew it was an unfair game and illegal. Lots of unrecorded meetings and “no notes taken” sessions

crowcroft 1y ago

In theory, I agree. In practice the whole system is rotten. * Google unilaterally changing bid mechanics raising costs 15% https://finance.yahoo.com/news/google-changed-ad-auctions-raising-191333390.html https://finance.yahoo.com/news/google-changed-ad-auctions-ra... * Conversion attribution and cookie bombing fraud from both Criteo and Steelhouse https://finance.yahoo.com/news/criteo-versus-steelhouse-click-fraud-114843807.html https://finance.yahoo.com/news/criteo-versus-steelhouse-clic... * Phunware click flooding fraud https://www.forbes.com/sites/augustinefou/2021/01/17/ubers-lawsuit-against-ad-fraud-comes-full-circlethey-won/ https://www.forbes.com/sites/augustinefou/2021/01/17/ubers-l... * A nearly unending list of different mobile ad frauds https://www.fraud0.com/resources/ad-fraud-cases-of-the-past-years/ https://www.fraud0.com/resources/ad-fraud-cases-of-the-past-... * Viewability fraud https://www.cnbc.com/2017/01/31/procter-gamble-chief-marketer-slams-crappy-media-supply-chain.html https://www.cnbc.com/2017/01/31/procter-gamble-chief-markete... * Session hijacking fraud https://www.buzzfeednews.com/article/craigsilverman/ad-industry-insiders-are-connected-to-a-fraud-scheme-that https://www.buzzfeednews.com/article/craigsilverman/ad-indus... This doesn't sound like a healthy and efficient industry. Not only do vendors clip the ticket aggressively, they divert dollars that advertisers are intending to go to quality media/real publishers, and siphon it off to fraudulent sites and apps where they generally take a higher margin.

demadog 1y ago
[dead]
econ 1y ago
I was most impressed by a Google Ad that showed up if you searched for the Dutch tax office. It would only show the name "Tax office" with a free to call phone number under it. Only the hyperlink pointed at a paid number 90 cent per minute. Depending on how busy it is or how exotic your question one can easily be on hold for an hour or two. Then you get the bill and pay 54 euro per hour. Google thought this was a great way to make money. The ad ran forever. Makes you wonder which other phone numbers they highjacked. Would they provide the same service if I copy some website?
- 1y ago

nitwit005 1y ago

You're absolutely right, publishers are picking Google with cause, but if Google prevented competition, that's not a real choice is it? There has to be some sort of competition for markets to be efficient, and you're essentially suggesting there hasn't been a viable alternative in a decade.

prepend 1y ago

It matters when monopoly forces increase the cost to publishers and thus harms them. It can be great compared to next best and they are still harmed by illegal practices that make it worse off.

InsomniacL 1y ago

> Also it is irrelevant of whether publisher earns 75% or 30% of the total revenue. What matters is how much they are earning compared to the next best alternative. Not if Google illegally monopolizes the market unfairly hindering 'the next best alternative'. > Google is not a "monopoly" in this space. You've made that comment on a post where a judge has ruled "Google is illegally monopolizing"... > In fact the world has far too many Google equivalents but absolutely no one comes close to Google in generating top dollars for publishers. They have not been able to compete in a fair market. This comment has some great examples.. https://news.ycombinator.com/item?id=43719246 https://news.ycombinator.com/item?id=43719246

udev4096 1y ago

Your opinion is biased from the fact that you worked on "adtech". How can you justify it? You are the reason the web is bloated and lost the true idea of it a long time ago. Luckily, there are people who run pi-hole and adguard who have my utmost respect along with countless people who maintain an upto-date ad-block list

Nemo_bis 1y ago

"Efficient" in the pursuit of what purpose?