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"media time" or the amount of time Americans consume media is not rising (6-7 hours a day). So no great new user growth + no great screen time growth. But the A

"media time" or the amount of time Americans consume media is not rising (6-7 hours a day). So no great new user growth + no great screen time growth. But the Ad industry revenues are growing at 15-20%. With a population of ~300 Million the US ad industry generates 400 Billion in revenue. Avg Bounty of >1000 bucks a year per person. The only way to pull that off is to keep injecting more and more ads everywhere and make everything more tempting to watch. The biggest threat to these companies is if time spent consuming media drops.

benjiro 1y ago
Here is my question. Who is paying for it all to get to a 1000 bucks bounty per person / year? The same question, who is paying for all the data collection they do on customers? You keep hearing about xxx billion dollar industries but where is that money coming from? The add and data collection industry in the US is probably a trillion dollar market or more, but ... does it really work? Sure, focused ads on some youtube channel about product that may be of interest, but all the rest is such a mess. I do not buy more stuff because some ads showed up. Sure, they can be informative that there is a new car released, or something like that. But there is no desire to buy XXX cleaning product because they spammed it on TV. Same argument with "what use is getting all my personal data, down to the things we do in bed". Sell it to specific companies? But what do they really gain from it. It does not feel like we are getting better products as a result of all that user data. O, people are not happy about Y product. You do not need invasive data collection for that, you see it in your revenue numbers. It often feels like a lot of industries are just there to self sustain themselves. Nobody ever got fired for buying advertisement or personalized data. So companies keep spending on it, people keep pouring over the data, analyzing it, but its like nobody has common sense and its all a scam that inner feed itself. I am not saying that advertisement does not work to grow a product, but especially unknow one's but the moment product reach a specific mass...
- joules77 1y ago
  When you look at the $$$ on hourly basis rather than yearly it all drops to cents. Basically its become very cheap to flood everyone with ads. And since Attention is a scarce resource we get everyone who wants to capture attention trapped in an arms race for it. The big threat to the whole system is when the amount of time per day people spend consuming media starts to drop thanks to fatigue and finding better things to do.
majormajor 1y ago
You don't need more advertising to get the revenue to keep rising. All you need is two things: 1) a zero-sum game where the amount spent by companies on advertising is less than their profit margin 2) advertising channels that perform in a way that can be correlated with short-term outcomes "We can afford to up our ad spend by 0.5% to try to gain an edge." You juice your market share or total sales numbers for a quarter, everyone is happy. Then your competitor does the same. Assuming your advertising is equally effective, you may have netted out to about where you started. But you've both ratcheted up your spend and likely won't reduce that short of a macro change or parent company health issues. And if certain advertising performs better than others, one company can very well make long-term gains here, if they have writers and producers and talent who are making more compelling pitches. But it still ramps up the total advertising industry spend even with a fixed supply of ad capacity, if it gets a bidding war going. As long as you don't have 100% market share with 0 competitors, advertising will look like a very compelling short-term ROI option. Even if time spent watching media drops it may not squeeze a lot of parts of the advertising sector so hard - it'll just push demand into smaller buckets which will increase the prices for those buckets. Look at the crazy revenue sports television broadcast advertising has been doing as other forms of TV go away with commercial skipping or lower-ad-load streaming. Of course, at SOME point the increases can't be sustained. Even the most profitable products have a limit to how much money could be possibly directed towards advertising. But we don't appear to be particularly close to demand being satisfied.
- nitwit005 1y ago
  I personally suspect in many industries there is a sort of informal agreement about what is reasonable spending on sales and marketing. If any single company spends more, and succeeds in gaining advantage purely by spending more, all their competitors will generally just be forced to follow. But, no one really wants to follow that to the logical conclusion of spending all possible dollars on marketing.
  - majormajor 1y ago
    > But, no one really wants to follow that to the logical conclusion of spending all possible dollars on marketing. Sure, just like nobody wants to spend all possible dollars on rent. But outside of "we just can't afford it anymore" external economic factors shocking the system, the natural incentives point to a slow and constant ratcheting up. IMO this would be a good reason to have further regulations on advertising - locations, frequency, accuracy - since we're gonna be saturated with it otherwise.
whatever1 1y ago
It would be nice if we could cut the middle men and let the companies send us directly checks. I would love to be getting a 1000$ advertising check per year. They pay the same, I will keep buying whatever my friends suggest me to buy. Win - Win

benjiro 1y ago

Here is my question. Who is paying for it all to get to a 1000 bucks bounty per person / year? The same question, who is paying for all the data collection they do on customers? You keep hearing about xxx billion dollar industries but where is that money coming from? The add and data collection industry in the US is probably a trillion dollar market or more, but ... does it really work? Sure, focused ads on some youtube channel about product that may be of interest, but all the rest is such a mess. I do not buy more stuff because some ads showed up. Sure, they can be informative that there is a new car released, or something like that. But there is no desire to buy XXX cleaning product because they spammed it on TV. Same argument with "what use is getting all my personal data, down to the things we do in bed". Sell it to specific companies? But what do they really gain from it. It does not feel like we are getting better products as a result of all that user data. O, people are not happy about Y product. You do not need invasive data collection for that, you see it in your revenue numbers. It often feels like a lot of industries are just there to self sustain themselves. Nobody ever got fired for buying advertisement or personalized data. So companies keep spending on it, people keep pouring over the data, analyzing it, but its like nobody has common sense and its all a scam that inner feed itself. I am not saying that advertisement does not work to grow a product, but especially unknow one's but the moment product reach a specific mass...

joules77 1y ago
When you look at the $$$ on hourly basis rather than yearly it all drops to cents. Basically its become very cheap to flood everyone with ads. And since Attention is a scarce resource we get everyone who wants to capture attention trapped in an arms race for it. The big threat to the whole system is when the amount of time per day people spend consuming media starts to drop thanks to fatigue and finding better things to do.

majormajor 1y ago

You don't need more advertising to get the revenue to keep rising. All you need is two things: 1) a zero-sum game where the amount spent by companies on advertising is less than their profit margin 2) advertising channels that perform in a way that can be correlated with short-term outcomes "We can afford to up our ad spend by 0.5% to try to gain an edge." You juice your market share or total sales numbers for a quarter, everyone is happy. Then your competitor does the same. Assuming your advertising is equally effective, you may have netted out to about where you started. But you've both ratcheted up your spend and likely won't reduce that short of a macro change or parent company health issues. And if certain advertising performs better than others, one company can very well make long-term gains here, if they have writers and producers and talent who are making more compelling pitches. But it still ramps up the total advertising industry spend even with a fixed supply of ad capacity, if it gets a bidding war going. As long as you don't have 100% market share with 0 competitors, advertising will look like a very compelling short-term ROI option. Even if time spent watching media drops it may not squeeze a lot of parts of the advertising sector so hard - it'll just push demand into smaller buckets which will increase the prices for those buckets. Look at the crazy revenue sports television broadcast advertising has been doing as other forms of TV go away with commercial skipping or lower-ad-load streaming. Of course, at SOME point the increases can't be sustained. Even the most profitable products have a limit to how much money could be possibly directed towards advertising. But we don't appear to be particularly close to demand being satisfied.

nitwit005 1y ago
I personally suspect in many industries there is a sort of informal agreement about what is reasonable spending on sales and marketing. If any single company spends more, and succeeds in gaining advantage purely by spending more, all their competitors will generally just be forced to follow. But, no one really wants to follow that to the logical conclusion of spending all possible dollars on marketing.
- majormajor 1y ago
  > But, no one really wants to follow that to the logical conclusion of spending all possible dollars on marketing. Sure, just like nobody wants to spend all possible dollars on rent. But outside of "we just can't afford it anymore" external economic factors shocking the system, the natural incentives point to a slow and constant ratcheting up. IMO this would be a good reason to have further regulations on advertising - locations, frequency, accuracy - since we're gonna be saturated with it otherwise.

whatever1 1y ago

It would be nice if we could cut the middle men and let the companies send us directly checks. I would love to be getting a 1000$ advertising check per year. They pay the same, I will keep buying whatever my friends suggest me to buy. Win - Win