5 ms·

I disagree with a lot of this post. This analysis breaks down because the transition from IBM->Microsoft->Smartphone companies was because of newer and better

by temuze 12y ago

I disagree with a lot of this post. This analysis breaks down because the transition from IBM->Microsoft->Smartphone companies was because of newer and better technology. Native ads hardly fit this category. In fact, if you think about it, search ads are native ads! Just like sponsored Buzzfeed articles, search ads on Google pretend to be content. In some ways, it's like they're the ultimate native ad because they're close to what you expected to see when you typed in that query. They aren't annoying, they're very relevant and they're easy to buy. > IBM didn’t capitalize on PCs because their skills lay on the hardware side, not software. Microsoft didn’t capitalize on mobile because they emphasized compatibility, not the user experience. And now Google is dominant when it comes to the algorithm, but lacks the human touch needed for social or viral content. Google has expanded way beyond search ads and everything in the internet is their batting zone. They own: - DoubleClick, the biggest ad server on the Internet - Youtube, the biggest platform for videos - Display Network, the largest contextual network of display ads on the internet Google isn't going away any time soon.

jrkelly 12y ago
Agree - commercials as "30 or 60 second fully produced dramas" is laughable. Native ads can fall to wide adoption of AdBlock. It's like commercial skipping on DVRs. The only "ads" that make sense long term are things like AMZN rankings. That's what GOOG needs to fear. Ads that are valuable to the user because they can't be bought - that breaks the business model.
- ryandvm 12y ago
  That's a great line of thought. The worst possible future for Google is that the bottom drops out on the valuation of their product - paid ads. The only way that happens is that somebody figures out how to deliver the same quality of advertising at a much lower price point (perhaps a company that isn't employing quite so many PhDs or bankrolling so many moon shots). Or alternatively, somebody comes up with a much higher quality product. Frankly neither of those seem particularly out of reach.
  - Animats 12y ago
    The only way that happens is that somebody figures out how to deliver the same quality of advertising at a much lower price point. No, the way that happens is that somebody figures out how to deliver the same services at a lower price point, i.e. with fewer ads. As the cost of computing declines, it becomes cheaper to do what Google or Facebook does. You could probably do Facebook now as a paid no-ads service for about $1/month on your phone bill. We're starting to see new social networks that aren't ad-based. So far, they're somewhat narrow in focus - Ricochet for right-wingers, Ello for drag queens, etc. Maybe someone will figure out a way to federate them into one big interlinked network without the thing becoming a spam magnet. (Diaspora was supposed to do this, but they make GitHub look user-friendly.) Remember what happened to Myspace. Ad revenue started to drop, ad density was increased to compensate, users became fed up and left, company went into a screaming dive and was sold cheaply. Who's in that position now? Twitter? Facebook? Pinterest? We're probably closer to "peak social" than "peak search".
- dabei 12y ago
  AdBlock is not going to kill Advertising, because most publishers have no better ways to monetize. If AdBlock continue to rise they will have to invest in detecting AdBlock and refuse to serve content when their ads are blocked.
  - numbsafari 12y ago
    And that's already happening. If you embed JS necessary to finish delivering the content (or make it visible) along with the Assets for an ad, then Adblock also blocks the content.
    - jthol 12y ago
      I've never understood why you wouldn't proxy the ads through the server providing the content. No more domain black holes.
      - gohrt 12y ago
        Because the X,000 ad servers are far more technically competent at ad serving than the X,000,000 content servers.
    - zem 12y ago
      at which point people give up on your page and go elsewhere.
      - numbsafari 12y ago
        I've stopped watching the Daily Show and Colbert from their respective web sites for that very reason.
  - biehl 12y ago
    Its hard to imagine that this is a war advertisers can win. Just as with DRM, you cant win with a concept of wanting to control content on a platform that is not 101% locked down. Browsers are not locked down. The best advertisers can hope for is that users are too lazy to block. Or they can be smart and provide "ads" that provide some kind of value like contextual search result etc.
- temuze 12y ago
  Nah, as adblock becomes more popular, there will be more effort taken on the part of publishers to detect ad blockers. It really isn't hard to detect. If an asset didn't go through, it was probably blocked. You're already starting to see with Hulu.
  - ASneakyFox 12y ago
    Its not hard to detect. Its just hard to reconcile. Hulu can block service since they already have your 10 dollars. And you're unlikely to go elsewhere. there's not many other services streaming new episodes of your favorite sitcom. But free services and websites ( you know the stuff that's supposed to be ad supported) typically value user traffic over ad revenue. Especially if they're still in the growing phase, or if there's lots of easy alternatives to your service (the case of YouTube). They wouldn't want to risk you hopping over to another service.
- rudimental 12y ago
  I wish AMZN rankings couldn't be bought (or Yelp reviews). I am less naive about their accuracy than I used to be. There are too many stories about manipulation to believe them without a little skepticism.
x0x0 12y ago
The author explicitly said google isn't going away any time soon. The doubleclick exchange is, to first order, direct response. Not brand. The rise of mobile has not been particularly profitable for google. It's not clear that google's strength -- direct response -- will translate well to mobile. Google's cpc has been falling -- though simpson's paradox makes this difficult to interpret. Google is, btw, seriously threatened by amazon, though that isn't mentioned in this article. Google's business is to tax ecommerce; the rise of amazon as a shopping destination where, particularly with prime, you don't search anywhere else cuts google out. Hence their initiatives like delivery.
- necubi 12y ago
  DoubleClick for Advertisers (DFA) is the largest real-time ad bidding platform on the web. It serves >25B display ads a day, and does a significant amount of brand advertising. Very little of display advertising these days is direct response. It's common for display ads to have click-through rates in the range of a few per million impressions.
  - temuze 12y ago
    Yes, programmatic ads far outweigh direct response ads in terms of number of impressions. However, the real money is in direct response! Those ads on Yahoo or WSJ's homepage? That's the result of a guy picking up a phone and saying "wanna buy my homepage for X $100,000 or X $1,000,000 per day?" Direct response is basically a way of artificially reducing supply on the most valuable properties.
- temuze 12y ago
  > Google's business is to tax ecommerce Not necessarily! As brand advertising becomes more important, E-Commerce is only going to be a small slice of the online advertising pie in the future. The most expensive advertising deals on the planet, Superbowl Commercials, aren't about instant action. Coca-Cola doesn't pay millions expecting you to go out immediately and buy a coke. You're going to see less ads about "click here to buy this now" and more ads like "Company Y: remember us!"
justicezyx 12y ago
B school graduates talking about accurate analogy... Better to pretend to be joking...
kreinba 12y ago
Can't agree more!

by temuze 12y ago

jrkelly 12y ago

Agree - commercials as "30 or 60 second fully produced dramas" is laughable. Native ads can fall to wide adoption of AdBlock. It's like commercial skipping on DVRs. The only "ads" that make sense long term are things like AMZN rankings. That's what GOOG needs to fear. Ads that are valuable to the user because they can't be bought - that breaks the business model.

ryandvm 12y ago
That's a great line of thought. The worst possible future for Google is that the bottom drops out on the valuation of their product - paid ads. The only way that happens is that somebody figures out how to deliver the same quality of advertising at a much lower price point (perhaps a company that isn't employing quite so many PhDs or bankrolling so many moon shots). Or alternatively, somebody comes up with a much higher quality product. Frankly neither of those seem particularly out of reach.
- Animats 12y ago
  The only way that happens is that somebody figures out how to deliver the same quality of advertising at a much lower price point. No, the way that happens is that somebody figures out how to deliver the same services at a lower price point, i.e. with fewer ads. As the cost of computing declines, it becomes cheaper to do what Google or Facebook does. You could probably do Facebook now as a paid no-ads service for about $1/month on your phone bill. We're starting to see new social networks that aren't ad-based. So far, they're somewhat narrow in focus - Ricochet for right-wingers, Ello for drag queens, etc. Maybe someone will figure out a way to federate them into one big interlinked network without the thing becoming a spam magnet. (Diaspora was supposed to do this, but they make GitHub look user-friendly.) Remember what happened to Myspace. Ad revenue started to drop, ad density was increased to compensate, users became fed up and left, company went into a screaming dive and was sold cheaply. Who's in that position now? Twitter? Facebook? Pinterest? We're probably closer to "peak social" than "peak search".
dabei 12y ago
AdBlock is not going to kill Advertising, because most publishers have no better ways to monetize. If AdBlock continue to rise they will have to invest in detecting AdBlock and refuse to serve content when their ads are blocked.
- numbsafari 12y ago
  And that's already happening. If you embed JS necessary to finish delivering the content (or make it visible) along with the Assets for an ad, then Adblock also blocks the content.
  - jthol 12y ago
    I've never understood why you wouldn't proxy the ads through the server providing the content. No more domain black holes.
    - gohrt 12y ago
      Because the X,000 ad servers are far more technically competent at ad serving than the X,000,000 content servers.
  - zem 12y ago
    at which point people give up on your page and go elsewhere.
    - numbsafari 12y ago
      I've stopped watching the Daily Show and Colbert from their respective web sites for that very reason.
- biehl 12y ago
  Its hard to imagine that this is a war advertisers can win. Just as with DRM, you cant win with a concept of wanting to control content on a platform that is not 101% locked down. Browsers are not locked down. The best advertisers can hope for is that users are too lazy to block. Or they can be smart and provide "ads" that provide some kind of value like contextual search result etc.
temuze 12y ago
Nah, as adblock becomes more popular, there will be more effort taken on the part of publishers to detect ad blockers. It really isn't hard to detect. If an asset didn't go through, it was probably blocked. You're already starting to see with Hulu.
- ASneakyFox 12y ago
  Its not hard to detect. Its just hard to reconcile. Hulu can block service since they already have your 10 dollars. And you're unlikely to go elsewhere. there's not many other services streaming new episodes of your favorite sitcom. But free services and websites ( you know the stuff that's supposed to be ad supported) typically value user traffic over ad revenue. Especially if they're still in the growing phase, or if there's lots of easy alternatives to your service (the case of YouTube). They wouldn't want to risk you hopping over to another service.
rudimental 12y ago
I wish AMZN rankings couldn't be bought (or Yelp reviews). I am less naive about their accuracy than I used to be. There are too many stories about manipulation to believe them without a little skepticism.

x0x0 12y ago

The author explicitly said google isn't going away any time soon. The doubleclick exchange is, to first order, direct response. Not brand. The rise of mobile has not been particularly profitable for google. It's not clear that google's strength -- direct response -- will translate well to mobile. Google's cpc has been falling -- though simpson's paradox makes this difficult to interpret. Google is, btw, seriously threatened by amazon, though that isn't mentioned in this article. Google's business is to tax ecommerce; the rise of amazon as a shopping destination where, particularly with prime, you don't search anywhere else cuts google out. Hence their initiatives like delivery.

necubi 12y ago
DoubleClick for Advertisers (DFA) is the largest real-time ad bidding platform on the web. It serves >25B display ads a day, and does a significant amount of brand advertising. Very little of display advertising these days is direct response. It's common for display ads to have click-through rates in the range of a few per million impressions.
- temuze 12y ago
  Yes, programmatic ads far outweigh direct response ads in terms of number of impressions. However, the real money is in direct response! Those ads on Yahoo or WSJ's homepage? That's the result of a guy picking up a phone and saying "wanna buy my homepage for X $100,000 or X $1,000,000 per day?" Direct response is basically a way of artificially reducing supply on the most valuable properties.
temuze 12y ago
> Google's business is to tax ecommerce Not necessarily! As brand advertising becomes more important, E-Commerce is only going to be a small slice of the online advertising pie in the future. The most expensive advertising deals on the planet, Superbowl Commercials, aren't about instant action. Coca-Cola doesn't pay millions expecting you to go out immediately and buy a coke. You're going to see less ads about "click here to buy this now" and more ads like "Company Y: remember us!"

justicezyx 12y ago

B school graduates talking about accurate analogy... Better to pretend to be joking...

kreinba 12y ago

Can't agree more!