> "In the first quarter of 2016, 85 cents of every new dollar spent in online advertising will go to Google or Facebook, said Brian Nowak, a Morgan Stanley analyst."
emphasis on new dollar, and in context appears to refer to their advertising networks, not the companies themselves.
Right. That's one of those vague numbers; what's a "new dollar"? Increased advertising spend over last year?
Here are somewhat harder numbers, from the Internet Advertising Bureau.[1] 72% of ad spend goes to the top 10 players. The IAB doesn't break that down further. Pew does, but their data is a year behind.[2]
Google and Facebook haven't quite curb-stomped everybody else yet. Together, they have maybe half the online ad market.
The whole online advertising ecosystem, with supply side platforms, demand side platforms, auctions, and all that is becoming irrelevant. Google and Facebook sell direct and don't play in those systems.
We've changed the title from "85 cents of every $1 spent in online advertising goes to Google or Facebook" to that of the article.
Submitters: it's against the HN guidelines to pick one detail from an article and make that the title. That's a form of editorializing. Please use the original title unless it is misleading or linkbait. If you wish to say which detail you find important, do so by commenting in the thread. That way your interpretation is on the same level as everyone else's.
The more sad part is people posting links from outside Facebook less. I have always been against Facebook for the simple reason that it is a way to coral the Web. And it is slowly but surely happening. Yes some people will hold out for privacy or other reasons but I fear soon most will soon will move inside Facebook and no longer be accessible outside it.
I am against facebook because I don't think we should entrust a company that earns money by knowing everything about it's users with a substantial share of human to human communications.
I think you have to be a special kind of crazy not to consider that a problem.
I feel like there's no way they aren't working together and sharing that information. I view mattresses on Amazon, and Facebook shows me mattress ads a few minutes later. I post a link on Facebook, and everywhere I go, I see ads related to that link.
What I said of course also applies to google. I don't use google either (or at least, I go out of my way not to), and I try to minimize my use of any service where I'm the product.
What happens is that content follows the money. If we do not want content to be a puppet to advertisement, it is on us to create a different revenue stream.
Advertisement is an ok answer to the financial support problem of content. However, it has a serious flaw: It caters to masses rather well, and to niches very poorly. I like to think that a direct revenue flow (from readers to writers) would create strong incentives for more niche content. Investigative journalism, independent tech reviews; stuff that is desperately needed but not consumed by the masses.
Is is on us, techies. We can go down the ad-blocking arms race or we can go down the new business models race. One is destructive, the other is constructive.
Sorry but how is sharing a link to my followers on Twitter, or my close friends on Facebook different from sharing a link on Hacker News?
Original content will always want to be free to make as much money as it can. NYTimes for example will publish a URL for sharing, but also have an Apple News exclusive URI that forces you in that app sandbox.
One thing I love about Facebook sharing is the commentary and comments below the content.
Every dollar I spend with Google is painful because it is defending a brand name or something else that I already rank first for.
Spending with Facebook is negative ROI for me. I get much better results creating fake users and integrating into networks of people to send occasional adverts.
Is this so different than traditional advertising? It's not like the reason Coca-Cola keeps spending money is because no one knows about their product.
I recently tried out reddit ads and got a pretty good CTR with a CPC of $0.05, which I think is pretty good (perhaps I'm just crazy naive, I'm not a marketer). Have to find the right niche sub-reddit though.
It won't hit. Most people just won't pay for content, but publishers have to make money. If ad-blocker use continues to rise, everything will simply go native. It means more clickbait article titles with even less thinly-veiled ads masquerading as legitimate content.
The current native advertising model, where advertisers negotiate individually with each site where they want content to be posted, will quickly evolve into a more efficient AP-style network. Companies will submit articles into a feed that will be disseminated to and automatically displayed on revenue and content-hungry sites across the Internet. Sites will be compensated on a CPM or CPC basis.
Ads are not going anywhere. They will just take a slightly different form.
Did everyone go to the native model when ad-pocalypse hit e-mail and everyone started to use spam filters?
Current ad-blocks are similar to blacklists. They are very basic, but they do get the vast majority of unsolicited advertisement, so it works. I remember the days when some argued that you only needed to block chines IP ranges in order to stop spam.
Then the world started to use content filtering, looking for specific words or statistically pattern that provide a probability patter for spam vs ham. I would predict that a AP-style network that automatically submit articles into multiple "spammy" websites would automatically be flagged by anti-spam organizations and thus be quickly blocked.
Native ads is also currently in a bit of a problem with tax and customer protection laws. That might just be growing pains however.
>Did everyone go to the native model when ad-pocalypse hit e-mail and everyone started to use spam filters?
Actually, yes. Everyone started creating opt-in email newsletters. The smarter marketers started creating niche newsletters that appeared to not be associated with any particular brand, then worked in mentions of their benefactors everywhere they could. That's native advertising.
Even more tracking in ads? Ad-companies make most money on tracking and profiling than on actual ads. I'll stay with uBlock and PB for longer probably.
> Ad-companies make most money on tracking and profiling than on actual ads.
This is a bit too much over the top, where it concerns tin-foil hat fashion. Ad companies track and profile so that they can show you ads. There's no secret campaign there. Just plain basic ad target segmentation. They do make money on ads -- they're ad companies, not profiling companies.
Sure, the grid only knows where you live, if you own or rent, size of your household, when you're home or away.
Heck with a bit of data mining on "smart meters", I bet you could infer the energy usage of certain appliances such as hair dryer, curling iron, stove, etc., starting to give insight into age, gender, ethnicity, eating habits, you name it. By itself that data will only generate weak correlations, but I'd certain that energy companies are finding buyers for that data who could match it with your credit report, background check, etc.
Face it, the only thing protecting your anonymity is your lack of notoriety.
But the company does know who you are, they have a meter on the side of your home that measures how much electricity you use, they know your address and often your banking information...
The "grid" might not (i'm not even sure what that means?), but in this case the website doesn't know who you are, the ad itself doesn't know who you are (especially because it's not shown), only the ad-network-provider knows who you are.
Trust works differently selling electricity. At each step in the chain from generation to distribution to consumption everyone involved can easily measure what they're getting. This means that each entity only needs information about the entities that it buys from or sells to. With ads this sort of verification is far harder, and passing lots of information back from the browser to each party involved is the only way the industry has figured out for keeping fraud down.
There's actually a weird way that control over your devices and privacy on your devices are at odds here: if your device was running signed code from the ground up, where you were given a browser and had no ability to modify anything, then we could build an ad system that leaked no information to the various ad industry companies but still let them be sure that a view was a real view and a click was a real click. But of course we do want to be able to control the software we run, and we successfully rejected trusted computing for most uses in the '00s, so instead we have all this tracking.
Yes, this requires user to be logged-in, so you have to use your account do it. You can remove or don't save cookies for regular ads, block 3rd party domains, etc. In this type of ad you're signing yourself for tracking and profiling.
This is so desperately needed. Or (better), a Spotify-style flatrate (which would encourage consumption that doesn't cost the publisher but is a benefit for the reader).
It's the one remaining hope for quality journalism, but apparently they need to stare into the abyss before they get their act together. That, or it needs a mass extinction first until it is obvious that the supply of original content is visibly reduced (unlike now, where about 10-15 publications produce excellent content and thousands turn it into autogenerated slideshow).
This is exactly what they probably need. To meet up and develop a joint payment that includes them all. No one wants to pay for 25 different websites content.
There is a far bigger and more important issue. It's that people do not have time to read "news". Besides hacker news, witch is free. People don't care what happens in the world or around them.
I can see this happening hand-in-hand with the ad-pocalypse. Have a micropayment system associated with ad blockers. It can use the same revenue flow as ads.
For every thousand (suppressed) impressions, pay a dollar to the site. Sites, who are now actively blocking ad blockers, can stop blocking and get similar revenue. Users, who do not want ads, can get that experience without the guilt associated with freeloading.
All it takes is for one major browser vendor to take the first step.
Mozilla, are you listening? Microsoft, this is how you undermine adwords.
Is that honestly a surprise to anyone at this point? Sure Facebook I might not fully understand, but at least it's highly targeted, even if it may not generate revenue for the advertiser.
Most of the companies buying ads are in the business of sell "actual products", which means that you need the catch the buyer when their in a buying mood. There's little point in trying to peddle my goods on Mashable, people simply aren't in the right mindset at that point.
Google on the other hand, that's where people go to find the sellers, reviews and specifications. It makes a ton more sense to do your advertising in that setting.
Sure ad blockers might be hurting the revenue of online media companies, but that only because they've taken ads to such a ridicules extreme. It made no sense to try to sell me a TV and lure me into online poker when I'm reading a news article. It just contributed to my desire to kill of those ads.
In some cases, Facebook advertising has proven to be quite profitable. I know some Pakistanis who have created pages to sell imported jewelries and other similar stuff to Pakistani Facebook users. They run FB ad campaigns to promote their products. Now, Pakistani market is lot different than US and other countries. If its cheap and free delivery, people will buy it.
I think Facebook advertising is very effective. First, it is very targeted. Yes, Zuck lets us use any information a person has on their profile to target them. Oh, you work at the media company with 900 employees that I want to work for, let me target each person who works there with an ad. They didn't think that was funny or the comment I made when they made it clear they weren't interested about how, although the number of women working at the company is equal to the number of men, the men working their tended to be much older meaning there was probably a serious wage gap. (I'm still looking for a job BTW). To be fair I mentioned that it might not be their fault. It is possible that instead of a bunch of young women between the ages of 18 and 35 being hired at the company 10 or 15 years ago, young men were being hired who are now in management. Whereas the increase in young women at the company will lead to more women being in management in the next 15 years than men. (I didn't really say that to them, but I thought it.) [1]
Facebook wants advertisers to show relevant ads to people so people with ads that are shared, interacted with, and commented on, get a discount on the price of that ad. Facebook would love it if the ads on peoples' profiles were higher quality than friends' posts. A big reason people purchase GQ and Vogue magazines is for the ads not just the editorial content. Also, taking the time to target people who really care about a product or service makes it much cheaper to sell ads on Facebook. If I wanted to promote a new Japanese restaurant in a 20 mile radius from the restaurant, I'd create an audience of people who liked the local Japanese garden. Who else cares about that demographic? Nobody. So it's cheap.
I would not be surprised if one day people go to Facebook for the ads like they do fashion magazines to find out all the new products and services that they might be interested in to help them at work, at home, or at play.
Turns out that people who are interested in Hindi, Tamil, and Telugu languages in the US and Canada are probably English speakers interested in a second or third language. So their results are correct. Facebook Ads Manager is like any other computer program. It does exact what you tell it to do. Rather than selecting an audience of English speakers they might have had more success selecting the ~45,000 people in the United States and Canada[1] who like the largest Indian news website.[2]
Notice how the size of the audience is almost the same as the number of likes of the page? My guess the reason why the audience is larger is because people who have unliked the page after liking it are still included. Facebook ad manager is very, very accurate at targeting only people who have liked a page, for example, only people who liked the Candlebox band page or any information people have put in their personal profile like having attended Stanford University.
I've tested it. It is very accurate. I've made a post and targeted 300 people who I know or interact with in real life. The post got close to 20 likes and lots of comments but everyone interacting with it was in the audience I selected. I've done a few other tests too and I always only get interaction with people in the audience.
Could anyone explain, what's a "new dollar" in this context? Is it those $8.500 from company X that have increased their budget from $100.000 to $110.000?
I read it as meaning new choices of where to spend the money. In other words excluding spends that have already been contractually committed, but I suppose it might mean growth in ad spending. In other words 85% of ad spend growth will go that way.
Ad clicks cost, sometimes. But sometimes they send a positive quality signal resulting in reduced costs to run that ad in the future.
(Or then again you might. Because you'll screw up their A/B testing stats. Or you might not. Because if they have half a brain they'll be running conversion testing anyway and they'll easily spot a high-CTR, low-CVR ad. Or...)
>But in recent weeks, what had been a simmering worry among publishers has turned into borderline panic.
the words "into borderline panic" are a link, but to the same article. Does this mean that the author didn't write the link, but some editor added it, in this case after the article was published? (And accidentally added a link pointing to it.) Or, how can this happen?
I had always thought that the NYTimes authors added their own links as part of their writing style. It would be interesting if instead this were a survival tactic exposed at the top of this story...
The advertising market needs to be made similar to the stock exchange. Current situation is similar to the NYSE asking for a 85% commission on every stock transaction. The middlemen need to be removed...An advertiser should have direct access to the relevant consumer audience with a non-commercial facilitator.
Fwiw, at $DayJob we spend a substantial amount of money on Google ads and get reliable return of ~5% greater than the ad spend [ignoring repeat business].
Forbes.com detects your adblocker and will deny you access to their content. Except if you instruct your browser to use a UserAgent string like GoogleBot does: then suddenly, you are can read the articles.
Yes. Changed from "85 cents of every $1 spent in online advertising goes to Google or Facebook". I'm not sure whether that was an earlier NYT title (they do this), but if not, the submission violated the HN guidelines by rewriting a title when it was neither linkbait nor misleading.
> "In the first quarter of 2016, 85 cents of every new dollar spent in online advertising will go to Google or Facebook, said Brian Nowak, a Morgan Stanley analyst."
emphasis on new dollar, and in context appears to refer to their advertising networks, not the companies themselves.