To some extent I disagree with this, not that Google+Meta are under attack, but that the threat is coming from competitors.
I’ve spent most of the last 10 years earning my living from an e-commerce business I own. The online advertising industry is unrecognisable from when we started. My thesis, in beef, is that the industries excessive uses of personalised data and tracking lead to increased regulation, and then a massive pivot to even more “AI” as a means to circumvent that (to some extent). The AI in the ad industry now, I believe, is detrimental to the advertiser. It’s now just one big black box, you put money in one side and get traffic out the other. The control and useful tracking (what actual search terms people are using, proper visible conversion tracking of an ad) is now almost non-existent. As an advertiser your livelihood is dependant on an algorithm, not skill, not intuition, not experience, not even track record.
Facebook, Google and the rest of the industry were so driven by profit at all cost, and at the expense of long term thinking, they shot themselves in the foot.
Advertisers are searching for alternatives, but they are all the same.
I think online advertising, as a whole, is probably f***ed…
‘Microsoft’s social network, LinkedIn, is unglamorous but its business-to-business ads allow it to monetise the time users spend on it at a rate roughly four times that of Facebook, estimates Andrew Lipsman of eMarketer. It generates more revenue than some medium-sized networks including Snap’s Snapchat and Twitter. <...> So far [Apple] is only dabbling in ads and does not report sales figures. But Bloomberg reported recently that Apple’s ad business was already generating sales of $4bn a year, making it about as big an ad platform as Twitter.’
Twitter is now a unit of being moderately unsuccessful at advertising.
I work in online search and recently expanded. In my opinion there are two major threats to Google and Facebook (I.e., ads related threats):
1. Platform power: Apple was a key supplier to Facebook in the sense that they provide platform driving a significant % of their Ads revenue. With Apple tightening privacy they have become an indirect but significant threat to Facebook. Google is relatively safe.
2. Threat of substitutes: as seen in Amazon, Ecom platforms are much closer to the customer. Us timer is about to make a purchase. I think over time Advertisers will eventually shift to platforms like amazon, Etsy etc so that can reach the customer right when they are about to make a purchase. Some what same appeal with snap and TikTok.
Overall online ad industry will continue to flourish but will see big changes in who are the big players.
If you search for socks and someone shows you a promoted ad for socks, you are likely trading relevance for money as the best sock for that person is unlikely to be the most promoted one. This works in the short term but ultimately what should happen (and currently doesn't) is users then use a search or retail platform that gives them more relevant results.
Second is using my search for socks elsewhere on the platform. This is essentially using user-data outside of the intent it was given and that should be controllable by the user and default to the most conservative option without annoying dialogue boxes or other harassment. Whether it's within the platform or not shouldn't make a difference.
So competition is good, but unfortunately what I'm taking away from this that companies are going to bake more ads into their products because the products themselves aren't seeing much competitive pressure (except maybe for Meta and rightfully so).
The advertising duopoly is a crown with no kingdom in 2022. Online advertising is dead - most people online aren't worth advertising too. This isn't 2010 when most people online were from wealthy countries. Google and Facebook are having a harder and harder time finding high-net-worth individuals to advertise too, because they all use adblock or avoid the open internet, preferring to stick to walled gardens like reddit and tiktok (which serve their own ads).
Misleading title. The heading implies both Google and Meta are threatened, but the article discusses the emerging competition to Meta, like Snapchat, Tiktok, and Apple. There is no mention of a search competitor to Google. There is no mention of any concrete threat to Google from the competition, either, other than implying they will also be affected by the general trend.
Google may very well face competition from device manufacturers and the like, but this article does not provide any details about it whatsoever.
All that geographically relevant advertising could go back to how it was before Facebook/Google became the only way to do it. It seem an easy-enough solution to me.
There are always threats, but these companies being paranoid, are always on the lookout for competitors. Facebook in the past had success defusing the threat by simply copying the competitor's app verbatim (Snapchat) and is trying to repeat this by altering both Facebook and Instagram to work like TikTok.
The reason I see TikTok as a threat is largely because the company ignores all the rules and regulations that protect the privacy of minors and adults alike and companies will want that data regardless. Facebook won't be able to supply it to them since it has to abide by our laws.
OTOH TikTok being based in a nations that's a strategic competitor to the U.S. may well mean the company is simply banned. IMHO it would be more fortuitous for Meta and Google to lobby for a ban. Fighting TikTok will not work.
Everyone here likely works for a company that advertises.
It might be in our individual best interest to have super effective advertising (for increased revenue), but it might be in the world’s interest to not allow that, because effective advertising leads to consumption… (and for privacy reasons,etc.)
One reason I’m highly skeptical to claims of monopolies, especially in an industry as dynamic and volatile as tech, is in 5 years you already have competition from new upstarts (TikTok) and old hands (Apple and Amazon) that makes claims of digital advertising “dominance” by Google and Meta outdated. The monopoly claims were suspicious from the beginning but now it looks pretty absurd.
The claims of monopoly have always been political. The only company that comes close to a monopoly is Apple due to them locking out third-party apps on their phones.
A somewhat tangential question. Why is Alphabet not decoupling Google from Google Ads / Google AdSense? Having Google’s name constantly in the news cycle because of their ad practices has ruined their reputation (deservingly). Wouldn’t a separate legal entity also be a safer approach from the legal perspective in the light of the ongoing antitrust investigations?
Because Google would then become a business with virtually no revenue - and no chance of producing revenue. Even though Alphabet itself would remain just as profitable, a business organization can't survive long if its goals are not in some ways associated with producing revenue, by the nature of how corporate politics work.
Somebody always brings this point up so it might as well be me this time - but does advertising work at all, particularly online advertising?
I refuse to believe I'm some kind of one of a kind special snowflake, but whenever I wanna buy something cheap or disposable, like food, socks etc. I just see it and buy it.
On the other hand when I'm looking for something I'm planning to get a bit more mileage out of, like a laptop, a pair of headphones or a cordless drill, I usually read the reviews and buy the product I think is most appropriate for me, not what the ads show.
This is a great question and one which is quite difficult to answer.
One place to start on the difficulties is an excellent paper by Lewis and Rao from the Quarterly Journal of Economics in 2015. The original title was something like: “on the impossibility of measuring the returns to advertising.” Just getting enough data to reject the hypothesis “this ad campaign did nothing” is extremely challenging. Lewis is a great producer of research on this topic and has written papers based on his experience at Yahoo.
Another great paper is by Blake, Nosko and Tadelis from Econométrica in… 2014? They turned off all of eBay’s keyword search ads in some markets as an experiment. They found that they maintained about 95%+ of their business while saving $50 eBay million dollars or so.
Beware confident assertions from people in the ad industry that ads clearly work. It is not so obvious that they do. This isn’t to say they don’t work! But it’s a challenging scientific question.
It works. It works a lot better than you think. My biggest mistake was relying on organic traffic. Once I switched to paid ads business went 10x. Don’t assume everyone is like you, you are the 1% of the 1% of the 1%. Majority people follow ads that’s why it still exists.
This is true of regular advertising too: many people think they're immune to it. Corporations wouldn't spend billions if it wasn't effective.
That being said, I tend to agree with you in the sense that I never buy the obscure products that are recommended to me on FB/Google.
On the other hand, I think paying YouTubers to promote products is super effective. People are extremely receptive to influencers recommending products, esp. when it doesn't seem like advertising.
When you "see it" and if you not going just by cheapest price, one of the things you might go by is "familiarity" (for products in the same space that are similarly priced). That "familiarity" which introduces a sense of "maybe it's good" because you've seen it mentioned many times is sometimes introduced by the advertising of the product you constantly see as you go around the Internet. All that happens prior to you actually buying the product.
The hacker news audience is definitely in a minority demographic of highly tech literate people. You may not always realize it, but just by being in this community and participating in our discussions you are miles ahead of many other people.
While we may identify and scroll past all sponsored google results (or even use adblockers or custom host files to block certain actors, etc) most other people are not at the same level of computer sophistication and won't necessarily do the same. Ads get clicked a lot.
Online advertising is far, far better than other forms. Marketers can tie individual sales to specific ads and improve ads by making them more like successful ones. This kind of specificity isn't possible with TV or print ads.
what the ads show
A good chunk of advertising is "brand awareness" not necessarily just selling one product. The point of brand awareness is to associate your brand with its brand values in a person's mind.
I thought I was basically immune to ads. Well, other than the "customers were also interested in" ones on Amazon that come up specifically when I'm already looking for a particular type of product. That of course has the opportunity to be exceptionally well targeted.
But I did notice a couple I'd fallen for. I happened to see Harry's Razors and Tommy John underwear in a store. They are heavily advertised on podcasts -- go to the online shop, the host will say, put in the code, get it shipped blah blah, your face and/or balls will feel nice. Somehow as a result they'd gotten into a mental niche in my brain as "things that would otherwise require jumping through annoying hoops to get," so when I saw them in a store, I ended up grabbing them. Because getting them otherwise would have been annoying. Yes in retrospect I recognize how silly this thought process was.
The razors I've been using for a while. They are basically fine I think -- which is to say, you only really notice is a razor is really shitty, and they aren't, so I'll call that a win. Just got the underwear recently, no notes yet.
Having worked in ads, yes. People click through and purchase, and in numbers sufficient to make the whole ordeal make sense. Granted I worked in ads at Amazon, on their platforms (Kindle and retail), and for items sold on Amazon, so they were winning no matter what happened. The sellers were doing good too though, with many repeat customers, and not enough inventory to satisfy them all.
What I've personally noticed is that for people like us ("special snowflakes"), the ads still work but at a subconscious level. When you are evaluating products in your "research" phase, you aren't doing a completely unbiased analysis. You have picked up brand names and products in the background as you browse the internet and when it comes to making that 50/50 call in the end, you will likely go with brands that you subconsciously trust. There's another way where ads work which I call "incessant bombarding". I would not have heard of Vrbo if they didn't have a massive campaign on Youtube where almost every video I watched for 3-4 months in 2022 had a Vrbo ad on it.
When you research a new product, on what platform is it the review hosted and do the reviewers make a living out of reviews?
I believe that that the line between advertising and reviews are increasingly blurred
“advertising” is not just the obvious obnoxious youtube preroll ads and flashy popups. Sponsored products, in content product placement, adjusted and paid ranking, it takes so many more forms.
Also a lot of people won’t be able to make the distinction between an ad entry and an organic entry in a listing. I’ve mistakenly hit ads, and might be hitting some here and there without realizing it, and I would bet you do too.
That’s part of why legit businesses have to buy ads for their own product to avoid having a competitors eating up their result page and getting all the misplaced hits.
You may not be a special snowflake, but you're not exactly common either I'd wager.
During lockdown I found several fantastic butchers who decided to launch a delivery service to reach more people through ads on Facebook. I'm still a regular customer.
For things that are available in a supermarket, brand advertising is better, for smaller businesses operating online, ads do indeed work.
I worked at one of the worlds biggest travel search companies. The guy who was in charge of PPC for our region reckoned that if they turned off Google search ads then the company would lose 70% of revenue. It’s probably even worse now that Google has taken over the SERPs for anything travel related.
What I find most amusing is the amazon and brand ads I see on Facebook.
Amazon is trying to sell me dental office equipment, or specialized restaurant tools, and a dozen other things that few outside of a particular area of expertise would remotely consider. It’s bizarre.
Some products or services primarily exist through ads. We ran local events, and eventually advertised them. Once we ran ads, we had to upgrade our conference hotel reservations on average from 3 rooms to 12 or so.
There was a promotion like 25% off on Thermomix. For a week only. I wanted one, but I naturally distrust campaigns that urges yoi to buy in a short time.
If it's a duopoly, why do websites like this one ask me to consent to twenty thousand different ad networks?
Of course that's not what the article means, but it's interesting that Google, Meta and TikTok are described as advertising giants when their products ostensibly serve different purposes. I wasn't aware they were comfortable with being so mask-off about the actual nature of what they are, namely vehicles to generate ad impressions.
The article is based on… nothing? And a bit of TikTok mania? I thought this was really low quality in essence - providing no real proof for any substantial change.
I’ve never really understood how such a large portion of google’s revenues are derived from search. I’ve rarely clicked on any ads when using google or any other search engine.
YouTube, in my opinion, is far more effective as users are forced to watch 5 second ads prior to watching the video that they are interested in. 5 seconds is too short to context switch and can also convey a lot of information.
No has mentioned Subprime Attention Crisis yet. It’s worth reading. The whole thing is a hyper-inflated, opaque house of cards, and its collapse will cause a lot of pain.
[+] [-] 13324|3 years ago|reply
[+] [-] samwillis|3 years ago|reply
I’ve spent most of the last 10 years earning my living from an e-commerce business I own. The online advertising industry is unrecognisable from when we started. My thesis, in beef, is that the industries excessive uses of personalised data and tracking lead to increased regulation, and then a massive pivot to even more “AI” as a means to circumvent that (to some extent). The AI in the ad industry now, I believe, is detrimental to the advertiser. It’s now just one big black box, you put money in one side and get traffic out the other. The control and useful tracking (what actual search terms people are using, proper visible conversion tracking of an ad) is now almost non-existent. As an advertiser your livelihood is dependant on an algorithm, not skill, not intuition, not experience, not even track record.
Facebook, Google and the rest of the industry were so driven by profit at all cost, and at the expense of long term thinking, they shot themselves in the foot.
Advertisers are searching for alternatives, but they are all the same.
I think online advertising, as a whole, is probably f***ed…
[+] [-] macleginn|3 years ago|reply
Twitter is now a unit of being moderately unsuccessful at advertising.
[+] [-] seshagiric|3 years ago|reply
1. Platform power: Apple was a key supplier to Facebook in the sense that they provide platform driving a significant % of their Ads revenue. With Apple tightening privacy they have become an indirect but significant threat to Facebook. Google is relatively safe.
2. Threat of substitutes: as seen in Amazon, Ecom platforms are much closer to the customer. Us timer is about to make a purchase. I think over time Advertisers will eventually shift to platforms like amazon, Etsy etc so that can reach the customer right when they are about to make a purchase. Some what same appeal with snap and TikTok.
Overall online ad industry will continue to flourish but will see big changes in who are the big players.
[+] [-] siliconc0w|3 years ago|reply
Second is using my search for socks elsewhere on the platform. This is essentially using user-data outside of the intent it was given and that should be controllable by the user and default to the most conservative option without annoying dialogue boxes or other harassment. Whether it's within the platform or not shouldn't make a difference.
So competition is good, but unfortunately what I'm taking away from this that companies are going to bake more ads into their products because the products themselves aren't seeing much competitive pressure (except maybe for Meta and rightfully so).
[+] [-] nixcraft|3 years ago|reply
[1] https://www.makeuseof.com/windows-11-remove-ads/
[2] https://www.bloomberg.com/news/newsletters/2022-08-14/apple-...
[+] [-] phendrenad2|3 years ago|reply
[+] [-] pdevr|3 years ago|reply
Google may very well face competition from device manufacturers and the like, but this article does not provide any details about it whatsoever.
[+] [-] mensetmanusman|3 years ago|reply
https://arstechnica.com/gadgets/2022/08/small-businesses-cou...
Apple accidentally attacked small businesses that used to rely on geographically relevant advertising by increasing privacy protection.
There is no easy solution here.
[+] [-] wussboy|3 years ago|reply
[+] [-] UltraViolence|3 years ago|reply
The reason I see TikTok as a threat is largely because the company ignores all the rules and regulations that protect the privacy of minors and adults alike and companies will want that data regardless. Facebook won't be able to supply it to them since it has to abide by our laws.
OTOH TikTok being based in a nations that's a strategic competitor to the U.S. may well mean the company is simply banned. IMHO it would be more fortuitous for Meta and Google to lobby for a ban. Fighting TikTok will not work.
[+] [-] DethNinja|3 years ago|reply
Real-Life ads became competitive with internet advertising. In fact, they might be better for a large number companies.
Unless they can manage to guarantee that ads are being seen by real humans, I think their revenue will keep dropping.
[+] [-] mensetmanusman|3 years ago|reply
It might be in our individual best interest to have super effective advertising (for increased revenue), but it might be in the world’s interest to not allow that, because effective advertising leads to consumption… (and for privacy reasons,etc.)
[+] [-] seibelj|3 years ago|reply
[+] [-] rabuse|3 years ago|reply
[+] [-] cush|3 years ago|reply
[+] [-] encryptluks2|3 years ago|reply
[+] [-] hey2022|3 years ago|reply
[+] [-] tsimionescu|3 years ago|reply
[+] [-] torginus|3 years ago|reply
I refuse to believe I'm some kind of one of a kind special snowflake, but whenever I wanna buy something cheap or disposable, like food, socks etc. I just see it and buy it.
On the other hand when I'm looking for something I'm planning to get a bit more mileage out of, like a laptop, a pair of headphones or a cordless drill, I usually read the reviews and buy the product I think is most appropriate for me, not what the ads show.
[+] [-] huitzitziltzin|3 years ago|reply
One place to start on the difficulties is an excellent paper by Lewis and Rao from the Quarterly Journal of Economics in 2015. The original title was something like: “on the impossibility of measuring the returns to advertising.” Just getting enough data to reject the hypothesis “this ad campaign did nothing” is extremely challenging. Lewis is a great producer of research on this topic and has written papers based on his experience at Yahoo.
Another great paper is by Blake, Nosko and Tadelis from Econométrica in… 2014? They turned off all of eBay’s keyword search ads in some markets as an experiment. They found that they maintained about 95%+ of their business while saving $50 eBay million dollars or so.
Beware confident assertions from people in the ad industry that ads clearly work. It is not so obvious that they do. This isn’t to say they don’t work! But it’s a challenging scientific question.
[+] [-] cryptoegorophy|3 years ago|reply
[+] [-] yodsanklai|3 years ago|reply
That being said, I tend to agree with you in the sense that I never buy the obscure products that are recommended to me on FB/Google.
On the other hand, I think paying YouTubers to promote products is super effective. People are extremely receptive to influencers recommending products, esp. when it doesn't seem like advertising.
[+] [-] grok22|3 years ago|reply
[+] [-] naet|3 years ago|reply
While we may identify and scroll past all sponsored google results (or even use adblockers or custom host files to block certain actors, etc) most other people are not at the same level of computer sophistication and won't necessarily do the same. Ads get clicked a lot.
[+] [-] bolt7469|3 years ago|reply
Online advertising is far, far better than other forms. Marketers can tie individual sales to specific ads and improve ads by making them more like successful ones. This kind of specificity isn't possible with TV or print ads.
what the ads show
A good chunk of advertising is "brand awareness" not necessarily just selling one product. The point of brand awareness is to associate your brand with its brand values in a person's mind.
[+] [-] bee_rider|3 years ago|reply
But I did notice a couple I'd fallen for. I happened to see Harry's Razors and Tommy John underwear in a store. They are heavily advertised on podcasts -- go to the online shop, the host will say, put in the code, get it shipped blah blah, your face and/or balls will feel nice. Somehow as a result they'd gotten into a mental niche in my brain as "things that would otherwise require jumping through annoying hoops to get," so when I saw them in a store, I ended up grabbing them. Because getting them otherwise would have been annoying. Yes in retrospect I recognize how silly this thought process was.
The razors I've been using for a while. They are basically fine I think -- which is to say, you only really notice is a razor is really shitty, and they aren't, so I'll call that a win. Just got the underwear recently, no notes yet.
[+] [-] thrdbndndn|3 years ago|reply
[+] [-] ijidak|3 years ago|reply
I can say that my bad ads get less sales than my good ads.
My good ads consistently work, my bad ads don't.
So, ad copy matters.
However, a good advertiser accepts that not everyone is a good ad target.
You may not be a good target for advertising.
I would say, I'm not a good target.
Some people are very moved by advertising.
Others are not.
The 80/20 rule applies here.
80% of the profit in advertising probably comes from 20% of the target population for a given product.
I've learned that it's better to think of good advertising as just a form of communication.
A great ad is factual information that answers questions customers have, and provides urgency.
An ad might contain some fluff, but to really sell it usually needs to state explicit, accurate facts, in easy to understand language.
There is a lot of bad marketing from people that think they can make an ad just because they're a hip or a cool person, or they have an eye for color.
Those ads can be egregiously bad.
Just as some marketing sites are all fluff no substance, but sold to unsuspecting business owners, the same happens with advertising.
But the key idea is that, for certain products, good ads sell "enough" to the target audience to be very lucrative.
A great book on this topic is "Ogilvy on Advertising." Specifically, the first chapter.
[+] [-] delecti|3 years ago|reply
[+] [-] kumarvvr|3 years ago|reply
As an avid internet user, my mind is automatically turned off to ads on any content I see.
I also blindly ignore the YT ads and focus only on the skip ad button. Strangely, I also ignore the audio, it just doesn't register.
However, If I am researching to buy a product or service, I keep getting shown ads about it everywhere I go to, so I do click on some ads.
[+] [-] sidvit|3 years ago|reply
[+] [-] typon|3 years ago|reply
[+] [-] SheddingPattern|3 years ago|reply
[+] [-] makeitdouble|3 years ago|reply
Also a lot of people won’t be able to make the distinction between an ad entry and an organic entry in a listing. I’ve mistakenly hit ads, and might be hitting some here and there without realizing it, and I would bet you do too.
That’s part of why legit businesses have to buy ads for their own product to avoid having a competitors eating up their result page and getting all the misplaced hits.
[+] [-] damontal|3 years ago|reply
Same for my solo stove.
My first thought when asked if online ads work is “No. Of course not. I just ignore them.” But then I remembered these purchases.
[+] [-] unknown|3 years ago|reply
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[+] [-] throwaway2214|3 years ago|reply
most web pages are up to 60% ads, search results are almost all ads, tv is mostly ads
google with their "answering question" thing has thought people to just trust it and click on first results, most of which are ads
ads, cookie banners and privacy popups cover easily most of the page, especially on mobile.
[+] [-] philjohn|3 years ago|reply
During lockdown I found several fantastic butchers who decided to launch a delivery service to reach more people through ads on Facebook. I'm still a regular customer.
For things that are available in a supermarket, brand advertising is better, for smaller businesses operating online, ads do indeed work.
[+] [-] siquick|3 years ago|reply
[+] [-] sircastor|3 years ago|reply
Amazon is trying to sell me dental office equipment, or specialized restaurant tools, and a dozen other things that few outside of a particular area of expertise would remotely consider. It’s bizarre.
[+] [-] firecall|3 years ago|reply
Of course you have to qualify Advertising as being a persuasive Ad' shown to an audience that may purchase your product at some point!
What constitutes an Ad' is also open to some debate, but you get the general idea!
[+] [-] QuantumGood|3 years ago|reply
[+] [-] aglavine|3 years ago|reply
There was a promotion like 25% off on Thermomix. For a week only. I wanted one, but I naturally distrust campaigns that urges yoi to buy in a short time.
Now it is like 25% more expensive.
[+] [-] dustinmoris|3 years ago|reply
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[+] [-] hnbad|3 years ago|reply
Of course that's not what the article means, but it's interesting that Google, Meta and TikTok are described as advertising giants when their products ostensibly serve different purposes. I wasn't aware they were comfortable with being so mask-off about the actual nature of what they are, namely vehicles to generate ad impressions.
[+] [-] baxtr|3 years ago|reply
[+] [-] osigurdson|3 years ago|reply
YouTube, in my opinion, is far more effective as users are forced to watch 5 second ads prior to watching the video that they are interested in. 5 seconds is too short to context switch and can also convey a lot of information.
[+] [-] montpeliervt|3 years ago|reply
[+] [-] unknown|3 years ago|reply
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