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Comment by RodericDay | Hacker News Reader

What I really can't understand, that permeates this whole discussion, is plenty of people that try to sell the idea that ads let us have content "for free", and that all we have to tolerate is "a little annoyance".

It's insane. If companies are buying ad-space, it's because they expect to get more business in return. This means that someone out there is being influenced by said ads, so that if the content cost X to put up online (hosting, funding its creation), someone is paying X+(ad company overhead) for it.

If these costs are being borne evenly, then it's complete societal waste. We could pay X for the content, and not incur the overhead. If these costs are not borne evenly, and some people are paying for the consumption of more disciplined people, it's probably contributing to terrible cycles of poverty (ie: some kid spending money on fancy new shoes he doesn't need and can't afford is paying for a well-paid tech-users YouTube habits, because it preys on their lack of education). Either way it's terrible.

Advertising isn't free. Insofar it works, for some people, it's basically coercive via psychology and simulated peer pressure.

View on HN

Dude, I've been trying to spread this exact understanding on HN for years[1]. You would think that this crowd would get that there is no free lunch. But cognitive dissonance is powerful:

"It is difficult to get a man to understand something when his salary depends upon his not understanding it.” – Upton Sinclair

I've been tracking this debate (or, until recently, lack thereof) for years and no one is articulating this well, myself included. Specifically, no one is articulating how this doesn't even make sense from an economics perspective.

I'm glad Marco Arment is supporting ad blocking, but he fails to see the how bad the ad-supported business model is for the web and how much it costs society. He's an intelligent guy, so I suspect it's for the reason Upton Sinclair put so well. "I make most of my living from ads," Arment writes.

Let's work on articulating this better together? Email me! Anyone else interested is welcome too.

[1] https://news.ycombinator.com/item?id=4245427, https://news.ycombinator.com/item?id=8585237, https://news.ycombinator.com/item?id=9961761

On HN, I've recently seen less "complaining about ads" and more "complaining about hostile UX modals and popovers to force ad clicking." Which is fair.

> I've been tracking this debate (or, until recently, lack thereof) for years and no one is articulating this well, myself included. Specifically, no one is articulating how this doesn't even make sense from an economics perspective.

That sounds like very bad economics. Because a) Either the spending power of the population is constant. In that case, there is no cost (for consumers), because they don't spend more, they just spend differently. b) Or, spending power increases as a function of amount of ads. In that case, there is no cost (for consumers), because their increase in spending due to ads is precisely offset by the increase in spending power.

Unless you are somehow suggesting that people would just insanely accumulate wealth, instead of spend their income, if only there where no advertising.

The reasoning goes (and I have absolutely no idea if there is an element of truth to this or not so don't hold this against me) that advertising increases the velocity of the total amount spent and as such can actually increase the size of the total economy. So even if people do not insanely accumulate wealth it does leave their pockets faster essentially causing a decrease in total savings.

> So even if people do not insanely accumulate wealth it does leave their pockets faster essentially causing a decrease in total savings.

That argument doesn't sound right to me. From an a priori standpoint (and I am happy to accept a posteriori arguments, i.e. studies), people will on average invest a fixed percentage of their income into long-term savings (i.e. pension) and the rest on various goods. I read your "people do not accumulate wealth" as a general agreement to that premise. But if that's the case, then there really is nothing bad going on here. Your total spending power is independent of whether you buy one large good A, or instead a series of smaller goods B that sum to A.

The latter is, what I interpret as your "increase in velocity of spending". But that has no negative impact on you as a customer, whereas it is good for the economy, no? Because money that is churned in the economic cycle produces wealth, whereas money standing still doesn't.

And that's what I mean by my alternatives: Either my premise is true, in which case your total spending power won't really change and advertising only redistributes this spending power amongst several competing companies. Or my premise is false, in which case advertising would cause us to sacrifice long-term savings in pensions for short term satisfaction for buying goods (which might be bad).

But I see no reason, a priori, why that premise should be false. It actually sounds pretty ridiculous to me, tbh.

Overall, my (very limited) understanding of economics for this problem is based on two rough fundamental principles: a) The amount of value (≈ money after accounting for inflation) in the economy is more or less constant (i.e. people have more or less "money you need to afford food and shelter"xC, where C is a constant). And b) Money produces wealth, when it is spent (i.e. is exchanged for goods).

Given that people are going in debt to buy stuff they don't need I think there may actually be a point to the reduced savings. Advertising and cheap credit go hand in hand.

Yeah it's a really simple argument that many choose not to understand. The more ad blocking the better until Advertisers and Publishers come to grasp wit UX. I'm quite tired of the tracking and bandwidth today's ads consume. Looking very forward to iOS9.

Well yes he does make most of his current income from ads - mostly from his podcast. But he made most of his wealth from his equity in Tumblr as the first developer. He also sold Instsgram to another company and makes money from the OverCast app.

He created Instapaper, not Instagram. He sold it to Betaworks.

They've been doing great work with it lately and have a solid subscription business model now.

> If these costs are being borne evenly, then it's complete societal waste.

That doesn't make sense.

You are saying because User reads Content, Advertiser pays Content, and User pays Advertiser, that the middle step of Advertiser paying Content is unnecessary, because User could pay Content.

Simple counterexample: I like reading techcrunch, but would never pay for it. But I might see an ad for a new device that I like and would pay for, on techcrunch. If I click through the ad and buy it, then everyone wins. Techcrunch makes money from me, who would never pay them directly, because the advertiser pays them, and the advertiser makes money, because I buy their product.

In your example, there are two possibilities: either you did want and need to buy the product before the advertisement or you didn't.

In the first case, the advertisement was wasteful: the company that sold you the product has unnecessarily spent money, which goes to the product price. And this is not a small amount: big consumer companies spend billions on advertisement space/time alone, an amount comparable to their R&D expenses. I'm talking about ads alone, not other marketing expenses, many of which are related to advertisement. In most companies, marketing budget dwarves R&D, by the way, and in some markets, this costs could very well be the biggest chunk of the price in a product.

In the second case, you would not buy the product without the ad. That may mean that you simply didn't know the product before and finding it was good for you, but most probably you didn't need it or would not want it if not because of the ad.

In this common case, you didn't win: you just spent money because of a need/want that you didn't have before seeing the ad. You were hacked and exploited for both the publisher and advertiser benefit.

He might have had the need before seeing the ad but hadn't seen a solution.

Adverts are at their basic level a way of informing end users about what they can purchase. They are also there to try and raise brand awareness. People are more likely to trust a brand that they have heard of rather than some unknown.

> People are more likely to trust a brand that they have heard of rather than some unknown.

Is this a good thing?

Not at all. Makes brands with colossal marketing budgets sell more despite there being better alternatives from small companies. But that's how human consumption works, and it's virtually impossible to change that.

Brand awareness is one reputation mechanism. For better or worse. ... and reputation itself is a good thing.

There's an amusing and relatively new third case where you already have bought the product, but ad servers are dumb and will spam you with ads for that product for months, because your trackers said you searched for that product once.

It's wasteful, but in an almost ironic novel way.

Actually some advertising is intended to reach people who already bought the product, to reassure them they made the right decision, and to keep buying their brand in the future (brand loyalty).

I wanted to mention this exact thing on one of the threads earlier today but couldn't articulate it properly.

In the UK the department stores John Lewis and House of Fraser are both guilty of this - if I browse something on either of their sites an ad for it follows me around the web for ~4 months.

E.g. I was buying Birthday gifts for my girlfriend at the beginning of July and looked on both of these sites and they are both displaying the same ads to me (i.e. at this point both are spending their advertising budget to annoy me)

What I want is this - a space where I can say "I'm looking for a picnic hamper for a gift & I want to spend between £25 & £50. I need it by date X" This can then be given to the advertisers (auctioned?) and they can display some ads to me which are relevant. When date X is reached (or I indicate that I've bought said item and am therefore out of the market) these ads stop. For added info I can even say what I bought and why - e.g. "I bought X in your store as a picnic hamper won't fit through my mailbox"

Surely this is more useful for everyone involved? I get ads which are actually being targeted based on something I control (vs. being inferred via which sites I happen to click on or what cookies are set) and the advertisers get more detailed info as well.

I believe such a thing already exists :) http://imgur.com/p6GD6kD (plus no need for a "need it by date X" feature as these ads don't follow you around everywhere!)

For me it was when I started playing Ever Online, for months after I would see endless banner ads for the game screaming "JOIN NOW!".

But I already had joined, and even if I wanted a second account I already know where to go to get it. Ad tech is dumb, real dumb.

In the first case, you know you need some product, but not necessarily which one. You need a pair of shoes, but are you going to get Reeboks, Nike, Asics, or what? They all serve the need you originally had, advertising is just directing you towards one or the other.

I hate it when style items like shoes are used as an example. Once you're out of your teens shopping for shoes just isn't much of an issue in real life. Real life is more like, "I need a vacuum. It needs these properties: canister, quiet, light, and a beater brush." No ad is really going to give you this information. Any ad showing a vacuum is just wasting your time. You're going to go to an objective site to compare products, not click through to some random site and purchase.

And advertisers know this so we get a host a stupid ads trying to convince you that one flavor of sugar water is better than another. Or that this poop inducing yogurt is better than that. In other words, effective ads rely on trickery to get you to think style is more important than substance.

I need a vacuum cleaner. I know a couple of companies, I research their vacuums. Still not sure what I want, then I see an add for foobar vacuums... Never heard of them, let me go research them too. By the way, for YOU, shopping for shoes isn't much of an issue, but that isn't true for a lot of other people. The other thing is a lot of people don't spend their time "going to an objective site"

For crying out loud. There's also a third option: you're researching similar products because of an existing need, and you haven't heard of $ADVERTISING_COMPANY before you saw the ad, and they turn out to have a better product than competitors.

> You were hacked and exploited

Yeah, that's not what either of those words mean.

> For crying out loud. There's also a third option: you're researching similar products because of an existing need, and you haven't heard of $ADVERTISING_COMPANY before you saw the ad, and they turn out to have a better product than competitors.

Actually, I did address that, as part of the second case:

"That may mean that you simply didn't know the product before and finding it was good for you"

>> You were hacked and exploited

>Yeah, that's not what either of those words mean.

Late response for the record: you think you're in control of your mind and how it works. But advertisers are very ingenious in developing ways to make your mind behave in a manner you (the admin) does not want it to, in a sneaky way. A very good metaphor for it is hacking.

Unfortunately, this is neither DefCon or a James Randi show, so they do not do it for fun. They explore this hack to take advantage from you (your system, if you will) for their profit and your damage. An exploit.

I did not use "literally", but I refrained from using a more strong indicator of a figure of speech (eg, using "virtually") because I though I could engage in a better debate here then this. I still think I was right, but there are always exceptions.

See, I really like markets, and I have a problem with phrases like:

> I like reading techcrunch, but would never pay for it.

Sounds to me a lot like Mitt Romney talking about how his wife has the most important job in the world, but she's essentially his unpaid housewife. Sounds hollow.

You are paying for techcrunch, by buying products advertised on it. It would be good for the finances of everyone in society to know exactly how much. If the product company could slice prices in half because their arms-race marketing budget is soaring, maybe you'd change your mind and pay techcrunch directly, so that you, techcrunch, and the R&D department of the product benefit, while marketing stops soaking up a large chunk of the money exchanged.

> Sounds to me a lot like Mitt Romney talking about how his wife has the most important job in the world, but she's essentially his unpaid housewife. Sounds hollow.

No, he's actually saying that raising the next generation is the most important job in the world. aka, Mom. And I think he's right.

Most of us live in market economies. Jobs which are truly considered to be important have respect and pay well. In contrast, in the U.S. we don't even respect mothers enough to e.g. give them enough time to fully recover from giving birth before going back to work or ensure that nobody has to worry about losing their job or income if they take a sick kid to the doctor.

Man, I don't want to derail this conversation, but I have so many feelings about this issue. And they often conflict.

As someone raised in a very traditional religious environment, I am not a big fan of the market economy approach of quantifying and anonymizing roles (including that of my local grocer or 'fishmonger', to name an example).

But on the other hand, we live where we live, and in this world I figure if we don't respect mothers because their role is difficult to express in money, we should at the very least fix that and give them all the support they need, monetary, paid leave, or otherwise.

> Jobs which are truly considered to be important have respect and pay well

Correction: Jobs that return a very positive cash flow (for someone) pay well. (Teachers, Cops, Firefighters vs Brokers, Singers, Pro Athletes)

I'm not sure those examples mean what you say – e.g. teachers are allegedly important but get paid far less than your other two examples, have increasingly regimented working conditions and are popularly blamed for circumstances outside of their control. In contrast, it's far less common for anyone to e.g. go after first responders’ pay or benefits or talk about how public safety depends on breaking their union.

Unsurprisingly, that respect gradient also tracks closely which jobs are stereotypically female-dominated. Even staying in education, school administrators - historically male – get more respect for comparable levels of education and are paid more for doing less work.

Again, the point is simply that our talk isn't backed up by our actions.

He's paying lip service to that idea. As acdha points out, he's not "putting his money where his mouth is".

Sure he his. She's a stay-at-home mom. Whose paycheck bought the house, etc? His.

I think what they meant was "This job is important. So we should pay it accordingly. It is kind of hollow claiming that a job is important, but at the same time not paying it".

Yep, I get that's what was meant. It's just not logically sound.

No, paying for a website and being the reason some website is enabled to make money aren't the same things.

This is because the most important part in the whole process of wealth creation is it's incentive structure. Reducing it to the end state money distribution is like ripping a dimension off the market.

Costs don't drive prices though. Products are priced at whatever the consumer will pay, and if they won't pay enough then the product doesn't get made.

Price competition is an idea that exists but it's plan Z for any business. It's the last resort when you can't produce a superior product or find another niche that justifies higher margins. Think AMD vs Intel here.

No sane businessman has ever woken up and decided to slash his profit margin just for the hell of it. You can tell by the fact that businesses make profits - that wouldn't happen with perfect competition.

Nobody wants to be the low-margin high-volume product, because you're only a bad quarter away from low-margin low-volume. And once you're in it, it's a really hard pit to climb out of.

>See, I really like markets, and I have a problem with phrases like:

>> I like reading techcrunch, but would never pay for it.

Like most people in the world I can't trade time for money beyond a certain threshold AND I can't usually use that money and earn it simultaneously. While my attention is also limited it's something I can split so many people can pay for a small portion of my attention while I am simultaneously using whatever those fractions of attention are paying for.

Thats why "What I'll Spend Money On" is not the same as "What I Like" (in this case, there are of course various other situations in which they are different for other reasons)

The problem is that nobody is asking the actual market value of their product. TechCrunch would probably want subscribers to pay north of $5/month. But the actual marketing value (in ad revenue) that they are currently able to extract from a single reader is probably closer to $0.50/year - if that.

You solve the micropayment problem and then we can talk about what I'm willing to pay for content.

Mozilla Research put the entire web's advertising revenue at $12.70/month per user[1]. In other words, if they are right we are living with the consequences of advertising for a mere $13/month, $13 dollar they still get from us anyway because it's baked into the prices of the advertised products.

> You solve the micropayment problem

We hackers and technologists here at HN are the "You".

"The best minds of my generation are thinking about how to make people click ads. That sucks." – Jeff Hammerbacher, fmr. Manager of Facebook Data Team, founder of Cloudera

As I put it here a couple of weeks ago[2]:

You're putting all the responsibility on the consumer, and none on us, the technologists, the so-called innovators. Where are our innovative powers to come up with alternate busniness models? Where are our backbones to stand up against selling out the internet so that we can get rich quick?

Because that is what the advertising business model is: a get rich quick scheme. Undercut the straight up competitors that charge for their product by fooling consumers into thinking you're offering what the other guy is offering, but for free. Come on, who could turn down that?

The saddest thing about Hacker News is that we all get behind radical things like FOSS (Bill Gates called it un-American) and Snowden, and fight SOPA and NSA violations of privacy, but because too many of our salaries depend on advertising revenue, our cognitive dissonance blinders go up lightning fast.

[1] https://news.ycombinator.com/item?id=8586294

[2] https://news.ycombinator.com/item?id=9961761

Why assume there would be less overhead without the ads?

With ads, there is also probably less friction visiting unknown sites; clicking to a site with too many ads and then just closing it is probably a better experience than knowing you blew $0.05 on crap content (I'm not saying getting frustrated about $0.05 makes sense, I'm saying it will probably happen).

You and dragonwriter are missing my point about innovation, and also greatly underestimate the overhead cost of the advertising-publisher industrial complex.

I didn't make an estimate, I asked you to justify your assertion.

> Mozilla Research puts the entire web's advertising revenue at $12.70/month per users[1]. This means that is the most we'd have to pay on average if could just pay directly (and in fact less if because all the overhead and externalities go away).

Direct payments have overhead and externalities (aide from simply payment processing overhad, consider that instead of providing content to all comers with accompanying ads, content providers have to have paywalls -- to stop the content from getting taken for free -- and find some way of promoting content to those who haven't yet paid to convince them to pay for it.) Neither the paywalls nor the promotional efforts are free of cost.

> In other words, if they are right we are living with the consequences of advertising for a mere $13/month, $13 dollar they still get from us anyway because it's baked into the prices of the advertised products.

I am sorry, but I can not understand what's the problem with that. I can put out my content for free, everyone, regardles of economic situation can consume it. Prices will increase accordingly, but it won't affect everyone equally. The food you need to put on your table to survive, your electricity and your water doesn't have as large a chunk in the advertising budget as the latest iPhone, Macbook or random technology product. So at the absolute worst, the people buying luxury products subsidize people who wouldn't be able to afford my content otherwise. What's so bad about that?

Another implicit assumption that is very questionable for me as a non-economist is: The overhead the advertising company gets doesn't disappear. In general money doesn't disappear. It gets spent on the employees of the ad-company, which increases spending power and is good for the economy (?). It's a bit like energy. The amount is mostly constant, it's the fact that we move it around that creates value. The absolut worst you can do with your money, is not spending it. Because it can't create value like that.

Product companies NEED advertising. Sure they could slice their prices (not in half) and not advertise. But then they would only grow by word of mouth. For some that is enough, but for most companies, it isn't enough.

>If these costs are being borne evenly, then it's complete societal waste. We could pay X for the content, and not incur the overhead. If these costs are not borne evenly, and some people are paying for the consumption of more disciplined people, it's probably contributing to terrible cycles of poverty (ie: some kid spending money on fancy new shoes he doesn't need and can't afford is paying for a well-paid tech-users YouTube habits, because it preys on their lack of education). Either way it's terrible.

Advertising isn't a complete societal waste. If I find a way to compete with an established business by offering the same product at a lower cost, or a better product at the same cost, or a new product that is worth the money but no one had thought of before, my only hope to connect people to that product (not to mention make myself money) is through advertising. Word of mouth and objective reporting in news outlets will also do the information spreading work, but advertising does a considerable amount. In other words, it's competition increasing.

I think economists have done studies on markets with and without advertising and have found results indicating it does bring down costs in those markets by increasing competition [1]. In economic terms that would be a gain since without advertising we would consume an inefficiently low amount of said product. Note that even if there is a gain to efficiency because of lower prices, it may be completely offset by the cost of advertising itself (costs being the cost of consumers having to be irked by looking at them and the effort that went into crafting the advertisements).

[1] Could I be remembering this paper? http://www.jstor.org/stable/724797?seq=1#page_scan_tab_conte...

Who pays the costs in lost efficiency, lost productivity, lost time etc for readers to wade through ads to get to content?

Saying something "lowers costs" without considering ALL costs involved is lazy.

Most smart consumers are much less interested in what a company has to say about its own products (embellishment) than about what other people say.

So yeah, advertising is pretty terrible.

I made this edit right after I posted it so perhaps you didn't see it, but I added:

"Note that even if there is a gain to efficiency because of lower prices, it may be completely offset by the cost of advertising itself (costs being the cost of consumers having to be irked by looking at them and the effort that went into crafting the advertisements)."

I think that speaks to your comment about the lost productivity of users of the web. I do think all costs should be considered, absolutely. Didn't quite follow your last two paragraphs. You seem to have a gut feeling that all the costs outweigh all the benefits? I have no such gut feeling.

While I have no strong gut feeling as to the total cost/benefit, as someone who has studied marketing and spent quite a bit of time in the sector, I get the impression the cost of advertising itself is very high, perhaps even dwarfing all the rest, comparatively.

And the industry as I've seen it is not particularly efficient/cost-effective or pleasant either. Most of the shoddiest work, unhappiest employees and shittiest bosses/manager that I've encountered were in this sector, by far. The only environment where I got a similar vibe was a bank/insurance company where I worked.

Essentially, advertising is useful when you need to tell people about a new product or service. Beyond that, it's playing a game. Once people know a service exists and have been accurately informed as to its benefits, then for the most part, people will use it if they need it and spread it by word of mouth if its useful for other people (and/or they had a good experience).

Advertising beyond that mostly serves to solidify brand integrity and trust and ways to undercut competitors and is an ever growing conflagration of an arms race. It has little to do with the interests of the public.

Which do you think wins, low budget factually honest advertising or high budget advertising that builds consumer loyalty or craving using whatever psychological means necessary?

I'm pretty certain the latter wins far more often than the former, in which case advertising hurts healthy competition. You may in fact have the better or cheaper product, but the establish company has the huge advertising budget by virtue of being the established company. Advertising serves as a moat far more than it serves as a bridge.

So while the naive view is that advertising communicates the existence and benefits of products so that consumers can make informed choices, in reality it is more often and more successfully used to communicate lies and manipulation, and raise insurmountable barriers to new competition.

>and raise insurmountable barriers to new competition.

Why do we assume that the dishonest and manipulative nature of advertising would be more effectively wielded by the companies already in the market than by new ones trying to break in to the market?

In this hypothetical, you have the superior product, so you would prefer to rely on honesty.

The alternative situation where everyone bullshits is one of the reasons people are using ad blockers.

Primarily 'cause they have larger budgets. And sure, a new entry into the market might innovate on advertisement instead of product, but is that what we want?

Advertising is the method most people use to discover new products/services.

Of course these days the line is often blurred. So half the posts on HN could be adverts, and you wouldn't really know about it. In fact lots of them are adverts.

But just think about how the world would work without advertising. How would you know there's a star wars movie coming out? How would you know about new products and services you might be interested in buying.

I buy quite a few magazines, and one of the reasons I buy them is for the adverts, which tell me about companies who provide things I might be interested in.

For example, I buy a bee-keeping magazine, which has many adverts related to bee-keeping. That's valuable. I buy a pig magazine, which has adverts for pig arks, pig tags, weaners, etc etc.

Good advertising is a net win for everyone. It provides us information about things we might like. Just because there's some bad advertising on the internet, it doesn't mean all advertising is useless.

What is the alternative model to advertising on the internet? The fact is, that most websites are supported by advertising, and if that goes away, so do the websites unless some other magical income model replaces it.

That's a false comparison, because there's a huge difference between ads-as-information and ads-as-empty-noise.

If you buy a trade magazine it's a given the ads will be targeted to a specific area of interest. The bad ads are simply not very interesting, and the good ads add real value to the experience by giving you useful information and/or entertaining you.

But when you turn the page, they're gone. Print ads leave you with some agency.

Most ads on the web seem to be completely untargeted. And when they are targeted, they're not targeted very well. And even if they are targeted well, they're incredibly repetitive.

Web ads don't give you agency. They treat you as a passive consumer who needs to be forced to see the same stupid banners over and over. Most of the time the banners are simply annoying. Even when they're not, they have a much lower information content than a print ad.

So unlike a print ad, which will be some combination of irrelevant, beautiful, sparsely presented, and informative, they carpet bomb your browsing experience with noisy low-value distractions.

Instead of adding to the experience, they take away from it.

And from the seller's point of view, it's damn near impossible to work out the ROI. You can't assume that view-click-sale works, because often people will research a product before buying. So you don't know if they've seen the ad once, or fifty times, or been persuaded to buy in some other way.

There certainly is an arms race, but it's gone in a completely ineffective direction.

IMO there's a lot of money to be made by bringing some intelligence back into web marketing. Instead of just spurting banners everywhere or using not-so-bright algos to do poor targeting, the ad industry might want to consider going back to ads that add value, instead of treating customers like not very intelligent prey that has to be herded down a funnel.

They are supposed to be programmatically targeted, but programmatic is not as accurate as it's billed as. They do get targeted, but a lot of the traffic that they go after is spoofed somehow or otherwise inaccurate. Models of web traffic are much less accurate than unmodeled subscriber rolls.

Lots of high end people pay out the nose for information collection and shaping. They're called assistants. Others pay for specialized newspapers and magazines for their profession. There is no such thing as 'free' media because time and attention have value. If the information is more important than the entertainment value, then you can pay someone $10-15 an hour part time to read everything that you need read and give you a digest.

You can also have an ad-free life by paying someone else to read the news for you and moving to a rural area, where there are few billboards.

Print ads tend to have better targeting because the subscriber rolls get backed up with credit card numbers in most cases. This is a case in which early 20th century technology is a lot more reliable than 21st century programmatic advertising.

>And from the seller's point of view, it's damn near impossible to work out the ROI. You can't assume that view-click-sale works, because often people will research a product before buying. So you don't know if they've seen the ad once, or fifty times, or been persuaded to buy in some other way.

Actually, you can, at a certain level of scale and spending on many platforms. That requires the user fingerprinting that bugs privacy advocates so much. It's called 'cross-channel attribution,' and there's a lot of material out there about it.

Also, it's not that users aren't intelligent. Most people are pretty dumb, but few of the people with disposable income are dumb. You use repetition because you're only getting a fragment of someone's attention, and a fragment of someone's cognition is pretty 'stupid.'

> Just because there's some bad advertising on the internet, it doesn't mean all advertising is useless.

The problem is it's not just some. At first, there was bounds of worthless advertising. Classical random banner ads have about zero revenue, and have had for over a decade. Instead of good advertisements, we got pop-up ads, pop-under ads, flashing animated gif ads, autoplay video ads, autoplay audio ads, ads that pretended to be native OS dialogs, link ads, … just to grab the users' attention anyway, and trick a few into buying absolute crap they didn't want. Ad networks getting used as vectors to infect computers (cf. latest Firefox/pdfjs exploit) are just the final nail in the coffin.

Print magazine ads work well because they don't try to infect me with viruses, don't try to trick me, don't make my fan run at 100%, don't drain my monthly data plan in a day (or battery in an hour), and don't keep me from reading the rest of the magazine. Had web advertisement stayed that same, I doubt we would ever have seen adblockers gain a substantial marketshare – nobody would use them if installing them was more of a hassle than just ignoring adverts.

I don't need to know there's a new Star Wars movie coming out.

Scarcity seems to breed innovation, so maybe cutting the cord and creating a financial incentive will have some brilliant people come up with better models than I can for free on my spare time.

Maybe after a period of downtime, we'll all reminisce about the good old days and vote in some kind of universal internet-real-estate tax, allowing people to pledge bandwidth to people whose content they enjoy to aid in its dissemination, on a "one-person-one-attention-unit" basis. Who even knows?

A contrary (and more accurate view) is that advertising suggests things that people don't really need.

Here's a "magical alternative": if you make something the least bit good/useful, people don'e need to be beat over the head with it - they'll find it.

Advertising is vapid, inaccurate, and a blight.

> Advertising is the method most people use to discover new products/services.

Prove it. I can just as easily pull out my ass "Word of mouth and browsing in-store or online is the method most people use to discover new products/services."

>Advertising is the method most people use to discover new products/services.

Do you have a source for that?

>How would you know there's a star wars movie coming out?

By being interested in science fiction movies, being part of a community of people with like interests, theater showtimes, etc.

Why do i need to know 6 months beforehand that a star wars movie will eventually come out?

Why would i need to know any sooner than a week before the release date?

>How would you know about new products and services you might be interested in buying.

By having an interest in buying them, and then doing research regarding which product will best fit my needs.

>which tell me about companies who provide things I might be interested in

Or do the advertisements give you an itch and a tool to scratch it?

>which has many adverts related to bee-keeping. That's valuable

In what way?

Are you incapable of finding a new bee-keeping related product without first seeing an advertisement?

Can you not google the item you need and then compare the options amongst each other?

Can you not simply search on amazon or some bee-keeping friendly retailer?

Are you not part of a community of bee-keepers who you can ask for recommendations about products?

If you've ever heard of:

Costco

Krispy Kreme

Kiehls

Spanx

Lululemon

Rolls Royce

Zara

Jiffy muffin mix

NO-AD sunscreen

Then you've disproven you're entire argument, as those are all brands that have $0 advertising budget, and do no advertising.

In my industry advertising is indeed a key way in which office designers find out about new products.

One form of advertising which is commonly utilized is a yearly trade show where manufacturers rent showroom space to show off their products to prospective buyers. This model makes sense because it gets 60,000 people with purchasing power into the same building to see what products are new and what the latest design ideas are. There is no hidden agenda here and everyone knows what is going on.

This is the same basic concept as a magazine or website advertisement where you try to get a bunch of likeminded people in one industry with purchasing power to subscribe and read the magazine or website. The advertisements (paper showrooms space) are used to show cool pictures of new products companies are selling and now one is fooled by that.

In this industry, manufacturers have brand recognition and a reputation so seeing an ad for a new office chair by X company is an effective way to announce to people who already know of and like your brand that you have a new product.

Hacker News leverages its niche audience to 'advertise' job listings for Y Combinator funded companies. I could probably find out about those jobs elsewhere if I were currently looking for a job, but I'm willing to trade seeing them for using this site. I expect many other people don't mind advertising when it is tastefully done and on-topic with the website or magazine they read or are subscribed to.

Personally, I had never heard of Kiehls, Spanx, Lululemon, Zara, Jiffy muffin mix, or NO-AD sunscreen. However, I don't know if advertising would help me remember these brands better, as I don't buy their class of products often.

I'd...search for things I need? Or rely on word-of-mouth via people I actually care about? (Of course, you could argue that these are also forms of advertising, in which case this argument ultimately devolves to "people hear about things most often by hearing about them".)

Or: even though it might be possible to interest me in buying said products and services, maybe I don't need/want them enough to justify the purchase, and so reducing/eliminating pervasive psychological coercion is in fact helping me to act in my rational self-interest?

Also: "most businesses are supported by X, therefore X is good and/or there is no viable alternative to X" just doesn't hold water as an argument. For instance: "most businesses are supported by chattel slavery..."; "most businesses are supported by the local feudal warlord..."; "most businesses are supported by the infinite benevolence of the Church...", and so on - failure to imagine a different model is a failure of imagination and/or historical perspective, not of existence.

If these costs are not borne evenly, and some people are paying for the consumption of more disciplined people, it's probably contributing to terrible cycles of poverty

C'mon, that isn't the only alternative.

I saw an ad for some slippers on Facebook the other day. They looked nice. I remembered I wanted some slippers for the office. I bought the slippers. I'm happy, the advertiser is happy, Facebook is happy.

Advertising is not always about unhappy or annoying endings, even if sometimes it is. In many cases it works, is ethical, and can even provide a service. In these situations, it's a great way to fund things without forcing end users to pay evenly.

You make several assumptions. "We could pay X..." but we don't. How is it a complete societal waste? When someone purchases ad time they are essentially paying for your content. They do this in hopes of selling more product. It is essentially a win/win. You get a free product, and they get more sales. From a financial perspective the marketers aren't going to sell their product for less because they don't advertise. They are spending some money to make more money. So it makes sense for them to spend the money. As far as "we could pay X for the content..." Well that is essentially what we do today, we just do it through ads. Does it contribute to a "cycle of poverty" Not really. That kid will want those fancy new shoes whether he sees it in an ad, or sees it on his friends feet. And yeah, he is helping pay for your YouTube habit. But then so are you. Even if you don't watch ads, you are still purchasing the products that generate the ads.

> It's insane. If companies are buying ad-space, it's because they expect to get more business in return. This means that someone out there is being influenced by said ads, so that if the content cost X to put up online (hosting, funding its creation), someone is paying X+(ad company overhead) for it.

Yes, and if you paid directly you'd have X+(B2C payment processing overhead) which is more than B2B.

> We could pay X for the content, and not incur the overhead.

That is really not true. Have you ever tried to support N customers instead of 20 businesses?

There are some very major costs in providing any kind of support, even if its just for billing.

You are simply unrealistic if you believe that ad companies have higher overhead than providing large scale customer support. I know someone who runs a [small] ad network and his overhead is a fraction of what it'd cost me to run a similar subscription based model.

The micropayments could be handled via one of those 20 companies. For example, it would be fairly easy for Doubleclick to have users set up an account and fund it with a few bucks, and then they'd pay TechCrunch .01 USD when the user read an article. In effect it'd be a sort of protection racket, if you don't want see any ads, pay up.

Which is why this will never be viable. Internet content providers are radio stations, not performers. They aren't going to Spotify themselves.

...and then its the same overhead because they are the ones collecting. You are just shifting who bears the cost of customer service.

Advertising is an arms race.

I thank you for your worship.

--Vishvarupa

Your logic is flawed. Advertisers advertise to increase their share of the whole economy. Every single person could spend exactly the same amount of money and even on exactly the same kind of things as before and advertising would still make sense. I am not denying, that due to advertising we shift our buying habbits. But advertising is born out of competition, it is to take a share of the spending power of people away from other companies. Spending power is pretty much a constant (at least in regards to advertising, it increases as a function of the strength of the economy).

Seriously, think about it for a second: If advertising stopped today, completely. Would you spend less money? I don't think so.

And in regards to

> if these costs are being borne evenly, then it's complete societal waste.

that is exactly what is happening. Advertising is the classical real world example for the prisoners dilemma. It is literally the reason, why game theory exists. Every company can chose to advertise (defect) or not advertise (cooperate). If no one advertises, everyone is better off. But that is not a stable equilibrium, so instead everyone is advertising, even though it incurs some cost on social wellfare.

> some people are paying for the consumption of more disciplined people, it's probably contributing to terrible cycles of poverty

You are honestly suggesting that internet advertising is contributing to poverty?

Advertising could also just make you aware of a product that you didn't know about, no? As far as I'm aware advertising can be a win for both the advertiser and the consumer.

Funding the content suffers from a tragedy of the commons problem.

Something rarely discussed is how the cost of publishing the content is imploding.

A generation ago it took a real company with full time employees to run Slashdot. In 2014 it took some volunteers and some linode instances to run SoylentNews using slashcode. In another decade you'll have people running things like /. and HN on the equivalent of a raspberry pi drawing 5 watts.

A generation ago some cool sites started as an old desktop underneath some desk, then they scaled to internet size which meant a mid size corporation. Well, for technological reasons we're scaling it back down to some legendary sites will once again run on a desktop underneath someone's desk, its just that desktop will run internet scale not mere thousands of users.

I'm not sure that society gets much value from journalists. Take corporate press release, lightly wrap in trendy breezy cliches and clickbait headline like 1000 of your closest competitors but supposedly your re-skin is better than theirs, and spam the link everywhere.

When that industry is gone, I won't miss it. Remember when the blue collars were losing their jobs and the journalists were all "ha ha not my problem go back to school"? What comes around goes around, and after the journos lose their jobs they can go back to beautician school or air conditioning repairman or whatever, "ha ha not my problem go back to school"

Something rarely discussed is how the cost of publishing the content is imploding.

You are aware that content generation isn't, in fact, a technological problem, right?

You still need folks to write the copy, edit, research and fact check, moderate discussion forums, etc.

Yes, the cost of the actual physical act of publishing copy has gotten cheaper. But high quality journalism costs money. That's unavoidable.

I hate to break it to you, but: this was caused by the internet. Two major effects are at play. First, yup, it's a lot cheaper to publish complete drek, hence the Gawkers of the world. This has caused those organizations that actually invested in content generation to have to cut costs (ask any news agency in the world... the investigative journalist is a dying breed, to everyone's detriment). The result is lower and lower quality journalism as investigation, fact checking, and so forth, is thrown out the window.

This is exactly like folks who would complain about the incompetence of government while trying to financially strangle it. And then, when that underfunded government isn't able to react to some disaster or adequately execute some social program, they use that as further evidence that government must be slashed ("look, government is so competent, yuk yuk yuk!"), while conveniently downplaying the fact that they caused the problem in the first place.

Quality journalism is dying because no one will pay for content. And no one will pay for content because of the perceived low quality of journalism. Repeat ad nauseum.

I don't disagree with anything you write in detail, in fact I think we agree that due to a massive mismatch in supply and demand, until about 99% of existing journalism is culled, nobody is going to make any money in journalism.

Maybe a good analogy is the village blacksmith is hurt and angry that he hung up advertisements on his shop wall, but nobody looks at them, and they're all going to be really sorry when there's nowhere left to put new horseshoes on because posting the spam was the only thing keeping the lights on in his shop. Meanwhile the general population drives by his shop in their cars not looking at his ads, and doesn't really care about horseshoes anyway beyond a general knowledge that everyone knows that everyone knows that horseshoes are really important culturally and a vital part of life in and of themselves, although individually no one actually likes it and no one is willing to pay for it.

And my point is something like if you "need" something horseshoe shaped for crafty project or whatever, now a days you download a .scad from thingiverse, run it thru openscad, run the .stl thru curaengine to get a .gcode, then feed the .gcode to octopi on your printer and pick up your shoe in a couple hours at a cost of about fifty cents of filament. I mean, sure, building a village size blacksmith shop to get my horseshoe would be difficult and expensive, but its unnecessary and practically no one wants horseshoes, so I'm not seeing much of a problem.

You can't possibly be equating the manufacture of a simple physical metal object, something easily automated, and arguably of little valuable in a modern setting, with the creation of high quality, researched journalism, intended to inform the public.

Can you?

I mean, if you think that metaphor is at all appropriate, you've completely missed the point. Of both my own post, and of journalism in general.

Don't just assert that.

I sincerely believe that most people overestimate (or pretend to overestimate) the value of journalism, and I'm curious about why you think it isn't so.

Alas, not to bring ageism into the discussion, but I'm gonna bet that probably just means you were born in, what, the late 90s or later?

Journalism serves a vital function. It's called the "fourth estate" for a reason, and should serve to enlighten the public on the goings on of the government and the world. Journalism is one of the forces counteracting government secrecy and surveillance. Hell, journalism is what brought the Snowden revelations to light to the general public.

To do that well, you need professional writers, researchers, and fact checkers. No, a casual blogger is not a journalist. Twitter is not journalism. Tumblr is not journalism. At best those are news. At worst, gossip.

Unfortunately, we now have an entire generation who doesn't understand what real journalism actually looks like. It's a damn shame... remember, journalism brought down Nixon and helped end the Vietnam war, among many other things. Real journalism can be immensely powerful as a medium.

It is not horseshoe manufacturing.

Could twitter and random blogs have stopped Vietnam and Nixon too, if they had existed back then?

And if there is something unique to journalists that make them more proficient at stopping presidents and wars, why couldn't they stop the Iraq war?

Because the powers that be coopted that power. I read the "journalists" in the early 21st century and it was depressing.

Then again, the independent bloggers and twitters have also been rendered ineffective and powerless. Nothing much came from Occupy and the Arab Spring, fur example.

We need something different.

> Could twitter and random blogs have stopped Vietnam and Nixon too, if they had existed back then?

Go read about Watergate and get back to me (though, ironically, to do that you would need to read the works of investigative journalists...).

Today, the equivalent to Deep Throat might be Snowden, and that, too, required journalists like those from The Guardian to get the story out. That kind of journalism requires resources to research, travel, for legal costs associated with protecting sources, etc.

Regarding Vietnam, the Pentagon Papers would never have been published if the Times hadn't spent their own money going to court to defend their right to publish them.

So no, I don't believe twitter or random blogs have the power of the fourth estate.

> And if there is something unique to journalists that make them more proficient at stopping presidents and wars, why couldn't they stop the Iraq war?

That's a deeply complicated topic.

First, it's worth noting journalists never stopped Vietnam from starting. But as the war was waged, journalism played a role in turning public opinion against the war after it had started, thus hastening its end.

So, with that said, journalists actually played a very similar role vis a vis the Iraq war.

Now, I do believe they were less effective than in the past, but I actually believe that's exactly on point, here: that period is the same time when journalism began to struggle in the face of the ascendance of the Internet.

Which brings me right back to my very original point: Quality journalism is dying because no one will pay for content. And no one will pay for content because of the perceived low quality of journalism. Repeat ad nauseum.

Your mistake is in believing quality journalism never existed, but that's only because of your limited perspective, having only seen the medium as it began its slow decline.

Could the reduced effectiveness of journalism be because the government has journalists too?

I saw lots of journalists in favor of the war in Iraq. Were there many journalists in favor of war in Vietnam too?

I have only seen journalists as they were already declining, but we saw the decline of independent bloggers as it happened.

What happened to amateur Internet journalism was not a market failure. It was the government's realizing that the Internet is a force multiplier, and they have a lot of force to multiply. Cue astroturfing, surveillance and the 50 cent army...

Could something similar have happened to real journalism too?

I saw lots of journalists in favor of the war in Iraq. Were there many journalists in favor of war in Vietnam too?

Of course. And just like the Iraq war, the government used control of information (like trying to suppress publication of the Pentagon Papers) to attempt to maintain support among both journalists and the public.

Fortunately, with a strong journalistic community, combined with the constitution and the supreme court, the government lost. But it took time and significant resources.

Could something similar have happened to real journalism too?

Eh, journalism has always had to fight against the corrupting forces of propagandists. That's nothing new.

The difference is, a large news organization has the time and resources to fight that corruption, while a small time blogger does not.

Of course, where bloggers win is in the sheer distributed nature of their operation. That is, it's a very different thing to muzzle/corrupt a million bloggers versus a dozen newspapers.

So there are pros and cons to both models. But I think there are things traditional news sources can do that bloggers/etc simply can't. And the converse is also obviously true.

This is turning into a classic unrecognized theoretical vs practical argument. I propose:

"Journalism could, and historically did, serve a vital function."

Exactly like horseshoe manufacturing. Just not today.

There's space for us both to be correct, in theory journalism, much like western civilization, would be a great idea to try, or maybe we had it in the past, or it would be an interesting goal for the future even if it never existed in the past beyond a mythical ideal, etc. While at the same time, in practice, we can pretty much flush the existing stuff and not miss it. For some definition of "us", we have already decided to ignore it and are not missing it. Some of the percentage of the population stats are pretty dismal.

It IS possible to gain value by debating the "why". I think you're indirectly correct WRT age (although I am quite a bit older than your theory) in that rolling all of media (including journalism) into roughly five giant corporations did very little for the quality of the craft, and the fish rots from the head down.

>"Journalism could, and historically did, serve a vital function." Just not today.

I agree that journalism isn't serving that function today, but I think that function isn't being served well at all. Not enough cars, so to speak.

What can we do so that the next Snowden doesn't have to teach basic cryptography to some out of touch horseshoe makers?

What the internet has done is remove scarcity from the equation (to a large degree). Prior to the internet, when all we had was magazines and newspapers, there was actual value in providing what you and the previous poster consider "low quality" journalism. If some of the articles in a tech magazine were little more than slightly reworded press releases, those articles still had value to me because I had no other way (i.e., no medium) to ever see a press release. Similarly, when my local city newspaper published AP articles, that had value because that newspaper was the only place I could read those articles.

Now, however, press releases are published verbatim on countless sites, show up in google searches, etc., and AP articles are published on hundreds of sites, plus Google News, and so when any one particular news site publishes any of this stuff they are providing me with essentially zero value. (It makes me laugh when I click on a link at Google News and it takes me to some newspaper's web site like the Akron Beacon-Journal and then that newspaper throws up a paywall barrier preventing me from reading the article, yet I can see that the article is from Associated Press -- why would I pay money to access content that has nothing whatsoever to do specifically with Akron, that the Akron paper had no involvement in creating, when that content is freely available on a hundred other sites?)

The second way the internet has removed scarcity is the well-recognized fact that there's now far, far more high-quality content available than any human being could possibly read, and much of that is free. Which means a publisher better be offering something really spectacularly special and exclusive, because it makes no sense for me to pay money just to increase my list of stuff that I'll never have time to read. The New York Times is an example of a site I would pay for, if they charged a reasonable amount, instead of the completely ridiculous amount they're actually charging (several hundred dollars per year) -- there's so much other good stuff to read that I'm not going to suffer any pain from not being able to read a few NYT articles a week.

Of course, if there was a workable micropayment system in place, I'd probably pay for even mediocre content, I mean, if it was a penny or something to read an ephemeral opinion column about, say, a sports team I follow, I'd do that sometimes. I'd probably pay several dollars a month even for "low-quality" content, if it relieved me of intrusive craptastic ads, but I'd never pay a whole dollar to a single low-quality publisher, let alone the $5-20 per month that a lot of paywalled sites are trying to get.

There's value to having someone with a deep understanding of a topic who can follow leads and investigate, construct a narrative out of disparate facts, and then deliver it compellingly. I guess it doesn't have to be a journalist, but you will need those same traits and I don't think that's a particularly common combination without specific cultivation. Clickbait and press releases obviously don't deliver that either, of course.

The hardware to run a site has become much cheaper, but at the end of the day it still takes a lot of hours to produce content and cultivate a community. There's a huge amount of business roles and work that you're glossing over there - from admin to overseeing content production to developer. Peer-moderator type systems like Reddit have lots of issues - even at the best of times they have a bandwagon effect that shouts down statements that are unpopular with the masses, and at worst they are very susceptible to sentiment manipulation like voter rings. I don't doubt there are "viral" marketers that provide social-media promotion services.

I'd also point out that looking at specific examples can be deceptive. Slashdot is late in its life cycle and the community has clearly decayed from its glory days. Digg probably doesn't need as many servers now either. But you'll never run a top-10 website on a Raspberry Pi - or any site whose performance you care about, for that matter.

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