Carriers Are Making More from Mobile Ads Than Publishers Are | Hacker News Reader

Carriers Are Making More from Mobile Ads Than Publishers Are

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74 pointsgregmac30 comments

Things are going to come to a head sooner rather than later. People are more and more talking about how bloated and slow web pages have become. Now we have ad blocking thrown into the mix.

Consumers are tired of big, slow web sites with intrusive ads (non-intrusive, people seem to be more ok with).

Web pages need to go on a diet. Lighten the size of the frameworks. Don't use so many hi-res images (and heck, what ever happened to text only pages!? They can be gorgeous too!). Use more sensible advertising. Just generally optimize the size and speed of the web page.

> Things are going to come to a head sooner rather than later. People are more and more talking about how bloated and slow web pages have become. Now we have ad blocking thrown into the mix.

I remember people talking about this since the late 1990s.

In the 1990s Apple didn't have leverage over the web like they do now and not being an internet company that makes money from ads, their incentives are aligned with combating this more than ever.

  > their incentives are aligned

They sure are. Apple sells native ads which, naturally, they do not allow users to block. http://advertising.apple.com/

Native advertising is a reserved word at this point, signifying advertising pretending to be any other article in a publication, differentiated from the work of the organization's actual journalists only by a tiny disclaimer, if that.

Advertising from a computing platform itself should probably have a name, but not that one.

And how does that apply to the web?

Well, if advertisers can't reach customers via web ads, where do they turn?

And ad blockers have been around since the '90s. But now they are becoming more and more legitimized. The balance of debate is shifting away from the notion that ad blocking is wrong and toward the notion that ads are increasingly obnoxious, problematic, and a poor way for sites to monetize themselves. There seems to be a "preference cascade" starting toward ad blocking, and once that happens it won't take long for ad blocking to become the norm.

It's tough for publishers.

I run a directory-type website. Most visitors probably spent 30s on the site, getting the information they need right away.

I decided to change from 2 to 3 ads per page, make them bigger, and more in-line with the content, rather than just beside and below it. The ad network was a major search engine.

I managed to 3-4x CPMs. Traffic went down by 25%. Effectively, users encouraged this type of behaviour by publishers.

Could you please clarify this one?

Your CPM went up by a factor of 3 to 4, yes?

But / and your traffic went down by 25%.

Are you saying that the number of unique visitors to your site went down by 25%, or are you speaking to the suggestions behind this article, and when you put the new ads on the site you also optimised the data you were sending and consequently were pushing 25% less volume of traffic onto the wire?

Page impressions (and probably uniques, but I don't really measure that) went down by 25%.

Am I the only one who wants to see it all burned to the ground? Or at least I wouldn't care if it was.

This is a weird comparison though since they're separate issues.

When you go to a theater, the cost of driving/gas can be more than the movie ticket. It's up to the user to weigh the costs.

I think this really highlights the mobile data ripoff that currently exists more than ads/cruft but both are real problems, just orthogonal. Then again the majority of mobile data is over wifi anyway so it's not as bad as it seems.

Zero-rating / sponsored data does seem to have some potential applications here though. Not many scenarios yet but might become more common.

I think this is slightly different, in that mobile ads demonstrate an explicit market inefficiency (it is in the interest of both the user and the publisher for the user to pay directly for content, instead of being served ads).

Wow. So, if we work out a way for carriers to fund content (in return for increased marginal data consumptiom) then we can ditch the ad-funding model?

If they fund it, they'll be able to tell us where we can get our news.

Isn't this exactly what net neutrality is fighting?

I thought it was fighting the reverse: content creators/publishers pay to have priority access to consumers. Or is it fighting both directions?

Nope. We'll just get ads as well. Companies tend to maximise their profits with whatever they can get away with. Once upon a time, pay TV argued "no ads" as a reason for purchasing. Then, once they had a base of users... along came the ads.

Or rather, if we work out a way for users to spend their money on content instead of the ad traffic, we can ditch the ad-funding model. This shows that viewer-pays web content is economically feasible, we just need some technology to get the money from the user to the content provider.

Of course viewer-pays web content is economically feasible. Because we are already paying for it! Where do you think the advertisers get their money from? The idea that ads give us things for free is an utter lie: https://news.ycombinator.com/item?id=8585237

You're right about the need for technology innovation around payment. The problem is, there is more money to be made under the current ad regime. When you ask people to pay for things, they will only pay for the things they truly think are worth it (That's key to the idea of the free-market!) But when you get people to use your product by fooling them into thinking its free, but while they are mesmerized by their good fortune at all this free stuff your accomplice the advertiser is on the other side picking their pocket, who then gives you a hefty cut, you can make gobs of money! https://news.ycombinator.com/item?id=10047706

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

If you also see this truth and want to do something about it, send me an email. I'm starting a project to whistle blow, to raise awareness, to inspire change.

Big miss in the methodology here. (CTO of a MVNO, watching data usage and pricing trends is a huge part of my day)

Those plans and costs ignore that at least a third of the US is on far lower cost plans from MVNOs, CSEs (Carrier-Sponsored Entities), various prepaid plans, as well as T-Mobile and Sprint.

They also absolutely ignore the fact that there is an additional talk and text price embedded in those. It's very techie to assume that the cost per MB for a plan is just total cost/Mb; the reality is that you easily have to figure $20-30 for the actual phone part of the plan.

Personally, I'd prefer to give subscribers far more value from their plan; advertising isn't the only problem. Many video apps default to greedy mode; pulling as high quality video as possible; without consulting or making it easy for users to requests lower bandwidth streams. Add that to FB video auto stream which just eats up bandwidth by scrolling through your news feed (and has had at least two separate places to turn it off- making harder to educate users) - and you have a trend of content and app designers assuming wireless connectivity is a commodity and unlimited for all.

Many, many people have smartphone plans with less than a gig of data because that's what they can afford - and the ecosystem devalues the actual experience of that gig more and more.

What I find amusing about this is that in addition to taking the money on the table by serving mobile ads, the carriers are also charging their customers for "data".

All the mobile ad and other cruft just increases the amount of data used by the customer.

Imagine if customers were only charged for the actual content. Is CSS, fonts and Javascript "content"? I guess it depends who you ask.

As a user, I rarely turn on Javascript, yet I still download heaps of it (then filter it out client-side). For me, this is totally unnecessary data usage.

it is no different then cable TV. You pay to watch all those commercials. In Canada the largest Carriers also happen to be Cable providers.

It's a little different - in effect, the amount of TV I watch has no impact on the cost to me from my cable provider.

In this case, the more ads you consume, potentially the more you pay from your wireless carrier.

A way to look at cable TV is like a buffet. Everything is paid for in advanced. In a buffet, you can eat until you bust and the restaurant would still break even with the food cost at worst. Most cases, profit. The rest of users always make up for the revenue 'losses' caused by a small set of anomalies. This double income from ads and data only happened because your carriers were allowed to get away with placing data caps on wireless. In some distance past, we used to get limits on broadbands too, remember?

It would be more analogous if cable providers charged you by the minute for TV service. Each commercial would essentially be double billed.

> That’s an average of $22.92/Gb or $0.0224 per megabyte

That is surprisingly expensive:

I live in Germany and pay monthly 10 Euro per 1.5GB - that's 6.7 Euro per GB or about 7.5 USD per GB ...

And that's not even a contract but prepaid on monthly basis.

Actually I could get 5 GB for 15 Euro thats 3 Euro or 3.4 USD per GB.

Is mobile traffic really about 5 to 6 times more expensive in the US?

Depends how you count it. The pricing structure of cell phones is pretty unfriendly in the US.

You can get a 1GB plan from T-Mobile for $50; or a $3GB plan for $60 or 5GB for $70 or unlimited for $80. [1]

So, the average cost is close to that $22/GB number, but the marginal cost is closer to $5.

You can find some prepaid voice+data plans, but their prices are not particularly competitive in the 2GB range.

I did find some cheaper data-only plans from T-Mobile at $10/GB[2], but that's not really what people are buying.

[1] http://www.t-mobile.com/cell-phone-plans/individual.html

[2] https://prepaid-phones.t-mobile.com/prepaid-internet

The so called Walmart plan is cheaper:

https://prepaid-phones.t-mobile.com/other-prepaid-plans

(And fairly popular as prepaid goes)

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