Brands need to fire adtech | Hacker News Reader

Brands need to fire adtech

artplusmarketing.com

242 pointshunglee2159 comments

I feel like the author of this article is missing the reasons behind the rise of adtech in the first place, and doesn't really address how traditional advertising can compensate. There are at least three forces at work here:

1) People straight up don't want to see ads. Ad blockers, Netflix, etc. are a natural response to this. If your medium relies on traditional ads, there's an increasingly large chance that your audience won't ever see those ads in the first place.

2) Companies want to know that their advertising dollars are actually producing results, and traditional advertising completely sucks at this. If you've never run a traditional ad campaign, I suggest giving it a try and then decide how much value you think you got out of it. You can spend thousands to millions of dollars and have absolutely no idea if your money impacted sales even the smallest amount. Compare that to adtech, where you get real data on outcomes on a regular basis. Even if it's crap data, it's often better than "well we think the brand is stronger now".

3) Traditional mediums for advertising are dying out quickly, especially with younger demographics. Newspapers used to be the prime advertising medium, and now most of them are guilting, begging, or strong-arming people into viewing their ads online. Magazines readership has been declining year over year for at least a decade. Live broadcast TV viewing among younger viewers has been flat or declining as well. Where are you supposed to find captive audiences willing to sit through your golden-age traditional advertising spots?

I agree that the adtech industry is slimy and in desperate need of a shakeup, but idolizing traditional advertising while ignoring the difficulties of ads in today's world doesn't really help here.

> Companies want to know that their advertising dollars are actually producing results, and traditional advertising completely sucks at this. If you've never run a traditional ad campaign, I suggest giving it a try and then decide how much value you think you got out of it. You can spend thousands to millions of dollars and have absolutely no idea if your money impacted sales even the smallest amount. Compare that to adtech, where you get real data on outcomes on a regular basis. Even if it's crap data, it's often better than "well we think the brand is stronger now".

They want it this way. My company at its core relies on traditional advertising. Our leads are finally at the point that we're roughly 1:1 between traditional and online.

We've built tools to determine the effectiveness of our traditional ad spend so that we can better target our spend, but we're getting a ton of resistance to us using them. This is from our own internal person who has been running the traditional side of our ad spend for 30 years. Every player in the traditional ads game benefits from keeping the people controlling the spending completely in the dark.

I spent a few years working closely at a regional ad/P.R. firm in a smaller metro, and the game was to convince companies to spend because their competitors are spending. Although there might be good tools out there to measure results, it would only create more work for an ad staff that already has received buy-in from traditional advertisers. (Although that's changing now.) Disrupting that non-measurement disrupts the steady stream of, what is IMO, clueless revenue that's been F.U.D'd into an ad spend. I mean, F.U.D. was the business model half the time.

Is your spend also roughly 1:1 on traditional and online? In my own experience qualified lead gen ROI has been significantly higher with online.

Traditional dwarfs our online budget. That said, online is still significant. We're bidding on 3 of the top 10 most expensive google keywords.

What kind of tool do you have to monitor traditional ad spend? According to op this should be impossible.

Most large companies use a quantitative model with various inputs and outputs. For example, if you know you spend X in market Y, but not market Z you can measure lift within some confidence level between the markets. Imagine a model with every market, and sku, plus the inputs also know where you spent ad dollars and on what product.

Definitely quantitative. And just like everything with advertising, you run experiments constantly.

We also have this fun problem where nobody's actually been verifying that TV ads actually run when they're supposed to. We have physical offices in all of the locations we advertise for the most part, so we're talking about setting up slingboxes and programmatically verifying that our ads actually run.

There's various companies that do this for you as a service, including verifying the reach across market research panels.

If you want a fairly raw build-your-own solution you could speak to someone like TVEyes who'll give you an mpeg or mp3 feed from 100s of channels across the USA.

If you insert a fingerprint into your advert audio, you can then auto-detect plays across the entire country.

>We also have this fun problem where nobody's actually been verifying that TV ads actually run when they're supposed to

Have you considered hiring Kantar to check if the ads are running? They do this.

Thanks for the suggestion. We have a lot of markets that we'd have to check and I imagine it's cost prohibitive. It's actually a very easy thing to build.

Moreover, we're kind of the big company in this space. We own many of the billboards we (and our competitors advertise on). We have multiple different platforms that we sell to our "competition". They're 10-20 years behind us in tech and the budget/desire to get there. It makes sense that we build this ourselves and keep it that way.

The "some confidence level" is the problem - how do you come close to quantifying and removing all the other effects that are involved? This stuff always just becomes something that can be debated away if the advertising lead is popular, or otherwise used as an excuse to fire him/her.

Multifactor model

Two ideas:

1) Coupons or discount codes in print and tv/radio ads (or using a unique URL, phone number, etc.)

2) Simply watching to see if leads traffic (however you define it: foot traffic, hits to website, calls, etc.) surges in the period post ad campaign (assuming you stagger your campaigns for better individual campaign tracking)

#2 is the right way to do it and how we do it.

#1 isn't an option for us because we don't take upfront payment, or really any money directly, from our clients. Tons of companies try this and it's expensive and doesn't convert well for everyone. In certain kinds of sales pipelines this works, but many times it's just people searching for a coupon code online and you don't get accurate information about what converted.

> Where are you supposed to find captive audiences willing to sit through your golden-age traditional advertising spots?

Uh, nowhere? People already ban ads wherever they reasonably can, in part due to the fact that excesses like popup ads, layer ads etc. have been encouraged and adopted instead of dropped and people just are fed up with being treated like a walking dollar machine.

The only reasonable ad slots will be where people literally cannot block them - which means in the meatspace. Classic old advertising columns are on the way of being replaced by shiny flashy LED screens, same for public transport information systems (e.g. Munich, https://www.mvg.de/services/fahrgastservice/fahrgastfernsehe...).

It will get really interesting once outdoor advertising can track people... but thank God, even in surveillance-friendly UK this stuff doesn't hold for long (https://www.bloomberg.com/news/articles/2013-08-12/snooping-...).

Unfortunately, the is another space where ads are going to appear: in content... I am not talking about being blended into the content itself. Think paid placements in movies. podcast/youtube sponsorships etc.

> Think paid placements in movies. podcast/youtube sponsorships etc.

Well, product placement in movies is well known. Nearly everyone should know that companies pay millions of dollars to e.g. have James Bond drive their car.

What is way more evil is that what is called "influencer marketing", which you are addressing in your last part. It's especially evil because the target group for "influencers" is usually little kids.

But, once again, regulation comes to the rescue - at least in Germany, it's outright illegal. To quote §5a, sect. 6 UWG (law against unfair business practice):

    (6) Unlauter handelt auch, wer den kommerziellen Zweck
    einer geschäftlichen Handlung nicht kenntlich macht,
    sofern sich dieser nicht unmittelbar aus den Umständen
    ergibt, und das Nichtkenntlichmachen geeignet ist, den
    Verbraucher zu einer geschäftlichen Entscheidung zu
    veranlassen, die er andernfalls nicht getroffen hätte.

Translated (roughly, IANAL):

    He acts unfair, who hides the commercial purpose of a
    business transaction as long as this is not obvious
    from the circumstances, and the hiding is able to
    trick the consumer into a business transaction he
    would not have done otherwise.

The illegal act hereby is, e.g. as a youtube influencer, hiding that you were paid by an advertiser/vendor to promote a certain item in a "review", because an unsuspecting consumer may not know that your "review" is bought.

This is the reason why "sponsored content" is clearly marked as such in German newspapers. Youtubers, on the other hand, have mostly ignored the law (and I'm happy for the day once someone uses the law to shut down the more obnoxious of the bunch like BibisBeautyPalace).

I'm curious how effective this law is. What is the threshold for "not hiding commercial purpose"? It doesn't seem like a very high one from that translation (though that could just be a language thing.)

Especially when you consider targeting kids, is the result of this law actually effective in making it clear to them that something is an advertisement?

Quite effectively in the "classic media space", it kept "Schleichwerbung" (paid, but unmarked as such, content, and the mentioned evil forms of product placement) at bay in the major media (newspapers, TV, radio and their respective online sites). There have been some scandals when someone did try to fool the system, but you always get these. Mostly these cases additionally involved corruption.

Regarding the "new form of media" aka clickbait youtube junk, weird blogs etc., however, it has not held up, for a couple of reasons:

- these participants often don't have imprints so it makes filing a lawsuit pretty difficult

- filing a lawsuit according to UWG is allowed only for competing companies (and they have to be competing with the advertiser, in the same areas of business!) and consumer protection agencies. No one likes an internet shitstorm for "going with the lawhammer after 16 year old youtube kids".

- there are just too many small-scale offenders, it's not worth the effort to go after them

It should be well understood by now that when you hear or read anything good about a brand or product online, 99% of the time it is a paid advertisement. Paid content is the norm. You are right though, it sucks when kids are the target because they can’t understand.

the US has had "truth in advertising" always since before the Internet, but here they always fall down because cases go to court and the judge rules that "people should know that this was a lie, so it's not deceptive in an illegal way"

> going to appear...

Ads are already heavily present in those areas already. Many media outlets have "sponsored content" already. Movies have been doing both blatant and subtle placements for a long time too.

Console games have had embedded ads and vicious product placement, and some games are entirely based around brands (see most sport and racing games for the last 20 years)

How is that unfortunate? One of my favorite Youtube channels recently picked up a meal-prep-delivery-thing sponsorship, and they work it into the content well - it's obvious that they're jamming it into the program, but they manage to remain funny while doing it. Much better than rolling my eyes for 15 seconds during an unskippable pre-roll.

Because being obvious and funny about it is so rare that it's practically unique. What most advertisers want and pay for is "native advertising," i.e. ads masquerading as normal content. When native advertising is done "properly" you have no way of knowing if your favorite YouTuber actually likes the product or is just being paid to shill it. That's unfortunate as hell.

Of course you know. The answer is always "They are being paid to shill it." unless they have invested in cultivating a reputation of independents, like Consumer Reports.

The youtubers I respect (best content), have the format:

1. main content.

2. "Here comes an ad for X"

3. mildly entertaining ad for X

FunHaus?!

The one and only!

I see ads on facebook so that I can laugh at how badly targeted they are. I don't believe this ad'tech' hype for a second, because there isn't any actual intelligence it it.

Right now Facebook suggests I like some furniture store - it should know by now that I don't give a shit about furniture or shoes or womens clothing, just because I am friends with people who do (mostly, funny enough, women).

Really facebook knows just about everything about me, yet they have never come up with an ad for a product I wanted to buy.

My Facebook and every other site with adtech tends to spend most of its time filled with ads for the last major purchase that I researched online and then bought something for, often advertising the exact thing that I just got one of and won't need to replace for years.

A.K.A the Amazon Suggestion Effect ("You just bought a fridge, here are 12 more fridges!"). I thought Amazon was keeping their suggestions dumb on purpose, so as not to appear too creepy, apparently I was overestimating how smart adtech is in general.

I always assumed they showed those ads in case the order was cancelled or returned.

Never attribute to intelligence that which is adequately explained by stupidity.

It took about six months for the online mattress ads to settle down after I quickly (within a day or two) researched and purchased one. I recently purchased an expensive pair of headphones and I suspect to see those for the next several months.

Often its not even smart enough to pick up on things you're really going to buy. A few months ago I did some research on designs for folding wooden tablet stand to base my own build on, and one of the images I clicked on from Google Images shows up to this day as one of the prominent ads on every Wikia fansite I visit with that particular computer. I didn't even visit the store it's sold on, and they're still clinging for dear life to this one scrap of information on what I might buy.

Do you use adblockers or other privacy tools? It'd possible that marketing companies simply haven't recorded information beyond your Facebook friends.

Anecdotally disabling blockers drastically improves relevance... though I still block them because relevant ads are as bad as untargetted ones.

they know, they just dont care. ads on fb are ridiculously cheap. They have soooo many impressions relative to the number of advertisers. So your furniture company says 'target everyone over 21 cause why the hell not, it costs barely more than doing an intelligent campaign'. Also, their click through rates are terrible, so you end up needing to spam as many impressions as possible.

Funny. Facebook is scarily good at targeting me, to the point of it sometimes being almost unnerving. All this despite the fact that I'm on facebook maybe a couple of times a week and post stuff maybe a couple of times a year.

Facebook is probably one of the only sites where I've seen an ad and gone "wow, I was actually looking for one of those"

I sometimes get that, if I was looking something up on a shopping site earlier in the day, from that same computer. It's almost always the thing that I was looking up for someone else, or the thing that I bought the week before. There's rarely something that seems particularly thoughtfully targeted.

Then again, I have a policy of not "liking" any kind of brand, group, or anything, don't post links to outside sites, and I randomly mark ads as offensive.

The unique thing ad tech does over traditional is provide info on if you clicked the ad, visited the site, etc. marketing to specific demographic is nothing new.

> Companies want to know that their advertising dollars are actually producing results, and traditional advertising completely sucks at this.

The argument can be reversed though: Despite the fact that traditional advertising is more or less blind to outcome and shows untargeted ads, it has survived for a very long time. This would indicate that businesses would be willing to pay to show untargeted dumb ads online too (if no other option exists).

Big brands will always be able to afford dumb advertising, like sponsoring the Olympics. adtech exists mainly for small brands, of which there are many, many more.

Adtech enables a cottage industry of web sites that can get $100 or $5000 in ad revenue. It also allows small companies to advertise for e.g $100 or $5000. So if adblockers or something else kills online advertising and makes it the same as bus stop and magazine campaigns then without a novel form of micropayments a large fraction of the web will disappear, and a ton of business won't be able to advertise online at all. Getting rid of the whole adtech industry as it looks today would still be a very welcome change.

I would argue that's a different type of advertising.

Some campaigns are designed to increase some tangible result: more leads, more sales, etc.

Other campaigns, such as your Olympics example, are more general brand awareness and brand reputation/prestige building.

Or, that those advertisers are targeting a demographic that still prefers older mediums over the internet.

I don't think that adtech is offering anything more than a lateral move. Instead of hand-waving and tarot cards, now it's lying spreadsheets and "targeted" ads that we all joke about because they're about as targeted as a SCUD. It's just another way to get ad money out of people who aren't ready to accept that advertising is dying. Sure, for a while you can "sponsor content" and all of the other tricks, but eventually people get used to it, and they block everything else.

Basically the issue is that the argument, "You don't want everything to be a subscription/walled garden do you?!" turns out to have, "Actually yes, given the other options, yes we do!" as an answer. Especially when it turns out that the price of a subscription is highly negotiable when everyone is negotiating, and piracy exists.

Fantastic points.

I still cannot envision a world 100% without advertising, but my guess would be that the future would be more covert advertising, in the form of product placements etc. On the other hand, I think as the world becomes less materialistic (because it just isn't cool to hoard stuff now), perhaps the impact of having James Bond drive an Aston is going to become reduced.

I will happily pay for Spotify, because it does what it says on the tin: all my music in one place, fuss-free and then it gets out of my way. On the other hand, Netflix is now boring because they don't have all that I want, and so both Netflix and the Movie/TV licensing companies lose my money.

I really like your last point. The price of a subscription should be highly negotiable. The world is a more convenient place now (for a certain percentage of the world's population, admittedly), and expectations have shifted accordingly. Figure out a way of making me not jump through hoops, or you will lose.

>2) Companies want to know that their advertising dollars are actually producing results, and traditional advertising completely sucks at this. If you've never run a traditional ad campaign, I suggest giving it a try and then decide how much value you think you got out of it. You can spend thousands to millions of dollars and have absolutely no idea if your money impacted sales even the smallest amount. Compare that to adtech, where you get real data on outcomes on a regular basis. Even if it's crap data, it's often better than "well we think the brand is stronger now".

The data to do this already exists in many cases.

For example, Google, Facebook - both know when people visit a location, and could cross-reference this with store visits now. If advertising exists in a physical location, and is effective, there is the potential for either of these companies to determine whether the customer visited a location where that physical inventory exists.

Traditional advertising only sucks at quantifying results because "new media" has no incentive to share the loads of data they are now collecting.

But how do you know if they were exposed to the advertising? You don't. Even if you did, how do you know they actually saw it/were paying attention? You don't. And even if you knew that, how do you know that it was because of that particular ad that they ventured to your location?

That's also true of 99.99% of digital ads. Plenty of businesses are using attribution models that aren't that deterministic.

This is my current hesitancy with "view through conversions" and the industry's rather, optimistic, definition of an impression (especially when running remarketing with VTC... essentially paying to target people who have quite likely found us via organic means and aren't being influenced by our ads). Currently trying lots of experiments with direct, tracked clicks from specific ads through to the CRM. Seeing only a handful of ads get any kind of direct click > conversion response with a reasonable attribution window.

So a larger scale programmatic campaign is either a much earlier part of the pipeline than a lot of the adtech companies would have you believe, or is fairly pointless.

Depends on the objective of the media buy. In digital our goal is awareness and perception, not conversion, and we can measure lift in those metrics.

This was literally the nature of advertising for the first 99% of its life.

> 1) People straight up don't want to see ads. Ad blockers, Netflix, etc. are a natural response to this. If your medium relies on traditional ads, there's an increasingly large chance that your audience won't ever see those ads in the first place.

People actually do want to see ads in certain contexts. In many cases, they actually buy magazines like Vogue where it's filled with hundreds of pages of ads, because of the ads. People also buy local newspapers because of the ads & coupons.

The context where people want ads are shopping contexts. If you design your media property around a shopping context, featuring buyers guides or exclusive shopping info, the public will be more appreciative of your ads.

>People actually do want to see ads in certain contexts

Context is very important. That's why 'other recommended products' on sites like Amazon are important. They are a form of ad, but most people don't see it as one, and they don't mind it.

People hate ads that attempt to capture your attention that are completely out of context. If I'm reading about network switches and flash ad for makeup pops up it annoys me. If it tries to exploit my computer it makes me ban all ads.

>People straight up don't want to see ads. Ad blockers, Netflix, etc. are a natural response to this.

Is Netflix totally ad free? I've gotten the impression they were paid for product placement a few times. (Ex: Frank Underwood plugging Sony)

Very few mediums are totally ad free, and Netflix is no exception. If a movie or TV show on Netflix (including their original stuff) has product placement, the product placement remains a part of the media and is not altered. That would be generally prohibitively expensive. I notice this especially with criminal investigation shows, where for some inexplicable reason the whole division is using iPads, or every monitor you see features a prominent Dell logo, etc etc.

Its worth pointing out that until recently, as I understand it, most forms of product placement were not allowed in the UK. As such, many american tv shows and movies literally had scenes cut out. Turns out, it rarely seemed to affect the content, but perhaps thats because anything important got another take without the overt product placement

If it's their original stuff, it wouldn't be cost-prohibitive to remove the product placement. They'd just have to not put that in in the first place

Definitely not totally ad free. Love s2 had like 5 uber placements.

Their licensed stuff does but they can't rightfully edit it out since they didn't create the content.

I also noticed a ton of Windows phones in the latest House of Cards season.

I'm not sure why they'd have used so many if it weren't a paid product placement. The phones were much more numerous in HoC than they are in the real world.

I think this is spot on. And some people are willing to pay. Another example of this is Youtubers and Patreon. Now, you can finally block ads without guilt and support those creators far more reliably. If the number of supporters dominates the ad revenue, it also encourages more quality and less quantity.

For me, this is also where Youtube Red failed. It isn't transparent enough and I couldn't care less about all the "value-add" they tried to staple onto it. I'd rather pay ~$20/month distributed among roughly 6 channels via Patreon. Although it would be really nice to have a way to automatically give a few cents go to videos I watched and enjoyed (by some opt-out metric, e.g. watched more than 30%, or didn't hit dislike, or wasn't autoplayed "next up").

"some people are willing to pay"

Isn't it a little perverse that the willingness of people to pay to block annoying ads provides an incentive to make ads ever more prevalent and annoying?

http://www.smbc-comics.com/comic/2012-01-12

Depends on your threshold for annoying. While there are terrible ads, I think Youtube is okay. And I don't see it as an arms race at all. It could be a win/win situation.

For companies, getting people to watch video ads is a win. For content creators, it's a win cause they get paid. For Youtube, it's a win cause they have a revenue stream. For viewers, it's a win because they don't have to pay anything.

The problem is in many cases, if you did want to pay, either to get rid of ads or to support content creators in a greater way, there's not much choice. (Which is puzzling as for a walled garden like Youtube the solution is much, much simpler than for the web.)

And some people are willing to pay.

How much would it cost to offest the advertising income loss?

> If your medium relies on traditional ads, there's an increasingly large chance that your audience won't ever see those ads in the first place.

Often I don't care about ads. What I care most about is performance and usability. I don't want to wait the five seconds it takes the ad network to serve up an ad. I do not want hundreds of tracking scripts served from some ancient pre pentium box to make this worse. I also do not want to close 20 pop-ups.

Give me a nice eye catching traditional ad that just sits in the corner and leaves me alone any day. The cancer that is used for ads currently can just drop and die.

Adtech, I'd say, is less slimy than traditional advertising. With traditional ads, you pay for the product (newspaper, TV, etc.), and then you _also_ see ads on top of that, and significantly more than you'd see nowadays at that. As the cost of running an entertainment service have decreased, ads have become noticeably better. That said, adtech still fucking sucks, but I'd rather that than TV's alternative of almost as much ads as there is content.

  I'd say, is less slimy than traditional advertising.

Eh, traditional newspaper-billboard-and-broadcast-TV advertising doesn't try to follow me around and build an identifiable profile of me personally* - or serve up viruses then claim they're unable to stop doing that.

The only virtue of online ads is you can remove them with an ad blocker (and that's not a benefit I've heard ad companies promoting).

*Obviously, there's still some profiling, but it's orders of magnitude coarser than Google has.

If Netflix was free but with ads (with ad-less subscriptions optional) their viewership and subscriptions would skyrocket, and end up supporting traditional advertising on a modern medium. The only thing I see in the way of something like this is ISPs refusing to give Netflix the bandwidth needed for something this massive. For this to be a possibility either the FCC makes ISPs a utility, or net-neutrality is repealed.

Free but with ads is Hulu. Netflix crushes Hulu. Netflix is massive for three reasons. Original content, binge watch/no schedule, no adverts.

You forgot "very cheap". Compare the price of a monthly netflix binge watch session with what it would cost on Amazon, or God help you, iTunes or Google play.

It's like 90% cheaper.

The reason for this is obvious on the Netflix balance sheets. They spent 3-5 times what came in.

Of course, this is not what the content producers want. And that's where things have gone wrong in the past, and will go wrong again.

You're just describing why a) YouTube or Hulu is so popular, b) why they suck, but somehow c) they haven't brought down the internet yet.

In fact, Netflix and HBO are virtually the only people who actually allow you to reliably avoid ads. Even Hulu finds ways to force them down your throat when you pay.

If Netflix turning free would produce the kind of business or revenue that you imply, why haven't they started doing it?

I think the appeal of Netflix is that they aren't beholden to advertisers.

Thank you..

I used to work at a AdTech company. At the start of a campaign, we would put a lot of work into getting the ad campaign to show up on a highly curated set of apps that had desirable user for the campaign (men like sports score apps, women like whatever). But, near the end of the campaign, if we were getting paid for X clicks (or horror of horrors, paid per conversion) and the campaign was not projected to pull off the deal, we had to open it open to a sea of garbage apps to hit the target.

There is so much fraud. There are apps out there that are known to be mostly bot users. I was trying to free up some drive space by removing art assets from campaigns that had ended months earlier. Several campaigns had the banner art turned off so there is nothing to click that were getting hundreds of clicks per day. There was just a bug in the click fraud bot that forgot to check if the art assets was still live that was just hitting the click URL blindly.

I skip all the ads too.

I think this is the real issue. Companies would rather reach 100 real, interested potential customers than 100K "users" that are all fraud and views on click farm pages. At the end of the day, it is about how many people come out of the bottom of the funnel and become customers, not simply the number dropped in the top. At this point, it is hard for ad tech to take this approach because customers have come to view clicks as almost worthless so they hope a few real people fall down through all the fraud.

There is a huge opportunity for someone to disrupt this space but it will take a new approach. It is hard to evaluate context when a lot of the web is just crap and screen scrapes of other sites and they all look the same. I think companies would actually pay more for the right system if it really moved the bottom line.

My favorite version of nonsense in ads is the current mobile space.

Assuming mobile data is $10/GB, a 1MB video ad costs the end user 1 cent. Quality (though not premuim) mobile ad space has a CPM of about $5, or a cost per impression of half a cent. So whenever you see an ad in a mobile app and you aren't on WiFi, you are paying 1 cent to use the app _and_ watch an ad and the publisher is getting less than half a cent (ad rev share) from the advertisers. The end user and the publisher would be better off if they just paid the publisher half a cent directly.

> Assuming mobile data is $10/GB, a 1MB video ad costs the end user 1 cent.

Yeah and then the ads aren't even remotely interesting - most of in-app video ads for me are uninteresting-as-... F2P games (Clash of clans and countless variations - just how in blazes do these actually make money?!).

But what I find even more annoying: that there apparently seems to be no way for the in-app ads to check if I already have a certain application installed. It's wasted money for Deutsche Bahn to spam me with ads for their (actually highly useful) app when I already have it installed... but then again, it's bad for privacy if any adtech company can profile me based on the set of apps I have installed.

> just how in blazes do these actually make money?!

Read this, and the other posts this guy has written. He has worked with a number of F2P companies on designing and implementing their business model, always trying to get them to build nice systems, and has learned a lot about the inhuman ones.

http://www.gamasutra.com/blogs/RaminShokrizade/20130626/1949...

TL;DR: Almost all F2P games, except for like 10 or so on the PC, exploits brain faults common to almost all humans. They lead them from a fun skill-based game experience to an abusive "pay to be able to play at all" model. (Like in arcade machines, only lives are disguised as power ups, and easily gained without cash early in the game cycle.) If people started out in the latter mode they'd balk at paying for an unknown, but this way they're driven to stick with it due to the memories of the start, as well as the thinking of "i spent this much time already". (sunk cost fallacy)

> just how in blazes do these actually make money?!

I'm guessing they expect to make it back on the occasional whale who can't control their spending on these types of games.

Exactly. They extract money by addicting people and taking advantage of them. It should be criminal.

While in general I support your opinion, there is one critical question: where should the line between legal and illegal be drawn?

For example, consider DLCs, a form of IAP. In the Fallout universe, what you get as a DLC would in other franchises be an entire game... should this be made illegal too?

In my opinion, not - but instead it should be made illegal to ship games with bus so serious it requires weeks of waiting for multi-GB patches so they're barely playable...

Almost nobody thinks of DLC when they talk about F2P games, except for the people making decisions in the Google Play store dev while being clueless and divorced from the actual market.

I think there's no need to worry about or bring that up.

I'm not talking about a definition for nerds, I'm sure everyone on this forum knows the difference. I'm more after something that can be presented to a politician and be acted upon.

And most politicians either have no clue or don't care about the difference between DLC and IAP, for them it's the same - you pay for "new" content in a computer game. Have enough voters complain to them and they'll cluelessly enact crap as laws.

Well what's getting quite popular these days is the concept of a "loot box" which is where you spend some real money to get a box of unknown items.

When you open it you get a randomised, by whatever factors, set of items/powerups/whatevers. It adds a bit of a gambling aspect to it where a user might want to pay again to have another roll of the dice.

That's pretty easy to distinguish

I'm not sure if i disagree or not, but you're diving into a veritable pool of what-ifs there.

> Clash of clans and countless variations - just how in blazes do these actually make money?!

Typically, 1-2% of userbase is paying, but a typical LTV of a paying user in a successful game is $50-100. CPI of $5 and even $10 is quite acceptable for the top products.

the poor guy who's kid spends $300 on in purchases ends up subsidizing 10,000s of users.

> Assuming mobile data is $10/GB

That is incredibly steep though. I pay around $1/GB in the UK, which gives the publisher a nice margin, no?

I pay 10$/300MB in Canada on a major carrier.

You live in a place with a competitive market.

Youtube is used horribly by advertisers. Don't make a video ad that plays before the content that people can't wait to click Skip. Just make a video that's entertaining/informative and post it to youtube. People will share it for free and watch it willingly.

I work at an advertiser. Most so called "viral" ads we've researched involve significant levels of paid impressions before they got to a "viralable" level. There ain't no such thing as a free lunch.

Also it's significantly difficult to make a highly entertaining ad as well as convey your product benefits/superiority at the same time - strains creativity of the ad agencies though some are adapting faster to the online ad formats more than others.

At the end of the day all those "emotional equities" that highly engaging and emotional ads convey have mainly a role in creating a positive image around your brand - making people actually buy is very difficult without actually conveying your product's value and benefits.

Who would have thought that actually adding value to peoples lives is hard. Much harder than paying someone to force others to see something.

Sarcasm aside, sadly, if you build it they will come doesn't particularly work.

Say you're made a new flavor of ketchup. Your product tests show people love it much better than anything else in the market. Arguably you are adding value to those people's lives with it.

Now it won't sell at all and recoup your investment and arguably actually add value to people's lives unless they know about it and try it - hence advertising.

One of the wierd things about a network is that, no matter how much you scale it, there are always only ten "top ten" slots on it.

(Or 100, or 1,000, or ...)

Clearly, we're going to have to throw more resources at this problem to break a stubborn scaling bottleneck.

> There ain't no such thing as a free lunch.

You can't even pay to have people watch your ads anymore. Isn't this the death of the industry as we know it?

I don't want to see ads. Period. In fact, I pay for YouTube Red & Google Play Music specifically to avoid ads. Ads suck.

You make it sound so easy. You should be in advertising so that you can show them how easy it is. The truth is good ads are hard to come up with and the ones that really strike gold go viral [1]. I'm content that I can at least skip them after 4 seconds.

[1]https://www.youtube.com/watch?v=PA_An6LcWtc

If it were trivial to make entertaining/informative ad copy, I imagine more ad copy would be.

I think the solution for the google / youtube issue would be to have 2-4 tiers of content. And let brands decided what tiers their Ads are displayed against.

Tier 1 Vetted - Google marks a video for vetting when it has enough views. A Human checks the video and approves it. This lets google charge more for the "trusted ads", especially as selection bias means they will all be well above average in popularity.

Tier 2 Partner Network - Google delegates to the channel / network / partner to verify the content. This allows major partners to post content without needing it to be google vetted. Google ties this into the royalties payment so violation of this can result in financial penalty / being kicked off. If a video is reported it is immediately marked for vetting.

Tier 3 - Unverified. This is where majority of new content goes. There are plenty of brands that are less concerned about being associated with the random mix. As the general quality will be down the ad price will likely be lower, but these are the

Tier 4 - Unsuitable for major brands. This is for any content that has been vetted and is ok as far as Youtube's TOC, but inappropriate for major brand advertising. This will likely not generate a large amount of ad revenue, however being marked as a tier 4 video means you will not earn much, so it won't be produced by ad supported content producers. If this content is appropriately tagged you might be able to sell the ads to the opposing view. This pro-life vs pro-choice. The main reason this tier exists is to protect the dollars from Tier 1 & 2.

The vetting system could even have certain tags to mark content of certain types. I.e. you could allow a brand to not advertise against political material, however you would charge more for the placement of more targeted ads.

The system will push the vetting onto content producers while maintaining a pretty big (financial) stick to keep them in line.

Advertising is a race to the bottom. The way I shop is I figure out what my needs are, I survey the state of the art, I narrow down some options, compare them (price, stats, reviews, company rep, etc.) and then buy.

Advertising, on the other hand, exists to subtly influence an emotional, impulsive, subconscious choice, and it's far more effective in the macro. The problem is that when your brain is engaged, you resent advertising and it has the opposite effect on you. Once you're wise to it, it just sours you on the whole thing.

Advertisers could cultivate a lot more loyalty with me (and I assume most people) if they made honest pitches. You know, "hey you're looking for an x86 NUC with 2 ethernet ports, here's what we got, also here's some other socially responsible things we do". Anything past that ought to be banned.

You can see the effect this has. Look at ever increasing ad budgets by large corporations, or small businesses wasting precious resources trying to compete with the huge ad budgets, people's general cynicism about businesses and endorsements, etc. It has an undermining effect culturally and an entrenchment effect economically. It's honestly just all bad.

You are never as rational as you think you might be when it comes to shopping or anything else.

And advertising drives the economy and is quite literally the reason the company you work for is in business - so it's just not that simple to say "it's all bad" because it isn't. In fact it's quite the opposite.

Yeah my post gives that impression, but I know that rationality is elusive: people are very suggestible. That's precisely why I think we ought to protect people from advertising.

I don't accept that business requires manipulative advertising. I don't want to get into the weeds of "what is advertising anyway?" or "if no one knows about your products, how can they buy them?", so let's just stipulate that there's "advertising" (i.e. what I describe above) and "manipulative advertising". People are entirely, obviously capable of buying things without a team of behavioral psychologists tricking them into it, and businesses are entirely capable of selling things without manipulating consumers into it.

The problem arises when companies are free to put resources into manipulative advertising; it's a classic race to the bottom. Company A spends $X on ads; Company B spends $X + $Y on ads. We quickly reach the status quo, except we spent $$$ on manipulating people into buying products instead of improving them, wasting tons of resources and probably causing people to spend money buying our stuff unwisely by preying on their hopes and insecurities. It is at least unfathomably wasteful, and maybe also evil.

(Also -- and this probably comes off as more hostile than I intend it to -- you don't know anything about me, if I work for a company, if I'm unemployed, if I work for a government, a university, etc. You can argue that modern business requires advertising without making assumptions like this).

Some people may be.

But the vast majority, who feed the dynamic, are not.

And hence the downward spiral.

What downward spiral? This isn't unique to adtech, this is human behavior. We all influence each other.

When your friend recommends a product, they are influencing you, but might not know what's actually good for you or what your needs/wants are and might not even be honest with you. At least with advertising there are some standards and it's that same human behavior/influence harnessed and purchased through technology. Politics, news, communications, etc. It's all the same.

Advertising companies do not act in the interests of consumers. We're not their customers. Any benefit is totally coincidental. The following would be helpful to us:

- "These products from a different company look more like what you're after"

- "Based on your income/debt/bills, you probably shouldn't buy this"

- "A better version of this will be out in a few days, just wait!"

- "This product explodes, buy this other one instead"

Of course advertising companies will never do this, because it would be acting against the interest of their actual customers (companies). Can I even hire an ad firm to help me shop? The very idea sounds ridiculous. It's just not what advertising is for.

Advertising exists only to convince more people to buy goods and services. It specifically employs devices to do this even if:

- the consumer doesn't want or need them

- the consumer can't afford them

- the consumer could get a better deal or product elsewhere

- the product is defective

Advertising is really good at reframing this stuff (your post is a pretty good example of it actually), but given these facts I don't know how to think of advertising in positive light.

Adtech is partly the result of CMOs over-optimizing for measurability.

Marketing & advertising has had a long standing reputation as an unmeasurable activity, half of which was a total waste. As the tools to quantify the impact of some marketing activities have gotten better, a new obsession with measurement has been born.

Now we're in a place where the top insecurity of most marketers is the accusation that they aren't data driven.

In the process, they over-optimize for everything that's closest to the last touch, go on a wild goose chase to quantify things that can't really be quantified, and overlook a whole host of things that actually are important, like building a brand and differentiating your offering with the people in their ideal audience who aren't currently on the verge of a purchase.

I think you're using the term "marketing" to refer to promotion, which is just one of the traditional "four P's" of marketing. This is pretty common usage, but it's important to point out that there's a lot more to marketing than promotion, and most of it isn't as questionably valuable or ethical as advertising.

The measurement problem is very broad: it impacts not just adtech, but finance/economics and corporate management.

It's some kind of weird math fetish, no more insightful than if we believed business ideas in French were automatically better than those in English.

I also submitted this great article. I have been thinking of adtech because I have several web sites, and run ads on none of them because I don't want irrelevant material on my sites.

But, since I mostly have content about AI, semantic web, and food + nutrition + machine learning, I would be happy to place ads for specific products and services that I personally like. But I don't know of any ad placing service that, as a small traffic web host, would help me approach companies that I would like to advertise on my sites.

I've noticed a few sites seem to have dedicated sponsors, which are in line with what they talk about.

http://www.xlr8yourmac.com seems you use "OWC" other world computing as its primary sponsor

http://strobist.blogspot.com/ (a flash lighting site) seems to have ads from a few flash companies and the 'midwest photo exchange' and a few flash copies.

I'm not sure how those relationships were built.

In college the newspaper had a dedicated team of people going out to sell ads for the paper. They had a "cut sheet" with information about how many papers where printed and how they were distributed..

You've pretty pretty much articulated one of the reasons for existence of ad tech industry. Inventory on the web is highly fragmented and ad sales one small site at a time is not really scalable for anyone to make a living out of. Hence ad networks emerged to aggregate inventory.

Now you probably have a "real" day job and don't really need to make even the website pay out, let alone make a living out of it. Not so for many other people who do make a living out of content.

Why do you assume what you personally like is what your readers will like?

But relevancy to your sites and readers is what adtech is all about. It doesn't help anyone to have irrelevant ads, they do care about making sure the fit is as good as possible.

Stay away from the crappy "recommended links" widgets and popup videos and you'll find plenty of ad networks that can help.

It took you one sentence to refute your own claim about the quality of adtech ads -- you recommend them and then say don't use the most popular/successful/well-known ad systems.

I'm not sure what you think I refuted here. You realize not every network is the same right?

When it comes to relevancy then yes, many (but not all) ad networks do well at it because irrelevant ads don't help anyone.

But the quality of the actual ad content and user experience matters. There are annoying ad formats like outstream video, interstitials, in-image ads, and more that just arent worth it. Same goes with the taboola widgets, which do work since they get millions of clicks daily, but are usually filled with low-quality clickbait which reflects poorly on the parent site.

The most popular ad networks are the ones that have the lowest standards and run the worst ads because that's how you get more scale. It's simple math and has no bearing on how good they are. And yes you should avoid them if you want better "quality" in both ad content and UX.

Have you look at cj.com?

One of the startup I used to work at is basically slickdeals where they just grab a bunch of coupons from cj and put it on their website.

I'd imagine you can filter the coupons you want from them after they throw a tons at ya and post them on your website.

Was just a programmer so I didn't deal with CJ directly to know how they work.

Ad targeting can be done based on what you know about the content it is displayed against. But it seems like a lot of weight is put on what the network knows about the person accessing that content.

Enabling brands to automatically opt-out of being shown adjacent to content with extreme/hateful views is only part of the problem. Ad tech must also contend with the fact that the audience has many dimensions. Someone who harbors hateful feelings for a subgroup of humanity may also be interested in a sweet deal on a pay as you go plan from AT&T.

I don't know what Searles is smoking (ok, actually, I do -- it's a strong mix called "Remember When..."), but big, battleship "trusted" brands cheat at digital in ways that are every bit as sleazy as adtech. The big guys game the system and rip off sponsors by buying fake traffic and fake engagements to inflate their campaign metrics and suck more money from advertisers.

So yeah, everything that he says about how bad adtech is is true, but the idea that if everyone would just go back to doing big branding-oriented media buys on "trusted sites" then the fraud would magically disappear -- that's nonsense on stilts.

> What Shoshana Zuboff calls “surveillance capitalism” is going to be illegal a year from now in the EU anyway, thanks to the General Data Protection Regulation, aka GDPR. Mark your calendars: on 25 May 2018 will come an extinction event for adtech, because here are the fines the GDPR will impose for unpermitted harvesting of personal data: 1) “a fine up to 10,000,000 EUR or up to 2% of the annual worldwide turnover of the preceding financial year in case of an enterprise, whichever is greater (Article 83, Paragraph 4)”‘; and 2) “a fine up to 20,000,000 EUR or up to 4% of the annual worldwide turnover of the preceding financial year in case of an enterprise, whichever is greater (Article 83, Paragraph 5 & 6).”

GDPR will be "great stuff" because it imposes user protection and grants basic rights.

- individual mandatory notification for possible adverse impact of data breaches

- right to be forgotten -> right to erasure

- data portability (hello ... Apple Health, Google Fit, Microsoft Office extended/unportable format, whatsoever)

- verifiable explicit consent for data collection (purpose included)

These are the things that makes me proud of the EU, and I just wish that GDPR were made more visible to the general public.

Most likely it will turn out as the accept cookie crap every site is now showing. We just have more if those notifications... Nothing to be proud of.

The cookie banner is annoying ... You're right

> https://news.ycombinator.com/item?id=13802068

The last time one of these "ordering services" [https://www.justeat.it] targeted me with ads (via sms), I tracked back the data, crawled the web for their mails, sent them a good list of laws, so they have been forced to reply and delete all my personal data in a timely manner.

Never seen a single ad again, I am unsure this would have worked in the US.

Could you share the list of the laws to send? I find it quite problematic to force companies on Malta to do that.

Please remember that the laws are only modeled on the EU directives, one have to expect a substantial compatibility, but the specific terms may change on a country basis.

One of the aims of the GDPR has been to standardize the protection, zeroing the differences.

http://194.242.234.211/documents/10160/2012405/Personal+Data...

Specifically ask the removal of any information that may lead to any form of authentication (prior or post any processing, the deanonymisation trick is not allowed).

You just need to prove they have obtained your data in violation of anyone of the provisions.

In my case "they incorporated a company, embedding the data in the datastore in such a way that they violated the term of service of the previous company, their own tos (I never subscribed to their website yet they insistently phoned and texted me) and the actual privacy law, adding to this the delete form was unmaintained and didn't work, which is another violation".

Edit: sorry for the multiple updates, I am typing from my iPhone.

Tech companies are taking a lot of heat here, but I think some of the blame here lies with Youtube's content creators.

If I buy ad time on late-night shows on NBC, I know I don't have to worry about Jimmy Fallon opening his show with a diatribe on "White Genocide" or "How feminists are the real Hitlers" or incoherently rambling about LBGTQ tumblr teens in a sweat-stained Starwars t-shirt.

Several Youtube content creators want to be able to freely oscillate between their core content topic (gaming, pop culture, etc) and random "edgy" topics. You're free to do that, and you shouldn't be censored, but you are not entitled to ad dollars.

They claim they're just trying to be "real" and "authentic" with their audiences, but how is it "authentic" to rant against Jews, Muslims, immigrants and neoliberal globalism while lining your pocket with ad revenue from Johnson & Johnson on a global technology platform built by immigrants/1st-gens, many of whom are jewish or muslim themselves? The cognitive dissonance is exhausting.

I think the author is trying to stay focused only on the issue of adtech vs (as he calls it) Madison Avenue ads. You also raise relevant points but they can be separate issues.

Anyhow to your point, I think the problem is that YouTube creators don't really think of themselves as being sponsored by brands. They've internalized only that they get paid to make content people watch. And that's not entirely accurate.

But for all the problems the author identified with adtech it has afforded people such as those on YouTube to enjoy what may be a fleeting era of getting paid to be genuine and uncensored. Perhaps membership fees to the platform that get allocated to creators can succeed here.

I see your argument but I think who's fault it is in the situation is more complicated than that. Yes if the content creators were just doing this for money, they should try and curate and audience that brands want to pay for.

On the flip side, these brands didn't have to jump into Internet advertising. They could have stayed focused on the nice reliable TV show advertising. They want to hit more eyeballs though and the unreliable Internet content is proving more popular with consumers who are the real product when it comes to advertising.

I figure there's going to be some back and forth between content creators and brands looking to advertise until a new equilibrium is reached and all shows fall in line to the new set of norms. After that, of course, a new format will likely arise and consumers will jump ship to the new format after finding the Internets norms too boring

Obligatory: https://medium.com/@RickWebb/banner-fraud-doesn-t-matter-fc8...

"Here’s a message on behalf of brand marketers everywhere.† We know about banner fraud already. We just don’t care. Seriously. It’s fine. I mean, you got us into this mess years ago, and sure, it was kind of annoying, but you know what? It is what it is. To your immense credit, you have adjusted prices downward as you’ve made banners an ever-increasing stshow, so, actually, it’s totally cool. We like them. That’s right. I said it. We like banners. So stop telling us that they are useless. Everyone does not hate banners. You’ve thrown, god, what is it, something like 400 different, new, “better” ad formats at us now. But we keep buying banners. It’s time everyone accepted the truth: we’re not buying banners from you because it’s the only thing you can sell us, we’re buying banners from you because they’re cheap and they work."

This had to happen, but I weep for all the great tech created at Google enabled by these ad dollars that may not have existed otherwise. Hope they can transition to an alternative business model relatively quickly.

Relax, advertising is not going away. This is silly FUD article.

Adtech will be fine but I do think we'll see a bigger shift of dollars into a bucket called content marketing versus traditional ad placement. So think about what Red Bull does with the content they develop and sponsor. YouTube should focus more on that market - helping match their own celebrities with brands and taking a cut of sponsored content versus a cut of ad revenue based on pageviews.

The issue here is really not adtech; it's a conscious decision by Google to disregard the free but horrible speech of users in chasing pageviews and video consumption. And it's now coming back to bite them. I'm surprised it took that long. YouTube comments are vitriolic and a breeding ground for trolls.

People say horrible things in the public streets but billboard and shopwindow advertising is still tolerated there.

Good point. Although in this case it's more connected that the brands are subsidizing content and a site which doesn't care about hate speech and childish discussions. And parents and concerned consumers who like certain brands can easily point it out.

I hadn't heard about the Zuckerberg's claim about authenticity on Facebook was surrounded by fraudulent ads. That's hilarious.

Also, I've never thought about it before but I think the writer's claim that modern ads are really direct response marketing is right on. There is a difference.

It's not even that surprising. Most of the major news sites are stuffed full of ads that look like fake news articles these days. They probably have the sense to turn them off on articles about fake news, but otherwise they don't care. You just don't hear about it as much because news sites don't generally criticise their fellow news sites in the same way they do sites like Facebook and YouTube that are a threat to their entire industry.

Minor correction: Google was summoned to appear before a committee of the UK Parliament, not the Government.

A link to the meeting: http://parliamentlive.tv/event/index/ecd59f92-64b6-4450-96b6...

What a ridiculous inquiry. There are 400 hours of video being uploaded to YouTube every minute and these people think that Google should inspect each and every one of them for hate content. Why don't they go after all of the UK ISP's and carriers that serve hate content from UK based IP addresses?

He really paints a positive picture with the EU law and that big companies are going to shift, but that won't happen. The EU law is a joke and nobody will be really punished by that I assume. I would like too have less spying and the user in the driver seat of his own data, but that won't happen, there is just too much money on the table and the adtech system is waayy to big to just vanish. It's a fucking huge hydra

  > Brands are bailing from adtech

No, not even close. Some ads were mishandled and with the current political climate, brand safety is now a big topic. This cycle happens every few years when the marketing/agency/media buying talent turns over and as new tech develops. At the end of the day, it's just tech. You can use it well or use it poorly.

  > Let's be clear about all the differences between adtech and real advertising.

What? Adtech is obviously not advertising. It's a name of an industry sector that provides technology to do digital advertising (which itself is a smaller subset of the marketing technology sector). There's also no such thing as "real" advertising unless we're now going to call certain types fake.

  > Adtech is magic in this literal sense: it’s all about misdirection.

More nonsense. Generalizing a 12-figure industry that powers a large part of the economy because of one specific platform, type of ad buying and news event is not useful.

Here's the reality:

Advertising (and moreso marketing) is all about finding the right consumers, capturing their attention, and converting that into some kind of action. Modern Adtech is primarily about that middle piece, capturing attention by distributing messaging to the right users at the right time and place. It's just plumbing. Technology that can be used for good or bad.

Also, all advertising is targeted whether it's a billboard or a banner on a website. Technology has allowed us to become much more specific through data and tracking but there are both good and bad examples of this.

When netflix shows you a recommendation for a show that you end up loving, that was a good ad. When you see an ad for shoes you've already bought, that's not so good. Either way it's technology that's being used with 1000s of other factors that produce that end result.

Does adtech have issues? Absolutely. 99% are because it's a global industry without any oversight or regulation. There is nothing that stops companies from running knowing fake ads, there are no fines when they run malware, there are no pushbacks when their JS tags ruin performance, and there is a fundamental mismatch in how media is bought through politics and personal connections compared to the sales and performance oriented outcome on which it is judged upon. These are human and business and industry problems that are neither created by nor will be solved through technology.

"news about it is coming hard and fast"

The difference with this story is its being driven by the media organizations, not by "news" - any actual issue or event.

There is an obvious motivation here, the mainstream media organizations see this as a way to concentrate advertising dollars back to them, and they will paint any major brand that doesn't do so as supporting ISIS/Nazi's.

Google is in a dangerous position here, they probably have the data to prove this is a nonsense narrative, but the media organizations had enough influence to force big brands to stay away. Stuck between protecting their moat, and going to war with the mainstream media.

The people who are making these decisions are precisely the billionaire one percent that has had there agenda disrupted because people are getting information from alternative media that challenges the narrative of the mainstream corporate press.

They would love to get back to the days when they could just throw crap over the wall onto the TV and people had not other sources of information or any way to collectively discuss its validity.

Do we really trust the purveyors of traditional advertising (newspapers, television news, etc.) to be without bias or vendetta when reporting on this problem? It seems to be part of a larger pattern--at least as much of a pattern as the fact that there is trash on YouTube. Military History Visualized's "Economic Warfare? PewDiePie vs. WSJ #YouTube" https://www.youtube.com/watch?v=ewLtRGh2IvM a very intriguing take on what's happening.

And now evidence the the WSJ faked snapshots of videos to prove that ads were showing on offensive content: https://www.youtube.com/watch?v=lM49MmzrCNc

I don't think this author is being fair to direct response advertising. One of the most important pillars of direct response marketing is to target effectively. That means spending a lot of time getting to know your target audience, their habits, the media they actually pay attention to.

Direct response marketing done right should make advertising go from "unwelcome pest, to welcome guest" - mainly because you're targeting your audience so well.

Many people may think they're doing direct response marketing, but that doesn't mean they're actually doing it.

The claim that Corporations have some fundamental opposition to how online advertising works with tracking and spying and personal data collection is total baloney.

No one has made any demands to change how these networks work or to stop collecting data.

What they want is essentially a demonetization blacklist. So that a handful of billionaires who own these companies can hand youtube, facebook and who ever else a list of people and organizations with the 'wrong opinions' and have them demonetized, delisted and otherwise disappeared.

Who gets to decide what is fake news? And who gets to decide what is and is not 'hate speech' and 'extremism'. The Billionaire board members of a few multinational corporations? That's not democracy, its corporate fascism.

This is how the one percent fights back against populism. These people have been given some nasty black eyes in the past few years and there not use to it. There use to running things in the background and now there not getting what they want and the democratic process is not working in there favor. So there going to fight back in any way they can. Including attacking the internet and the ability for people to have there voices heard.

I feel like a lot of people here are really confused about how digital marketing works. I hope I can dispel a lot of assumptions people are making!

Yes, there can be a lot of fraud (not that I've ever seen that much) when it comes to CPC but, clicks most new age marketers aren't that focused on CPC that much anymore.

Instead they focus on CAC (Customer Acquisition Cost) which is essentially how much you paid e.g £40000 and how many customers signed up as a result of that channel e.g 150. So, in this case your CAC would be ~£27. This calculation takes everything from fraud clicks, CPC costs, conversions into account.

CAC is the first step, next step involves working out the LTV for that specific channel.

Finally, the marketer compares the CAC to LTV and the ones with the best ratio are channels we focus on. The reality is most of the time the best channels are digital and targeted.

If any would like me to go into detail about how marketers go about targeting people then I can do that too!

I made my first Medium comment, this article kind of doesn't make a ton of sense and made me a bit mad. Here is what I wrote: https://medium.com/@dillondoyle/first-medium-comment-hope-im...

Specifically in response the the author saying "Real advertising doesn’t do any of those things, because it’s not personal."

That's the opposite of my work/goal in marketing, I do everything I can to make advertising personal, at the individual level. Using deterministic data and 'ad tech' to speak to voters/consumers 1:1 if possible.

And also I hate the way the author kind of just lumps 'ad tech' together without really seaming to understand the current ads ecosystem. I guess talking about anything that's not an IO at a print newspaper or something similar seems to be his idea of not 'ad tech' - but even a 'simple' PMP deal or even an IO involves a lot of ad tech, to find the audience, to match audiences, to plan and execute.

I do think there should be more conversation about ad tech bloat - please don't load 100 http requests for one 300x250 banner, and the amount of 1st party cookies/session data and other data the publishers don't even realize is leaked is insane.

Fuck 'Add This' has made an entire ads data company because publishers are too fucking lazy to paste in their own FB share buttons. I buy addThis audience data all the time. So stupid, why would big publishers need to use this tool - and why don't publishers realize this is a revenue stream they seem to badly need but are mostly not getting.

I assume that there are ad firms between the brands and this adtech. Isn't that typically the case? Shouldn't we be blaming the ad firms and not Google?

Adtech has issues but the idea that traditional advertising which has zero feedback from users is gonna make a comeback seems silly. Paying marketers millions to launch campaigns in magazines or TV when you have no clue how it lands seems more fraudulent to me than Adtech where you can measure user impressions/clicks. This reads to me like a guy in a shrinking market lashing out at an existential threat.

Disc: I work for an adtech business

These articles are all the same, complaining about adtech without any real understanding.

It's just tech, quite literally plumbing, that lets marketers put messages in front of people and see what happens next. The internet has made it more capable than ever but how it's used varies greatly and there are both great and terrible examples.

Blah blah blah thanks for your summary of the articles relating to this... How has his generated so much discussion?

There have been reports that the WSJ articles that triggered this whole thing were fake.

Source: h3h3

I worked as an intern at a couple of companies spending a lot of money on digital marketing, and I was amazed by the assumptions underpinning the marketing 'attribution models' that they used.

Both used 'Last Touch', and apparently this is industry standard for many firms. This assigns 100% of credit for a sale to the last marketing channel that the customer used. For example, if you clicked on a sponsored search/banner advert for the product and then buy, that channel will get 100% of the profit from the sale.

Implicit in this is the assumption that had the advert not been shown, the probability of purchase would have been 0%. This is wildly optimistic. Both were spending a lot of money on 'own brand keywords on Google, and it doesn't take a genius to realise that customers searching for Company X trainers may well have ended up reaching the page and buying, in the world where the ad didn't appear in the top 3 links for these searches.

However, none of this seemed to be clearly conveyed by the very marketing consultants/analysts in the presentations with countless charts and acronyms that they gave to their relatively untechnical managements. My assessment was that both companies were horribly overspending, and I was agnostic as to whether the marketeers where dishonest or misguided.

This has also been studied, and seems to confirm the intuitions I had. In one experiment, Ebay did A-B testing on all of its own-brand marketing paid search advertising and this had ZERO impact on short run sales [1]. Other A-B tests have found incremental sales advantages a small fraction of the values found by these horribly optimistic marketing models [2].

One interesting analogy is with political campaigns. A wise politician campaigns in battleground regions where they have the biggest chance of changing the result in their favour. A wise firm markets to similarly marginal customers. Digital marketing offers the benefit of being able to carefully avoid customers that are totally uninterested, but naive (or dishonest) attribution can cause companies to 'preach to the choir' and then over-credit their marketing activities. Lots of current industry practice would be analogous to a member of the Obama campaign telling him to avoid Texas and campaign in New York, and then congratulating himself after he won with a landslide!

[1] http://cn.cnstudiodev.com/uploads/document_attachment/attach...

[2] http://repository.cmu.edu/cgi/viewcontent.cgi?article=1399&c...

I'm calling it now, we're heading back to #tipjartech

Why are brands so scared of where their ads appear? Does it really matter? Are they measuring it? I swear there are ads left and right on every rap video that talks about killing others, snorting cocaine and snagging women. Why they want their ads appear there but no next to some lunatic creating conspiracy theory videos or whatever the hate speech videos mean.

Can't they just opt out of those categories?

> I swear there are ads left and right on every rap video that talks about killing others, snorting cocaine and snagging women. Why they want their ads appear there but no next to some lunatic creating conspiracy theory videos or whatever the hate speech videos mean.

Because pop culture sells, even the bad parts of it. (especially the bad parts of it when the bad parts are sex, drugs, and violence)

I guess I'm not sure of the value of parsing these fine distinctions between good and bad ads. Doesn't seem like the good kind are winning out. And the solution is that ad buyers need to have kinder hearts? Hmm.

Gresham's Law / Market for Lemons.

Both have very strong information-theoretical roots.

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