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I have been thinking about what would happen if all browsers had perfect ad blockers enabled by default, starting tomorrow. I think years later we would look back and decide that it was the right thing to do, despite the immediate short-term economic damage.

advertising would just shift to product placement in the news you get and affiliate links everywhere. not better. people tend to forget that advertising covers a real need.

People have shown an impressive ability to figure that kind of advertising out. A lot of native advertising on sites like Reddit is outed almost immediately, and then the discussion turns on the advertiser. We could also add protections as they are in the UK requiring “sponsored content” to display clearly that it’s an advertisement.

In short, there’s nothing inevitable about advertising models as they exist today, and people who try to convince of you that they are inevitable are peobsbly trying to sow apathy.

>People have shown an impressive ability to figure that kind of advertising out

This is of course selection buas.

I'll take the other side of that argument. Search engines should put the most relevant products at the top of the page because they are the best fit, not because someone paid for them to be there.

If all advertising disappeared tomorrow, the world would function better. Consumers would not have advertisers trying to manipulate them, and they would more rationally allocate their resources.

Advertising is a tax placed on people who have already bought a product, which made it more expensive, to manipulate other people into also buying that same product.

Without it, good products would succeed on merit / independent reviews / word of mouth.

* The one exception I can think of is possibly during the scale period of startups, helping them scale faster (artificially) than if they just followed the "be the best and it will catch on" approach.

Companies are already starting to game "independent reviews" through incentivized reviews or downright fake reviews, and word of mouth has been gamed with referral programs. Fact is, when there's money on the line, it's gonna get dirty, PPC and banner ads just happen to be the cheapest option.

I'd love to not play the advertising game, but marketing seems to be one of the most important parts of running a business, if not the most important part, and it'll get its grimy hands on anything to acquire users. I'd prefer to avoid the world where they pay people to post rave reviews in HN comments to hype products.

Advertising doesn't necessarily make a product more expensive except where something like cost plus pricing is used.

On the bright side, I think product placement manipulates people in less problematic ways than companies like Cambridge Analytica have been able to do with precision-targeted advertisements. At least product placement needs to involve actual products, and if you try to go beyond that it'll be pretty obvious. Although I guess there's a cross-section here: one of the really sinister details of Facebook's advertising is it gets presented in the same context as pictures of your friend's puppy, so our filters don't engage like they would looking at something that resembles an ad container.

I strongly disagree that Cambridge Analytica has done more damage than advertising. The leading causes of death in the US are preventable. Companies are pumping out disinformation to get people to consume things that are killing them, as well, to spend money on non essential items they can't afford.

I really don't have any objection to affiliate links. If you're talking about something and link to it on Amazon with your affiliate link, rather than a bare link, what difference does that make to me, as the user? You get paid a smidgeon, on something that I would have either bought or not bought anyway, for the same price to me either way.

I think general affiliate links are pretty safe, maybe they might incentivize content creators to hype up products that are more expensive (so they get a bigger cut) though.

Unless handled very carefully, using affiliate links damages my perception of the writer's integrity. When money's on the line, maybe their motivation for writing wasn't to share their experience of finding the best product for the lowest price. In rare cases, like the AppliedScience youtube channel, the quality of content is so high that the affiliate links in descriptions don't tarnish my esteem for the guy.

> people tend to forget that advertising covers a real need

I don't buy it. Advertising is not going to provide me with the service that is the most suited to my need, or with the best value. In fact, quite the opposite: the advertisement that's the most likely to reach me comes from the company with the largest budget for advertisement. That budget eats into either the profit of the company or into the quality of service delivered.

Advertising covers a real need for businesses, (you and I aren't the customer, we are the product). The math works out pretty simply: what is the total profit with 0 advertising vs the total profit with advertising? If you had a magical machine where you could insert a dollar and get $1.05 out, you should be putting your money in there as fast as possible.

It is short-sited to say advertising eats into the profit of the company. When done successfully, it allows for more goods to be sold which increases profits and in turn allows for more research and development and thus better products.

Browser-based ad blocking is pretty easy to bypass for companies like Facebook if they really want to. They already have their own ad network, so they will start serving all content (messages, ads, videos) from the same server with no way to distinguish between them programmatically.

At least, peformance-wise, that would be nice.

In Germany ads must be distinguishable from other content. If a human can spot the difference it shouldn’t be too hard to automate that process.

I like pretty much everyone else dislikes advertising, but it is a genuine source for a company to generate revenue.

I really don't know any other real alternatives other than making the user pay, which would in turn make the internet just basically one big subscription model. The majority of the "free" services which many people enjoy now, like YouTube, Facebook, etc probably could not exist as they do.

What is needed is some clear boundaries (legislation), and education. I believe without advertising that the internet would not have been what it is today, and I don't think it would have exponentially better.

> but it is a genuine source for a company to generate revenue.

That's a common cultural belief that I do not subscribe to, seems to come with our currently trendy variants of capitalism/liberalism. I personally belief it is more akin to a crime that is currently not punished.

> probably could not exist as they do.

More industries have been outlawed in history.

> I believe without advertising that the internet would not have been what it is today,

I can take that as fact. But I do not think that "without ads" (on the internet or not) is "economically worse". I think without ads we would produce better quality; it's complete guessing, but that's just my expectation.

Do we know how much Youtube, Facebook, etc. make in ad revenue per user? It can't be much. If micro-payments are an option, the ability to pay $0.75 a month for an ad-free social network would be fantastic.

I think the problem behind this is that ad revenue is not the same as a subscription revenue. You cannot assume that if a user was worth $3 a month in ad revenue that that would translate to a $3 a month subscription.

For example, I would have no doubt the the customer acquisition cost for an "free" application with advertising is a lot lower than trying to sell that same user a membership.

When it comes to social networks I would suggest that the stickiness is because your friends/family etc are on the same network. It's not if you are willing to pay, it is only really worth it, if your friends are willing to pay.

If you are talking more about a paid and free version, then there are already services out there like YouTube Red (available in some areas for $9.99+ USD). There are always options out there.

What about all the work that goes into maintaining the ad network and distribution, advertiser acquisition etc? That isn't free either.

In the US, Facebook makes $27/user/year. Worldwide it's $6

https://www.cnbc.com/2018/01/31/facebook-earnings-q4-2017-ar...

So $3 a month to turn off ads would be a pretty good deal for them.

For the US, the entire digital ad market is $83B/yr, which works out to $257 per person per year, or $717 per household. Keep in mind that about half of the country's population is "frequent internet users", so that number is almost certainly an underestimate for anyone who browses HN.

For comparison, this number just recently passed TV advertising, which is about $70B/yr ($217/person, $605/household).

Amazon's model wins (this customer). Prime is something that I'm 100% willing to pay for (between shipping, music, video -- again, for this customer). That it comes with WP digital access is a nice add-on. If there were a $10/mo hike in price for lots of other digital access products, I would go without. If the price hike were mandatory to keep prime, I'd keep prime.

Again, for this customer...

I'm moving soon and seriously considering not signing up for internet at my new address (new job, I'll be at work a ton, and the common area has free wifi I could use for the occasional email or weekend netflix download). But I won't cancel my prime subscription. That's what made me realize how sticky amazon is: I will pay 3 figures for access, even without instant access to the network that lets me get to them!

I think there are some services which people will pay for. People have been paying to be entertained for decades with pay TV models.

Do you think the users are not already paying for it? If you click on an ad and buy the product, you’re paying for that impression as well as 100s of others that resulted in a small annoyance instead of a conversion.

> If you click on an ad and buy the product, you’re paying for that impression as well as 100s of others that resulted in a small annoyance instead of a conversion.

Free shipping isn't really free, the cost of a product can include multiple different factors.

As far as the annoyance point, I guess that is somewhat balanced out by the importance of the site.

But that isn't the point I was making, the point I am making is that advertising is genuine way for companies to make money from offering services. There isn't really any other valid alternatives to this over than user pays or giving it away.

Advertising isn't that profitable per-user basis anyway, you need a huge amount to break-even. I doubt the average user generates more than a few euros worth of advertising per month. Not to mention the indirect cost of advertising paid by the consumer as well.

I doubt the average user generates more than a few euros worth of advertising per month

We know exactly what the number is. Take Facebook’s revenue and divide it by their number of users.

Of course the average is as nonsensical as saying the average American has 2.5 kids.

Most users probably make facebook almost nothing, and then a smaller portion make them far more.

A subscription model at a few Euros a month might attract only those users with high spending power, and whose ads (presumably) generate much more than a few Euros a month.

Yeah, also let’s not forget that the whole idea of ads is to sell people crap they don’t need. Industries are built to turn the environment into disposable products that people would not miss at all if they wouldn’t know about them. There’s obviously the question what would people do if they would not work for companies that produce waste and their actual needs have been met but I don’t think the current way is the correct answer, and there’s a huge part of the world who’s needs (food, shelter, clothing, self-actualization) are not being met.

> Yeah, also let’s not forget that the whole idea of ads is to sell people crap they don’t need.

That doesn't have to be true. Done right, ads can be about making more people aware of a product, to reach people who genuinely benefit from it but would not otherwise have heard about it. That's the advertising future I'd like to see, even if it's not how things are right now.

If that were true all ads would simply be a bullet point list of features - branding would not exist, there would be no pretty models in the ad, etc etc etc

The argument that ads are about informing consumer just doesn’t stand up to reality. The whole concept is flawed.

You were probably downvoted for taking the position that you are the judge of what other people need, but besides that error, I think you bring up an interesting point.

It is an uncomfortable truth that we have yet to really contemplate as a society.

Consumerism ISN'T sustainable, and society will grow to a point where we are going to see seemingly fundamental systems start to crumble beneath the sheer weight of consumption.

We have to be willing to ask "should we?" in addition to "can we?"

Who is “we”? You and I might decide it was the right thing to do but you and I are probably also in the top X% of the world in terms of wage.

Here’s my hunch on what would happen: we would realize that it’s really messed up that the only options for people to get basic services we once took for granted is to pay for it; and those that can’t afford it must give up their privacy or start rationing a budget to access news, email etc. for a fee.

On Maslows hierarchy, privacy in the sense of ad targeting is a pretty privileged need. The business model works for the overwhelming majority of the world; it’s only broken for people who think it’s no big deal to have to shell a few bucks extra a month for either more privacy or access to services (that would no longer exist for free to the extent they do today.)

Well Google certainly would not do that with Chrome. Firefox, Safari and Edge however could explore such ideas putting pressure on Google. It could be an option during setup, like disable tracking and known advertisers. That certainly would make a difference, bunch of things would break but alternatives would pop up quickly I'd assume

> Firefox, Safari and Edge

Given how much Microsoft has been pushing ads in W10, we're not going to see this push coming from Microsoft anytime soon.

MS play this game because they have to. If they had the option to cut Google off cold they would take it in a heartbeat.

My expectation would be, even if you paid for an ad-free Facebook, that they’d still collect and monetize your data.

Yep, there seems to be a great deal of magical thinking revolving around the idea of if you pay companies they wont keep on exploiting your data.

You still get ads on very expensive cable TV packages.

Your bank still data mines and sells off your purchase history, dispite a large monthly fee.

Do the user agreements in the two examples cited have any provisions that prohibit collecting data that will be exploited for advertising or marketing purposes?

What if the social network user agreement contained "privacy" provisions prohibiting collecting data if the user pays a fee but no such "privacy" provisions if the user pays nothing.

To do what? Facebook uses user data to, run Facebook, do research (train machine learning which uses de personalized data), and show ads. If they aren’t showing ads what other things are you expecting them to do that you find problematic.

  To do what?

In case you ever stopped paying; and because stopping displaying ads _and_ stopping tracking was more work than just stopping display.

To get more money??

They could just sell your profile to advertisers so you could get targeted ads on non-Facebook sites.

> currently Facebook offers no option for users to pay not to receive any ads at all. The still unasked question is, "Why not?"

Because it's not the showing of ads that's the real problem, it's the harvesting of demographic/interest/PII from the graph that's the problem. So they "can't" offer a way to opt out of that because for the part of your network that doesn't opt out, advertisers would have much less good data (ergo FB's value prop to advertisers is much less good) since it wouldn't have the data from the graph to augment the user's own data.

I think the argument is that more affluent users would be more likely to opt-out, leaving behind less affluent, and therefore less-valuable users, making advertisers desire less and less to advertise at all.

Facebook would be faced with trying to get as much revenue out of the 5% of their users who pay as out of the currently-100% of users who don't, and that would be a very hard thing to do.

i m kind of surprised that they have not asked these questions to google. Also:

- Making ads relevant means less ads overall for the user

- It would cost $20 / year and no studies show that users would pay anywhere near that. It reasonable to assume its impractical

- Subscription-premium services rely on a small number of fans to pony up (usually significantly) for the rest of users. afaik facebook does not have such a mass of hardcore, passionate fans.

- More generally there is no evidence that subscription users are happier.

But even with the current less targeted option Facebook offers, or say your option of paying:

Would other Facebook apps still have as wide an array of data on users that we've seen? And if apps can see it then Facebook itself is still gathering it... even if ads aren't targeted.

I had a sudden moment of clarity:

What's the point of advertising to people who can't afford to pay a few bucks for a social networking site? If they're broke they aren't going to buy anything anyway.

I think this whole train of thought is a logical fallacy. You need people who have more money than sense to believe that not paying is a better option than paying. It's a con.

"can't afford" is not equivilent to "won't pay"

"can't afford" is equivalent to "won't pay".

this totally nullifies the purpose of a advertising based business model.

TV channels i pay for them and still they show advertisement.

i can afford and i pay for them and am ok with negligible nonsense here and there, and am only going to switch to other channels when an advertisement seems to begin.

i am sure 70% ppl are capable of going and finding wat they want. and the rest of them wont buy stuff any ways just because they saw an ad.

May b this whole advertisement caters to those 2 or 3 percent of entire population who are cat on the wall.

You distribute the advertising cost & display across a very large number of users (varying on if we're talking about CPM or CPC), some of which can afford to buy things. Some users can afford to buy things at one point in time but not another, or vice versa. The users that do click and buy, subsidize the 3/4 of users that either could never afford to pay $5 or $10 per month for Facebook (a billion people or more), or would never want to (ie are perfectly fine with advertising). You advertise to a larger group than perfectly ideal (including guaranteed non-buyers) precisely because you don't know every person's exact financial condition and never will.

The minority of people on Facebook that click on ads and buy things, are making it possible for the other 2 billion people to use the service without paying a monthly fee.

This distribution is identical to advertising pretty much everywhere else throughout history.

Everyone that drives by a billboard can't afford to buy what the billboard is selling. That doesn't make it a con. The buyers you do derive, out of the very large number of people that have no interest or can't afford what you're selling, pay for your billboard (hopefully).

Everyone that watches an ad on TV - the past half century - can't afford to buy the thing being sold (a $1,000 workout machine), that doesn't mean the advertising is a con.

The sole difference is the heightened targeting based on information that Facebook or Google know about your habits or interests. In the past, it was far more difficult. A TV advertiser for example, might discover through research and trial & error that TV watchers are more likely to buy that $1,000 workout machine at 1am via an hour long infomercial. The experimentation loop was dramatically slower.

Right.

There's also a very very "fat head" in front of the long tail of what customers pay FB et al for their ads.

https://www.wordstream.com/articles/most-expensive-keywords

Suggests the 10 most expensive categories to advertise in are dominated by insurance, financial, and legal services.

I suspect when that curve is overlaid with the similar long tail curve of the disposable income of FB's 2 billion users - I suspect it'd be obvious that the vast majority of FBs income comes from super expensive PPC ads shown to people with a (globally) super high disposable income.

If you let the bay area tech crowd who're struggling to find a place to rent on their own because they're "only" making $160k all opt out of getting profiles and shown advertising for $25 or $50 per month, you'd probably make a existential dent in FB's profitability - much more so than if they just turned advertising off altogether for the lowest earning billion and a half people on their platform.

"What's the point of advertising to people who can't afford to pay a few bucks for a social networking site?"

It depends on what is being "advertised". To give one example, it might be an "issue ad", not for a commercial product/service. The "ad" can be thought of as a general form of persuasion to adopt some mode of thinking and consequently some specific action or inaction.

According to the whistleblower testimony, these were the type of ads being shown in certain third world countries by the companies who utilised the Facebook user data.

aka "Buying a presidency"...

The first part of your point makes sense, the second less so. If you have a pay for no ads model, you would get wealthy users willing to pay for it, and poor users unwilling. Meaning you could ONLY advertise to people without money to buy your products. This is a less than ideal scenario for an advertiser.

Payday lenders, cash for gold, rent to own and many, many other businesses would disagree. Poverty is quite profitable to exploit because your customers often have no choice.

If a significant portion of the FB userbase opt-in to not get any ads, then that makes the number of persons that an ad can target smaller, meaning ads would have less ROI for advertizers, driving the ads price down. So, in fact, the more users opt-in to not get any ads, the more the subscription would have to cost.

I suspect the incentives are all wrong for that to work.

The people most able and likely to pay for Facebook are _exactly_ the people Facebooks advertising customers want most access to.