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Comment by autokad | Hacker News Reader

from the article: “The fact that Google and Facebook were able to generate such enormous profits and growth does give hope to some companies,”

IF the bubble bursts, companies that seemed profitable might not remain so. companies like Facebook have made a fortune in advertising on things such as mobile (80% of its revenue), which to my knowledge really doesn't work. likewise a lot of desktop adds don't work, but many of these cash burning entities spend a lot on adds. so that revenue will disappear, then other people who want to sell adds can negotiate better prices or simply choose not to do so.

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I am curious, why do you believe that ads do not work? Why would large entities continue spending on them otherwise?

I ask because I operate a few businesses that have ROI > 1 on FB ads. I assume larger corporations, especially those like Amazon, Newegg, Fashion Nova, etc would be profiting off of them too.

I have talked to CEO's of ad companies. They use to try and prove how much ROI their adds where. What they found was their large clients didnt want to know. An exec at a large firm would be given a huge add spend budget, and they got that no matter what. Getting numbers that their add spend didnt work would = budget cuts, but a fancy power point presentation with an arrow pointing up so long as sales are good doesnt get questioned.

What did the add companies have to say about mobile? most of the time, if something gets clicked, its because they were intoxicated and accidentally did so.

I agree, many companies do not care. I know a guy who does online advertising for a Middle Eastern airline. Many of his campaigns do not work out, he's blown large budgets due to simple mistakes and no one cares, and he's given a budget that he just _has_ to spend. However, campaigns do work; many of the viral content you see has been carefully engineered and propogated by clever ad agencies.

I have to disagree on your opinion about mobiles. Mobile e-commerce is very intuitive and fast for many users (see Kim Kardashian). Consuming and sharing of media on mobile has led to clickbait and some brands have earned big money from that (see Buzzfeed). People scroll through mobiles addictively, and the invention of the "feed" by Zuckerburg combined with targeted advertising has users doing exactly what ad companies have want them to do, whether it be sharing, consuming, or purchasing.

Next time you use some ad supported app, take notice on the share of the ads are are for some other ad supported company.

That is the share of the market that will vanish in a bubble pop. On my experience, it's something around 90%, but YMMV.

That's a bit like the dot com thing, where companies spent a lot on banner ads, to get people to come to their site that made money off of banner ads. I'm exaggerating of course. But it is good to think about which VC funded companies may depend on other VC funded companies for clients.

What makes you say mobile advertising doesn’t work? Google makes a larger and larger portion of their revenue and profit from mobile as well. I’d assume the same is true or going to be true for distant third place player Verizon/Oath.

Advertising has stuck around on TVs and all sorts of formats that can’t be tracked at all for this long, online or mobile advertising not being at the pinnacle of efficacy doesn’t mean it doesn’t work.

Your knowledge is wrong.

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