It may not do that in the long term. Total spend for online advertising is probably a relatively stable figure.
In the short term it will likely have, at least from where I stand, a net positive effect. Now that industrial-grade stalking is finally illegal, companies whose sole business model was based on it will suffer. Possibly collapse. Well boohoo, cry me a river.
If and when large enough portion of the target market may no longer be stalked, the advertisers will have to come up with new (or rediscover old), non-intrusive ways to target their audience. The value of intent- and context-based audience segmentation might just go up again.
But how do you know which ads, and on which sites, ended up working the best? How about generating per-impression [bonus] codes? You don't need to stalk your potential customers if they willingly submit opaque and non-trackable information that allows you to trace the ad campaigns. GDPR does allow incentivisation, after all.
It’ll work itself out in the end, some think it will increase overall quality by forcing lower quality news publishers out of the market.
I can't find the link where I read this, but targeted ads tend to be detrimental for high-quality publications. Targeted ad peddlers are mercenary. If they want to target a high-quality site's audience, they'll run just enough ads to profile them, then target that audience on cheaper, lower-quality sites which that they also frequent.
tl;dr: Targeted ads and tracking mean advertisers have the technology to shaft high-quality sites in favor of cheaper, lower quality ones.
This is by far the most likely result. Why run an ecommerce store when you can rely on Amazon or eBay to shoulder the costs and risk?
GDPR will cause further consolidation, and ironically the companies people are forced to use will have everyone opt-out of the GDPR law by spamming them constantly with "opt-in" links until they click the "stop spamming me" button and the situation is exactly the same as it was yesterday, but with less competition.
Unintended consequences indeed.
Hm? I don't see this happening. Under GDPR you have to offer the same service 'without detriment' if the user does not want personalized ads. Most people would pick this option as long as it is clear to do so. I don't think reputation makes much of a difference. As far as I can tell, they could become paid subscriptions more likely.
The high quality news will be gladly paid for, while there will be far less clickbait sites as the ads revenues will drop. We will have less garbage on the internet and this is actually great, on the other side, the real journalism (not news like how to enlarge your penis) will hopefully come back into spotlite.
Quality small to medium publishers are the ones who will get squeezed hard.
It would be pretty shocking if suddenly EU users started happily paying for journalism. It’s going to be an exciting petri dish.
Ironically, the most effective micro-payment or subscription-based system will probably come from Google or Facebook in the end.
It's simple math. The ad industry has gotten so large because complex ad targeting tools made it possible to deploy ad campaigns profitably. With those tools extremely watered down due to GDPR, most ads that were profitable on May 24th are not profitable today. Most companies will not sustain these losses for long, and will simply shift their ad spend to other markets where they can still make a profit.
Some brand advertisers might stick around in the EU market - Coke, Pepsi, maybe Apple, etc. But with most everyone else out of the picture, the market will shrink. It will likely never again be the size that it was on May 24th.
That's totally fine, and nothing of tangible value will be lost to society.
Some valuable innovations have happened thanks to $$ being fueled into the tech sector via adtech and privacy invasion, and those will suffer, but that's a trade me and many others are happy to make. The "value add" of privacy invasion is purely an arms race.
I don't think anyone really knows this for sure. Of course, Ad Tech companies will come up with some type of "metrics" to show how profitable their particular targeted ads are compared to everyone else. But I think much of the recent technical advances in ad tech are driven more from an arms race mentality - i.e. as an advertiser I feel pressured into using the latest ad targeting tech, not because it is more effective, but because my competitors are using it and I don't want to be left behind (kind of like the VC FOMO herd mentality).
Edit: Perhaps you meant profitable for the Ad Tech companies themselves and not the actual product companies purchasing the ads. In this case, I believe your statement is valid (again, not because of the effectiveness of the tech but because of FOMO).
It allowed millions of web sites to fund themselves and publish content for free, which enabled millions of other people, many of whom don't have a lot of money to pay for content, to access it. Many of those people would never respond to the ads, so in effect, they were subsidized by those who would respond to the ads.
I grew up poor myself in Baltimore city, I could never had afforded to pay for any online content. My parents couldn't even afford cable. We watched broadcast television only. I got all my books from public libraries or used book stores. If most of the services that exist today were behind paywalls and I were still poor, that content would be off limits to me.
On the flip side, advertising used to be incredibly wasteful for small businesses. If you're a local dress shop, bakery, or piano teacher, it was much harder for you to "target" people who were highly likely to use your services. Instead, you had to place much more generic ads in many different channels like signage, local newspaper classifieds, the yellow book, circulars, direct mail, and so on.
The more precise web based advertising is a revolution for smaller businesses to limit their costs, track campaigns, iterate and test what works, and reach customers cheaper and faster. Is your local bakery saving money and bringing in more local business, evil?
Way too much of the rhetoric on HN lately IS literally drinking the cool aid. It's people taking theoretical damage scenarios and way over-inflating them into actual harm. It's worse than the anti-vaxxers who inflate minute risks, or the anti-GMO crowd, who bridge a sledgehammer when a scalpel is needed.
The downside of making ad spending less efficient, or erecting pay walls, is going to be greater centralization of the web. Because if you need to do untargeted advertising, than the greatest efficiency comes from reaching the most number of eyeballs. If you need to get paywall subscribers, most small brands won't be able to convince people to pay $10/mo for subscribers, so this will force small publishers into the arms of large consolidators who sell subscriptions, and then dole out pennies, just like the record industry did to musicians.
So those wishing for the destruction of the ad supported web as it exists today are really, in effect, creating the unintended consequence of even bigger publishing oligarchies tomorrow, while the little guy is squeezed out by lower margins and higher costs. These regulations aren't really going to punish Google, Facebook, or the other large players very much. They'll survive. It's the mid-sized and smaller companies who will face the greater challenges.
I don't have a precise answer for that question. I would love to read a good analysis.
>It allowed millions of web sites to fund themselves
Not sure about that number.
> which enabled millions of other people, many of whom don't have a lot of money to pay for content, to access it. Many of those people would never respond to the ads, so in effect, they were subsidized by those who would respond to the ads.
Yes, and it also allowed centralized ad agencies (google, fb, twitter...) to gather and mine their data, to behave irresponsibly and give us the Age of Anger fueled by social and video sites extracting value from human interaction while disregarding the huge social costs of all this.
All the heat comes from those who want to push instead of provide. It is so obviously wrong.
Your comment accuses people who are opposed to surveillance capitalism of being "hyperbolic" "anti-vaxxers" talking about "theoretical damage" but the only scenarios you provide to argue your case come from your imagination.
"Think of the small businesses!" is not an argument for surveillance capitalism. I have worked in adtech on and off for about a decade. The first adtech company I worked for specialized in software for agencies/directories advertising on behalf of small business.
In fact most small business owners do not have the knowledge and time to effectively market using online advertising. It is very easy to spend all of a small online advertising budget without getting any results. The bigger players have much greater advantages and leverage over small businesses in Internet advertising than they did pre-Internet. In fact this enables the very centralization you hypothesize: the small business discovery space is captured by Yelp, Google's business listings, Facebook pages, etc., in a way that the Yellow Pages never matched. There is no way for a small business today to effectively compete in digital marketing with franchises and national chains.
The statistics support my experience: there are now less small businesses around than at any time since the 1970s: http://money.cnn.com/2016/09/08/news/economy/us-startups-nea...
Of the small businesses I see having success with Internet advertising today, they are also organized differently. Instead of being a traditional small business than happens to do X, they are run like Internet marketing firms that happen to market X. This is more like the TV infomercial business model.
A client of mine leases offices from WeWork. All the offices have glass walls, so you can really see everything about a business. Just from walking around the halls, I see a number of small apparel startups (no production equipment for making samples, no patterns hanging around, no supplies - just some computers for doing marketing), a home improvement gadget than 15 years ago would have been "As Seen on TV" (no actual tools around though - again, only computers for doing marketing), and a couple of fad diet meal substitute companies (I don't see them preparing their gloop in the communal kitchen...).
Literally the exact opposite of what you describe is the reality. Surveillance capitalism is driving a decline of small businesses and centralization into oligopolies.
> I got all my books from public libraries or used book stores. If most of the services that exist today were behind paywalls and I were still poor, that content would be off limits to me.
It really does not surprise me that you missed the point here too. Your first sentence contradicts your second. In fact, books from independent publishers and periodicals are available from public libraries. Public libraries also have subscriptions to digital journals and information databases. Publishing worked fine (in fact, in many ways better) before the surveillance capitalism oligopoly, and it will survive and thrive once the surveillance capitalism oligopoly is dismantled.
And in what concrete scenarios in Europe, has someone's data at say, Google, Facebook, or Amazon actually harmed them? Is it more or less than the people who had a bad reaction to a vaccination? (~1 in 1 million)
> In fact most small business owners do not have the knowledge and time to effectively market using online advertising.
True, the holy grail would be pay for customer acquisition, only pay for ads that work and convert. Which would allow businesses on the margin to precisely estimate their CA costs, and whether the LV justifies it. That is only possible with some kind of end-to-end information, from click to purchase.
>A client of mine leases offices from WeWork. All the offices have glass walls, so you can really see everything about a business.
(Small irony that you're opposite to surveillance capitalism, but as a capitalist, you used access to your client's workspace to gather intel on others :) )
When I say small business, I'm not talking about people trying to ship products, like your WeWork example, I'm talking brick-and-mortar, your local Italian eatery, or French bakery.
> Publishing worked fine (in fact, in many ways better) before the surveillance capitalism oligopoly, and it will survive and thrive once the surveillance capitalism oligopoly is dismantled.
Demonstrably false. The amount of free information I have access to at the touch of a button is exponentially greater than it was when I was growing up in the 70s and 80s. A library in the 80s didn't have "digital subscriptions", they had "subscriptions" to actual paper magazines. And libraries in poor neighborhoods don't exactly operate like a library in Manhattan or Palo Alto.
It's easy to sweep away things as working "fine" if you don't have the experience of only having a public library that stocks few books, doesn't have "digital databases", and to access more information, you have to take a bus far away.
Billions of people now have access to almost the sum total of human knowledge in an instant, except the truly evil people who keep publicly funded scientific papers behind expensive paywalls. This didn't work "fine" 30 years ago, raising the barrier to information to a level that only the truly dedicated would put in the effort to get it.
People who were born after the creation of the internet and of less modest economic means I think have a different perspective of just how hard it used to be to obtain information, especially on demand. I taught myself programming from a ripped up book on 6502 assembly programming, and a VIC-20 register map. That was all I could obtain, and even finding where to find a library that had other books I might want was an epic quest for a child, something thanksfully, today's kids don't have to worry about.
But you have to ask yourself how we got from zero in the 1980s, to trillions of web pages today. Someone directly paid for that out of pocket, and it wasn't me, and it wasn't publicly funded.
_That_ is the positive social externality I was talking about in my original post. It's easy to lose sight of the bonanza of riches you have today that was invisibly funded and not understand how it was funded, nor what model can replace it. It's all too easy for people to bring out the pitchforks and torches over theoretical harm and completely ignoring the concrete benefits since they aren't paying for it.