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Comment by samwillis | Hacker News Reader

Ignoring the ethics of the adverting for now and looking at the advertisers using Facebook, particularly the many small business that use the platform. This $10B hit in revenue is directly down to a reduction in ad spend, which directly hits revenues.

Assuming an estimated ROAS of about 6-10x then this equates to advertisers seeing a $60B to $100B reduction in sales via Facebook. Many of these advertises will not be moving this budget elsewhere, they will just be seeing reduced sales.

So, I'm all for criticism of online advertising ethics, particularly targeted at Facebook. But please remember they are an important part of the larger online economy which supports business that employ people. Please remember the people at the bottom of the chain here who have (and will continue to) seen a material impact on their business, income or employment due to these (and the inevitable further) changes.

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Regardless of whether it puts people or jobs at risk, I don't believe society should be paying this advertising tax (in the form of time wasted being interrupted by ads, consuming garbage misleading content that's only there to generate an ad impression such as chumboxes/Taboola/Outbrain, the privacy violations, etc) just so that a relative minority can have a job.

Otherwise, you could also argue that illegal things such as violence or theft also enable people to have "jobs" in countries where law enforcement doesn't or can't crack down on it.

You are not only paying by getting the ad itself, but also paying for you getting the ad when you buy products of companies who use ads

People are so quick to dismiss advertisements as "always bad", but they are part of a legitimate ecosystem that IS BENEFICIAL TO YOU.

Sales people, recruiters, advertisements, marketing departments - they all help me understand what is being sold so I can buy things that I GENUINELY want or need

It is true that there are garbage advertisements out there, and they should be pruned. But if YOU write really awesome code at work and you want people to use it, ask yourself, how do other people know they should use it?

You tell them. You talk, you email, you set up Confluence pages with documentation. All of this is a part of the advertising ecosystem - and it helps the creator AND the consumer

This statement is just a perfect illustration of how manipulation has been normalized in our everyday lives. Your attention constantly being undermined for the benefit of perpetual awareness of consumer goods is just how things should be apparently. I guess if you're in the business of writing "really awesome code" to force people's attention into spending money you have to believe in advertising as a civil right or something but society as a whole doesn't have to agree with you.

I personally believe the vast majority of advertisements are nothing more than mental pollution. While there is a place and time for promotion, I feel like there should be spaces specifically designed for advertisements. I have no problem whatsoever with businesses trying to get my attention when I specifically look for some relevant service. I’m not talking about peppering my search results with interstitial content, but rather, going to a website designed to find and purchase products or to find services/contractors for hire.

Spaces like ... search engines, where you go and search specifically for the business you want?

Are you arguing that only Google should be allowed to make money from advertising online?

That is not what he claimed at all, and you know that.

One does not go to google to get ads, one goes to google to get results, which ads subtract from.

GP was likely talking about a dedicated space, say ads or offers.com.

No, lots of people absolutely go to Google to get ads. How many people do you think are looking for Wikipedia when they search for something like "flowers" and it's February 14th?

This idea people seem to have here that nobody likes or ever needs/uses ads is just plain wrong. These businesses aren't the size they are because ads are useless noise.

Is it big deal to specify in your search what you want to do with the "flowers"?

Yes! Getting rid of the need to learn special syntaxes and awkward commands is a big part of why people use search so much. Again, I really cannot stress this enough. Nobody outside of the HN bubble thinks the way this works is a problem.

I welcome them when I am on the Shopping tab of a search engine. Not so much in general queries.

Lots of ads are for things that aren't appropriate for Shopping, e.g. most service businesses. So that wouldn't work. Universal search is a ship that sailed long ago my friend. People find it useful and Google has tons of metrics to back it up. It's not going away. Mixed mode search is just so much easier to use.

Society as a whole is employed by either the government, or companies that use advertising to generate cash and pay salaries; not sure which other system you are advocating.

It's interesting that employment is the only framing you're able to perceive this argument through.

Even so, a total loss of privacy isn't a given within advertising itself (it's a fairly new phenomenon).

Before advertising was as widespread and exploited as it is today, people build businesses around service, quality, worth of mouth and recommendations. That resulted in some truly great things, and it seems that with advertising we've lost a lot of that. Ultimately it's probably to do with people being cheap and advertisements just exploit that.

At least for me personally, it has come to the point where I don't believe advertisements anymore.

The reason we've lost that, fundamentally, seems to be the outsourcing and centralization of manufacturing.

A brand used to mean something.

Now, it's a sticker covering the "Made in X" label, to arbitrage the difference between customer goodwill and actual manufacturing costs.

It's pervasive throughout the grocery store and department stores, but to me McDonald's is the poster child. Ostensibly you're getting a "McDonald's meal", but what that fundamentally means is you're getting minimal-cost food, manufactured as centrally as possible, with a bare minimum of prep done in the store.

Drop shipping and popup social media brands are the ultimate realization of this. If a brand means nothing, why shouldn't I just fabricate one, leverage the same supply chain, and compete on advertising alone?

At what point has media not been supported by advertising in the last 100+ years?

How would I have heard about anything computer related in the 80s in the small town south about computer products?

Even today I would have never heard about Backblaze, Linode etc if it weren’t for podcast ads.

I wouldn’t hear about local concerts, events etc either.

Quite the opposite for me. As a child I grew up in a "small" town of 30-40.000 I think, I would go to the store to see what was new including computers, I would swing by the local cinema to see what was coming. I don't recall advertising was in paid newspapers either. I would know about books from the library. It was far less advertisement driven and all about reputation and recommendations from experts, professionals and store owners.

In the 80s when I grew up. The library had two books on AppleSoft Basic. I learned the intricacies of the //e from InCider and buying books and software based on sending in a card in the back of the magazine where you could circle the products you were interested in.

The store owners were far from “experts”. They were either minimum wage workers at Sears who were in school or sales people selling to businesses.

Seeing an ad for a product or service makes me less likely to buy/use it. Luckily for advertisers I block as much advertising as I can so I may still accidentally become their customer.

I don't think any of those roles you mention help me understand what is being sold. It's true they're bringing it to my attention but they'll also be lying about it to the maximum extent permitted by local laws.

Lots of software I use on a daily basis has no marketing team and became dominant on its merits alone. I would rather all software competed on its merits.

As for you main point about advertising helping me find products I genuinely want/need, this couldn't be further from the truth in my experience. Recently I wanted a new laptop, and one of my criteria was that said laptop should not have pre-installed nonsense like mcafee/Norton(I mean I would be wiping the drive and installing Linux anyway but this is on principle). Anyway it turns out that all large laptop companies install some kind bloatware and also advertise aggressively, so it's quite difficult to search for a laptop without bloatware, since all the ads/seo are for laptops by companies with large advertising budgets and therefore have bloatware. More generally if I'm looking for a product I want there are generally multiple competing providers/manufacturers of said product, and I therefore must figure out which is better, and often there is a clear winner. However the other sides advertising team are incentivized to muddy the waters in this situation making it less obvious which products are best.

Also can you please not yell random words it's actually kind of jarring to read.

> has no marketing team

"has no marketing team" is different than "has no marketing".

the stars on github are part of marketing.

good docs are part of marketing.

that tweet from a 3rd party is marketing.

if a project isn't exposed anywhere and has no website (i.e. is completely private), then yes, it has no marketing. everything else has degrees of marketing baked in.

Sorry to respond to such an old thread.

Of course pretty much all communication is advertising in some way, but the topic here is the corporate kind with teams of people trying to optimize click through rates and the like. I don't think they are really comparable and I don't think its particularly difficult to tell the difference in most cases.

> they all help me understand what is being sold

Do they? SEO spam sites, review spam on Amazon and the like, review kickback schemes, buying off of "influencers" on Youtube/Instagram/etc: these all add noise when I'm trying to understand what is being sold. In fact, many companies benefit (or think they benefit) from keeping me in the dark about what is being sold and many marketing departments make a living helping them keep me in the dark.

While not all advertising is bad, most of it is. Like the ratio is more 95% bad - 5% good, not 50-50.

I might be on board if this infrastructure was mostly used by local businesses. However that has not been my experience. Most advertisers are National brands and politicians. So we have this tool which could maybe used by local businesses but more often is used by National brands to push consumerism.

I would also like to flip the perspective a bit. It’s more important to allow people to have a private and consensual relationship with the internet than it is for small businesses to advertise their services.

If useful ads designed to genuinely inform consumers were the norm it'd be one thing, but I don't think that's the case. The norm is deception and manipulation.

The majority of advertising boils down to this fundamental assertion: your life isn't as good as it could be and the solution is to buy <product>. It's plainly manipulative, and the effect this mindset has on society is hard to understate. It fosters feelings of inadequacy and stokes the fire of consumerism that's destroying the environment.

In theory that is true.

In practice there is a direct correlation between adspend and sucky products and I don't use ads to find interesting things. I use tech tubers and reviewers for that.

> they all help me understand what is being sold so I can buy things that I GENUINELY want or need

Advertising literally undermines the understanding of what’s on offer, by trying to manipulate people into buying whatever was paid to be advertised, regardless of needs and wants.

This isn't something Apple "did" to Facebook. Apple let people opt out of tracking. People chose privacy. Facebook's business model is not compatible with privacy.

I haven't seen an informative ad in ages. So they being beneficial to me in this sense is basically entirely bollocks.

Please remember that any resistance to the loss of your privacy might lose people money. Let's not also forget to use basic manipulation and reference poor little small businesses in our example to make people sympathetic.

I guess if unethical behavior is used persistently enough, it'll be normalized and we can start talking about how important it is to keep doing it (and oh yeah the little guy, think about the little guy--especially over any general societal goals)

> Let's not also forget to use basic manipulation and reference poor little small businesses...

It's the corporate version of "think of the children". Often cited by big predators (from Amazon to Walmart, Exxon to Utilities) for cover.

> Let's not also forget to use basic manipulation and reference poor little small businesses in our example to make people sympathetic.

While I appreciate that these tactics are used by large business (including Facebook) to manipulate people. As the author of the comment you are replying to I'm speaking from experience as a small business owner. We have seen this impact directly and I can attest to it being true. So, yes it does impact small businesses and yes I am asking for people to sympathetic to them and their employees.

I think you're under-appreciating how unsympathetic and narcissistic this argument is. If you're suggesting that the original response didn't take into account that it would literally be you who would be losing money, please rest assured everyone made that assumption.

Being the smaller agent of a parasitical industry doesn't make you or your bid to continue the status quo sympathetic.

I'm not asking for the status quo to continue and didn't intend my comment to imply that. I purposely started my original comment suggesting I was ignoring the ethics in order to concentrating on the wider economic impact of changes such as that implemented by Apple. The other comment threads on this post are doing a good job of debating the ethics, I'm just trying to ensure people have in mind the wider impact when they debate these changes.

Personally I think the privacy invasive advertising is long overdue heavy regulation and I look forward to it both as a person and particularly as a parent. I fully support Apples change and hope the rest of the industry follow.

We have always tried to minimise our usage of privacy invasive advertising (we actually barely use Facebook narrow targeting tools and have avoided targeted remarking as I personally hate being chased around the internet by ads for something I have looked at), and will continue to do so.

Do you know what happens when small businesses go out of business? Large too-big-to-fail conglomerates step in with their cookie-cutter milquetoast experiences, paying workers minimum wage and centralizing wealth away from the communities in which they operate. And they most certainly deploy surveillance technologies to better herd their customer base.

Believe it or not, you can simultaneously care about commercial surveillance ("advertising") and the plight of small businesses despite those small businesses patronizing the surveillance economy. If you still can't bring yourself to care about two conflicting things, then ignore the last paragraph in OP's original comment and read the first two as a narrative indicating a temporary economic trend for Faceboot, rather than prematurely celebrating the surveillance industry's demise.

> you can simultaneously care about commercial surveillance ("advertising") and the plight of small businesses despite those small businesses also patronizing the surveillance economy

If you define caring as expressing passive concern in comment boards, I guess you can. If a small business depends on a surveillance infrastructure and removing the infrastructure negatively impacts the business, then you can't equally "care" about both at the same time--a choice must be made. Whether it's destroying energy jobs to lower carbon emissions or lowering the sales of an independent seller to diminish advertising reach, a choice must be made.

Society pays a greater price diminishing its civil liberties than compromising the sale of consumer goods.

> If you define caring as expressing passive concern in comment boards

No, caring describes one's personal thought process, which may then be reflected on comment boards and elsewhere. I can believe that oil extraction needs to be reduced to mitigate climate change, and even more fundamentally that the amount of work in general should decrease so the productivity gains of technology accrue to wider society, while still lamenting specific losses of jobs creating individual suffering as workers lose their existing purpose and become less able to support themselves. In fact I'd say the tendency to turn off such empathy in favor of simplistic one-sided narratives is the root of our political polarization.

> If a small business depends on a surveillance infrastructure and removing the infrastructure negatively impacts the business

The more plausible explanation is that small business revenue has gone down due to the pandemic (as widely covered), which has caused them to spend less on advertising (a straightforward way of budgeting is as a fixed percentage of profit/revenue), which has cut Faceboot's revenue. Faceboot is then blaming this downturn on increased privacy, hoping to garner some sympathy while distracting from a fundamental downturn in their market.

As I said, you're prematurely celebrating the surveillance industry's demise by buying into its own narrative. The advertising industry has a history of painting anything that might reduce their invasiveness as an existential threat, and yet the leeches are still here and drinking as much blood as ever.

He might be a restaurant owner who is trying to get the word out locally. He is not an agent of a parasitical industry. Folks in this forum have worked for banks, oil companies, tech suppliers to militaries and what not.

Trying to act morally superior to a small business owner trying to stay in the black because you dislike Facebook is absolutely ridiculous. If you dislike Facebook, just log out and delete your account.

If you can’t sell your product without FB type targeted advertising, perhaps your product just isn’t necessary for people.

You may be small, but you’re hoping to ride the coattails of giants by exploiting the same toxic systems they do. A symbiote who survives on a predator by eating its filth.

And what would your small little business be doing if FB didn't exist? If you can't exist without FB, then maybe, just maybe, your business plan is very flawed/short sited. Depending on someone else to exist for you to exist shouldn't be a valid business model. Having a business that is enhanced by a 3rd party is totally different. If that 3rd party suddenly isn't available, it's time to roll up those shirt sleeves and put on the big boy/girl pants to find a new something to replace.

If $100bn of spend is being caused by advertising rather than by need, then it sounds like a net benefit to society to prevent that spend.

Either people need the products and will carry on buying them, or they don’t, and they will spend their money on something else instead.

It is not only better for people but also for the environment.

In my past life, I bought a lot of gizmos thanks to random ads. Most of those gadgets end being used once or twice, and then go in donation pile or trash.

People can invest extra cash, retire early, donate. And I think those jobs that are lost due to less consumption will pave a way towards more meaningful work eventually.

Revenue for businesses comes from people. $100B in sales is not necessarily a good thing. I think there is a somewhat reasonable argument for a huge amount of advertising being harmful to consumers given the vast power imbalances and deep psychological weaknesses inherent to the human mind. How much stuff is purchased not because of a real need but because of a need that has been implanted via advertising?

On the other hand, consumers haven’t stopped spending. So that 60-100B that consumers might have spent on Facebook advertised businesses will probably end up elsewhere, like their local economy (or Amazon…probably Amazon)

So I would argue it’s just a shift. Similar to what has happened with the pandemic and restaurants. Consumer restaurant spend didn’t disappear, it got reallocated to electronics, vehicles, etc.

How do you know though. Maybe business are simply investing less money into Facebook because the ROAS isn’t 6-10x times anymore.

Maybe 100% or this is on Apple, but maybe it’s also because nobody under the age of 20 uses Meta platforms. I can only speak for my country of course, but if your target isn’t in the 40+ category then Facebook or Instagram advertisements rarely pay off in any sort of data we collect on it. In my line of work Facebook works, but it doesn’t work better than targeting banner adds on financial websites or financial news papers, and you still only start the onboarding journey with that, the real sale state waaaay later. 5 years ago the sale journey started on Facebook, and now it just doesn’t.

> Assuming an estimated ROAS of about 6-10x then this equates to advertisers seeing a $60B to $100B reduction in sales via Facebook.

That's a pretty big assumption. Do we have any data that backs that up?

It's just as easy to assume that there will be very little impact, because most people ignore Facebook ads, and that this is actually saving small businesses money.

They must be making a return on their investment, otherwise why would they do it? Maybe not 6-10x but it must be greater than 1x

> They must be making a return on their investment, otherwise why would they do it?

Because of Facebook's advertising that says they should.

Or independent contractors who will helpfully create an ad campaign that will "earn 6x their investment".

There's plenty of stories out there of folks who actually put in the effort to measure the income generated by FB and Google ads, and they aren't flattering.

Because everyone else is doing it and they feel like they need to do it. Also, statistics manipulation by said ad agencies. They do anything for conversion "attribution" metrics. Saw an ad 6 months ago and now you buy the product? That's tracked as a conversion by the ad company, telling the business how great their ads are doing. I'm convinced that a vast amount of sales attributed to online ads are sales that would have been made anyway.

A ROAS of 6-10 is apparently the average from what I have read, although I don't quite believe this.

Even if its actually closer to a ROAS of 2-3 (which is not unreasonable, 30-50% of sale price paying for advertising), that would still be $20B-$30B in reduced sales.

Ad spending just shifts to other channels or other forms of marketing / sales. It doesn't necessarily mean that the sales are going down. eCommerce is on a tear of growth worldwide.

ROAS of 6-10x would be unusually excellent.

Doesn't that boil down to the argument "oh but look at the jobs!".

Where I live, we have the same argument when it comes to the oil and gas industry, the military industry etc. etc.

> Please remember the people at the bottom of the chain here who have (and will continue to) seen a material impact on their business, income or employment due to these (and the inevitable further) changes.

We see this dynamic in so many industries and it's holding us back as a society. <Thing> is a net negative to society, but regulating/reducing/banning <thing> causes suffering for workers. If we want to advance as a society we'll need to be willing to support the people affected by changes like this.

I bet average ROAS is much closer to 1. So many companies have upside down unit economics and the ads never pay off. Even if you have good economics you would not want to see 10x ROAS as it means you’d be massively underspending in a profitable channel.

So I’m sure the shift is real, but probably lower than your estimate. I also assume Facebook will quickly figure a workaround through alternate IDs or fingerprinting in other ways.

>Ignoring the ethics of the adverting for now

Selectively ignore the worst part so we can feel guilty about improving it? for what purpose?

Which ad spend is being cut, though? Is it little shops like you describe or huge link farms with barely any return on ad spend? Or both? I’m not sure. Are you?

It's not clear to me that privacy-preserving ads do actually perform worse than intrusive ads. Maybe advertisers spend less for similar impact.

The most reasonable position is that for some purposes intrusive ads perform worse and for others significantly better.

In a sense ads can measure a few axes of a buyer, if your critical axes correlate well with that noisy signal then it will perform well.

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