How TikTok Broke the Ad Business
economist.com
economist.com
A lot of the perceived gap between short-form video and other social media's profitability can likely just be explained by TikTok's relatively nascent ad platform -- you could substitute TikTok with Twitter and make the case that it's text-based social apps that are worse ad businesses. My guess is it's more about the ad infrastructure itself than the experience you're bolting it on to.
But it's also interesting to think that TikTok made a product that's too good at retaining users' attention, such that they can't be tantalized by an ad to interrupt their addiction.
Refining engagement maximization, to maximize ad slots, with a little consideration of user satisfaction.
Is this actually true, though?
Aside from reels on IG, I’m struggling to think of anything that Meta has successfully launched to broad consumer adoption in the last few years.
And I know you specified launches in the last couple years, but just doing some back of the envelope math, some 60 percent of the world population where Meta isn't banned are MAUs across their family of apps -- hard to argue against their broad consumer adoption generally.
Given what’s happened to the Facebook user base in the past ~five years, it feels like Instagram and WhatsApp are still thriving despite Meta’s strategy, not because of it.
Also known as stage one of the enshittification process:
> first, [platforms] are good to their users; then they abuse their users to make things better for their business customers; finally, they abuse those business customers to claw back all the value for themselves.
I think it will take a few years for the data to come through and for ad agencies to fully wise up, but I'm convinced that short-form video is THE fertile ground for advertisers at the moment. There's an entire generation of consumers who never watch broadcast TV, never buy magazines, and don't spend much time browsing the regular web. Short form video ads are in many way the ONLY way to reach them, and based off the amount of stuff I see my teenage cousins order, I think it's working as designed.
It didn't make a lot of sense. It was a weak argument. Until I got to this part:
In other words, even if the TikTok issue seems largely symbolic right now, the app’s dominance of American media gives China’s government a considerable amount of option value in the event of a crisis. TikTok could become really important, really fast.
In other words, it could be bad at some future time. But the US is overwhelmingly supportive of Ukraine (and there is a lot of pro-Ukraine content on TikTok) and Taiwan. Americans broadly understand these are democracies under threat and deserve support. TikTok is not in a position to change those perceptions.
Because they can’t control it like they can control Google, Microsoft etc. inserting whatever back doors they want. Video outlines it well.
Twitter was and is still very, very popularly used to get immediate news in the event of domestic and international emergencies and it still is at this point considering it is used as a platform which agencies can use to convey information quickly and have it retweeted.
Anyone who has been on Twitter recognizes this. You can still find first-person POV from users in some really interesting situations that would otherwise not be shown on mass-media networks due to regulatory controls on what can and can't be shown.
Does that validate the use-case in Twitter being banned? Let's say the new owner doesn't want to show reporting from what is happening in Eastern Europe - does that further solidify an argument that it should be banned because it has been 'weaponized'?
The author at no point references Twitter in their article and just continues on a narrow lens on the subject matter.
What is the value in banning an app in a shroud of hypotheticals?
> Toward the end of the 45–minute experiment, analysts’ feeds were almost exclusively populated with both accurate and false content related to the war in Ukraine
A DoD funded company says that new accounts on TikTok were exposed to correct and incorrect information the Ukraine war. This is going to be true on any social media app in the entire world.
> For years, lawmakers and commentators have feared that the Chinese government could use TikTok — which is owned by a Chinese parent company, ByteDance — to secretly distribute content sympathetic to the Chinese Communist Party in order to shift public opinion in the United States.
Former employees of a separate app that shut down 3 years ago claim they were told to pin videos of pandas and tourism in China to the front page.
> TikTok can collect, which includes faceprints, voiceprints, browsing history, text messages, and pretty much anything you do on your phone
Again, not unique.
Do I like TikTok? No. But I don't think hypotheticals are enough reason to ban it. I think this is a very similar scenario to the 2016 Russian misinformation hysteria that was ultimately mostly unfounded.
Chinese spying on US isn't mitigated by US getting a chance to spy on Chinese.
The concern is that the market deals in materials too dangerous to be allowed to be run by foreign adversaries.
China has state capitalism, and "communist" is name only, and not relevant to the topic.
What we should be banning is behavior, not authorship. Does the application retrieve user data? What data? Is that retrieval bad and user hostile? Ban that behavior. Does the application do something else bad? Ban that behavior. Banning something simply because it's controlled by a government we don't like is a bad precedent. We should do the work to describe what specifically the application is doing that we don't like and address that, because it would also have the effect of applying consumer-friendly laws to all the others apps doing that as well with the goal of making ad revenue and not just collecting information for a hostile government.
And probably many, if not most traditional media outlets too.
Maybe a few hundred other ad and personal information sales supported applications.
There are very few good actors on the internet today, when you evaluate them based on the behaviors you mention.
If we care about preventing bad behaviors lets prevent bad behaviors . We would all benefit. The answer to bad behavior being pervasive is not to throw up your hands and just pick special cases to ban, it's to fix the behavior.
2. Many products are banned in china (google, twitter, facebook, whatsapp, github... etc). And CCP bans at will. Maybe a bit of retaliation is justified?
They aren't banned "at will" they were banned for violating Chinese law by refusing to remove illegal content. You can disagree with those laws, but calling it "at will" is disingenuous.
That's right Jack Ma lost the company because he broke the law, not because he dared to step out of the line with Ants Financial.
If you are a CCP shill, I don't care what you say; If you are not, do more research
A country should only allow foreign businesses in from countries that would allow that same business in from our country.
Pretending the CCP subsidized enterprise is a free market is just wrong.
I imagine they are still very eager to shift into that type of model since the format does present some real potential in generating conversions. If you've done the ads where the user can 'swipe' into the e-commerce shop those seem to work really well for makeup brands from what I've seen.
Sources, if anyone is interested in checking out what I mean
[2] https://www.theguardian.com/technology/2022/oct/12/job-listi...
[3] https://www.axios.com/2022/10/11/tiktok-chases-amazon-fulfil...
Unlike YouTube, TikTok is not profitable. It is no surprise they show fewer ads when they are generating no profits. There is no "breaking the revenue model of incumbents" when you are not profitable. Perhaps when they try to be profitable, they will be more like... YouTube.
That essentially becomes their demonetization strategy, if you say things tiktok/ad sellers don't like, you stop being recommended. Youtube on the other hand at least separates their monetization from their recommendation system.
The model of feeds adopted by YouTube and Instagram has a lot of first mover advantages which makes succeeding as a newcomer really hard. It's really hard to find successful creators in the past few years that hit success without recurring to paid promotion or sponsorship from other more successful creators.
In return they give up access to user data, allow deplatforming and shadowbanning whoever they are asked to by people in the government.
"American Free Speech" is ensured.
Repeating the same lies doesn't magically turn it into a truth.
The difference between google and tiktok is that tiktok follows all the laws and yet still is getting banned.
Which Chinese law didn't Google follow? Failure to implement the never public admitted content censorship?
Did Chinese government ever acknowledge it's internet censorship?
While banning TikTok is not fair to me, saying Google isn't banned in China is lying.
As for the law didn't Google follow, disregarding they pulled out due to moral considerations over Operation Aurora, they got hammered along with twitter and facebook post 2009 minority riots for not adequately censoring/filtering calls for violence that at the time required expensive moderation teams which every PRC platform had invested in to stay compliant. Western platforms not following obeying was as much a moral stance as economic - competitive advantage of not sinking shitton of expensive human resources. That wasn't going to fly.
Wasn't until social media driven violence in west i.e. NZ shooting that western platforms were presured to form comparable levels of moderation - incidentally alsoaround time when FB and Google started initiatives to reenter PRC market. After they build tools to minimize violence in west. If you need a specific law, it's covered under art5 of Computer Information Network and Internet Security Protection and Management Regulations from 97 that disallows inciting terrorism, hatred etc. 101 stuff that that any prescient state would enforce. And it took multiple mass casualty evens for PRC to finally and firmly put foot down on western platforms. Like response was to actual instead of hypothetical (but justified) risk.
Generously western platforms are blocked in PRC but not banned. Or that US efforts to ban tiktok exceeds what even PRC gov would do - force sale - vs setting up very restrictive JV like Oracle proposal. At end of day US free to ban tiktok for whatever reason, but for a freespeech advocate, it will be using methods more draconian than even CCP.
Yes?
https://en.wikipedia.org/wiki/Great_Firewall
> While banning TikTok is not fair to me, saying Google isn't banned in China is lying.
No. You are lying or you are dense. Google operated in china til 2010 or so. It tried to foment a color revolution in china like google did throughout north africa, middle east, ukraine, etc. So china instituted more stringent laws to reign in google. Google chose to leave china because the laws would prevent them from spying and destabilizing china.
So you could call it "banned" if you like, but it isn't "banning" in the same sense as tiktok being banned.
For all I know you're entirely right in all your views, but still you can't abuse other users like this, you can't post egregious flamewar and so on, and you can't use HN primarily for political/national/ideological battle, regardless of what you're for or against.
When a govt imposes trade tarriffs, it's effectively taxing it's own citizens to disincentivize them from purchasing those goods, steering towards others.
When a govt imposes bans, it's preventing it's own citizens from using a service. Yes there's an economic angle to the supplier of the service, but this isn't a financial transaction where a person would vote with their wallet to use the cheaper alternative. This is the attention economy, people want to use the platforms they enjoy using, because they're all free anyway.
The Econ 101 way to look at it. In the real world, it also promotes domestic production, creating jobs and often helping "nascent industries", and in many cases ultimately leading to even lower prices over the long term as domestic industry matures. This is how basically every advanced economy industrialized. See the work of South Korean economist, Ha-Joon Chang.
https://www.goodreads.com/book/show/1032019.Bad_Samaritans
>people want to use the platforms they enjoy using, because they're all free anyway
Agree with the first part, but one's attention is hardly "free". It is, in fact, the ultimate opportunity cost when squandered on these services.
Is it? Maybe in the short term (and I'm not even convinced of that) but in the long term?
In the long term, I don't want the US to fund China. Period. You can pick your reasons from a smorgasboard: human rights abuses to basic reciprocal market fairness to government subsidization of companies. We tried engagement--it's time to admit it failed.
TikTok being banned should just be one of the things that occur. Manufacturing should get pulled from China. Anything shipped from the China to the US should have a tariff on it. etc.
The first best time to act should have been before we outsourced everything. The second best time to act is now.
Were you talking about the US here, or China?
So, answer your own question.
"Both sides are the same" is mentally equivalent to a 4 year old saying "But he did it, too!" and deserves the same consideration.
1. US has the world's highest incarceration rate, with minority populations extremely overrepresented.
2. The US subsidizes its agricultural products to an extreme degree, but forces poor countries like Mexico to drop subsidies that were integral to its food security and economy.
You were saying?