Comment by ppsreejith | Hacker News Reader

Comment by ppsreejith | Hacker News Reader

Seeing many folks ITT questing the value of advertising (behavioural/contextual) so some points:

1. Advertising ideally works as match making by connecting buyers to sellers where the seller is unaware of the buyer. (i.e. the unknown unknown problem). Companies usually collect advertisements and place them on limited ad slots.

2. In earlier, physical, forms of advertising such as newspapers, TV, Retail Stores etc, the same ad used to be shown to everyone so ad slots were fewer, much more expensive, and typically only big businesses could afford them.

3. In Digital ads where ads can be personalised to users, there are now a lot more ad slots and small businesses could effectively reach out to niche buyers who otherwise wouldn't be aware of them. The ads are thus cheaper as their budget is better focused on the right users.

4. Digital ads are broadly of 2 types: Intent ads, where the user submits their intent (Eg: Google search, Amazon, Maps etc) or Discovery ads, where the user is typically not present for any single intent (Eg: Facebook, Twitter, Instagram, YouTube etc)

5. Discovery based ads in particular can help open up completely new behaviours (in an ideal world) where the seller wasn't aware of the buyer's product but found it very useful (i.e. The unknown unknown problem)

6. Both Intent and discovery ads can be harmful to the user. Intent ads basically charge a tax to prioritise their results (i.e. rent seeking: pay more to jump the queue). Discover ads degrade the user experience (i.e They could've shown you something more interesting but decided to show you something less interesting to you and received money for it from a 3rd party).

Some opinions below:

1. Making digital ads more like physical ads (Eg: By removing personalisation) will probably benefit big businesses by increasing ad prices and making it harder to match sellers to buyers. It's often small businesses who have a niche which increase competition in a market (The Innovators Dilemma)

2. In the EU's case, the ads can be personalised, just not based on behaviour but on context. So this will probably still increases prices but still not change digital ads fundamentally (i.e. they can still be personalised somewhat to the user) at least for now.

Note that you have an unshown assumption here.

That none of the participants lie and that you can infer niche effectively from the data. And that the ad can deliver the behaviour change

The ads are only cheaper if they actually find the niche people and change the behaviour. Otherwise you spent money for nothing.

The problem is that we have pretty good hunch from a bundle of clues that the data and org that validate these assumptions are lying.

We also have pretty good bundle of clues from the consumers that the ads are not hitting their niche pretty well.

So... We have an industry that breach privacy and lie, for a purported benefit based on seemingly false assumptions.

Maybe the results are not achieved.

1. Modern digital ads can be very well measured. At least the ones focused on direct conversion and not branding. Advertisers can measure the impact of their spending independently and the results can be seen fairly quickly. (Again, not brand advertising).

2. Advertisement match-making isn't perfect (which is why I wrote "in an ideal world"). There is some time and signal buffer till we get enough signal to show the right ad to the user (if ever). The intentions of the ad platform also have to be taken into consideration (Often not the case for Big Tech but even here).

3. Advertisements do have negative consequences. We can also target drugs, cults, gambling etc more effectively as well. Often the law has to play catch-up with the more controversial categories. Advertisers can also dupe/defraud buyers with false/misleading advertisements.

You've missed the main negative part: the attack on our attention and mindfulness.

I really hope that the results of neurologic research won't take much longer to put an end to this disgusting behavior, which attacks central parts of the consciousness of every victim.

(Source: https://en.wikipedia.org/wiki/Thomas_Metzinger)

> In earlier, physical, forms of advertising such as newspapers, TV, Retail Stores etc, the same ad used to be shown to everyone so ad slots were fewer, much more expensive, and typically only big businesses could afford them.

Well, my local newspaper shows ads for family businesses, and they don't pay that much for it. I've found my local newspaper quite interesting as well, diverse in political articles, with good cultural recommendations, and generally of higher (content) quality than the ones sold nation wide.

I think your point applies to those with most eyes on them, but... The same is true in the digital age. We often give too much credit to the content we partake in. I don't think much has changed on that regard, I just think it's much more obtrusive now.

It's about margins. We have a box of paperclips that costs 10 euro. 100 people sell it for prices ranging from 11 to 100 euro. 11 is probably to low to build a reliable business, 13 is within reason, 15 would allow for some advertisement budget. Everything below is out. Then we have a market with advertisement budgets ranging from 1 to 85 euro per box. These expensive boxes make a hell of a lot of noise! The customer is left choosing between the 80+ and the 60-70 euro screamers.

And then, then they go to AliExpress and buy it for 8 euro from someone who wants out and you've made us all look stupid.

And now a moment of silence for the thousands who failed to want paperclips regardless of systemic encouragement.

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