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Comment by eykanal | Hacker News Reader

Following the model from the article:

In the fee-based model, the needs of the following must be met: (1) the company, (2) the users.

In the ads-based model, the needs of the following must be met: (1) the company, (2) the advertisers, (3) the users.

By removing the advertisers from the equation, a lot of resources are freed up to address the needs of the other two parties. It's kind of strange to say that "the company" is a party being serviced in this manner... they're asking for cash, and people are giving it to them for a service. Yes, they have needs that require resources (think administrative assistants, HR, sales, etc), but these people all exist to help service the user. To that extent, the majority of the company is now existing to create a better experience for the user. Their argument is that this is significantly superior to the model where a significant portion of the company exists to service advertisers, and not benefit the end user.

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You're assuming that advertisers never meet users needs.

If I'm selling you a bike, and I also tell you about a good deal on bike insurance you can get, then I'm advertising at you. Maybe I get a cut of the insurance premium. BUT, I'm also adding value for the customer. It's a mutually beneficial transaction.

I know it's blasphemy to claim that advertising is sometimes pretty damn useful around these parts, but the fact is, it is useful for users just as much as it's useful for companies in search of revenue.

edit: Has no one here ever clicked on a sponsored result in google? If not, bear in mind you're the exception rather than the rule.

The comment wasn't assuming that they _never_ overlap, it was assuming that they don't _always_ overlap.

Change that to "internet advertisers", and that is exactly my assumption. Personally, I think that is a fine assumption to make. I have never seen an advertisement add value to a internet-based conversation I was having or article I was reading on the net.

So when amazon suggests that you might want to buy a certain bike helmet based on the fact you're buying a bike, you find that information utterly useless?

I do find it utterly useless.

If I'm buying a bike then I either already have a helmet, or already know I need to buy one. So what value is the ad providing?

I'm not going to blindly purchase something without doing at least a little research (to check prices, at the very least), so the ad is just getting in the way and wasting bandwidth.

So how do you find out about anything? Even in the Bike shop, they have product displays to show off products-- that is advertising. The funny thing is you are likely subconsciously exposed to products that you eventually buy all while thinking that you 'discovered' the product on some hipster blog while pretending that you're impervious. You wouldn't know about any new movie unless they were advertised. Unless you read reviews which, are seeded by the film's PR department which is, in effect advertising. Don't be so sanctimonious. You cannot honestly say you never tried a new restaurant unless expressly recommended by a friend. Those signs in front of restaurants.. You guessed it, advertising. You're a consumer whether you admit it or not.

In that case, congratulations! You are the perfectly-informed consumer, aware of every relevant product category (and product). You use the Internet for price checking only. You don't need to be made aware of a new product in any category, because you are on all industry listservs. You are the only one of your kind.

Every other homo sapiens sapiens finds it difficult to stay abreast of all the submarkets he/she participates in. They spend their mental energies on other things, or simply don't care to research products costing under some threshold.

For example, I consider myself very savvy at computer purchases. However, I really can use guidance in purchasing power tools as I'm not a frequent user. In fact, I really wouldn't be surprised to learn that of the existence of entire categories of power tools. Just because I'm not seeking them out doesn't mean I couldn't use them around the house. Oh, and I don't really want to spend a lot of time researching them because I actually do have better things to do. Also, I freely admit that I have never researched tape; the benefits of one vs. the other are a topic of which I am wholly ignorant at the moment. (Obviously you are not possessed of such an ignorance.)

For the homo sapiens sapiens other than you, sometimes a little nudge is actually mutually beneficial. An ad might make us aware of a product category, or an upgrade to an existing category that makes it more useful to us. All of these might make us do more research, or simply go buy something.

Yes.

The one area where I see advertisements providing value to those viewing them is in search and search-like contexts. In user testing, one of my colleagues was having a guy go Google searches for particular products. The guy said, "I'll tell you a secret. I ignore the stuff on the left. The really good stuff is in blue on the right."

But everywhere else, the purpose of the ads is to distract you from whatever you're trying to do. Which is a real struggle for Facebook; gossip is so much more interesting then your average ad that their click-through rates are terrible.

Sometimes they're the same, but that doesn't mean they're the same.

I agree, but advertising utility varies from site to site and in implementation method.

For example, I click quite frequently on Google Ads in my search results, because the ads are related to my activity.

On the other hand, I never click on Facebook ads, because a) they look ghetto/sleazy, b) they never provide any useful content related to my interests.

There's a ton of bad advertising. That doesn't mean it's all bad.

I agree. I've never clicked on a facebook ad either. They seem scammy to me. Advertising on social media is far harder than on a site where you have some indication of intent.

Advertising can add value when it transmits novel information that would be hard to get some other way. But it usually doesn't.

It's mainly an arms race to distort natural market outcomes. Coca Cola doesn't spend over a billion dollars a year advertising because they want to make you aware of some new fact. They just think they can make much more than that billion back by manipulating you.

Nice conspiracy theory.

Advertising is there to make sure you're aware of something. It's telling you "Hey! There's this product/movie/service etc that you might not have known about".

I find advertising extremely useful to know about new things.

Are you seriously suggesting that Coca Cola spends a billion dollars a year to reach people who are unfamiliar with their beverage?

I'm not sure what conspiracy you think I'm suggesting. There is nothing particularly hidden about what advertisers do. Go talk to people who have made ads for a living. Or take a media literacy course. Heck, go watch the Superbowl beer commercials and tell us what novel product information is being conveyed there: http://dailycaller.com/2011/01/27/top-10-super-bowl-beer-com...

What is this Coca Cola thing everyone keeps talking about? I've never heard of it.

The beer commercials are actually quite a bad example in this case: Coca Cola certainly don't spend billions a year to reach people unfamiliar with their beverages. Beer companies do.

A major target market for alcohol is those either underage or just starting drinking. Habits and personally preferences are frequently set very early on - Superbowl beer commercials may be designed for press, but a significant bulk of advertising money is spent by beer companies to convince people who have just started drinking that their brand is the right brand.

They're a great example of the low informational content. The point of the commercials isn't to inform people of the existence of Budweiser. As you say, the purpose is to persuade them to drink it.

This was what advertising was about in the 30s maybe. Since then its gotten sophisticated, employing tricks that prey on our comparatively unsophisticated psychology making you want things that you otherwise wouldn’t.

Besides, if advertising didn’t exist or was illegal or something, couldn’t we just create a webapp to let people exchange information about interesting products and services and that would be the end of that problem. No need for information about products and services to be so pervasively integrated into every nook and cranny of our society.

You don't have to buy everything you see just like you don't have to hit on every pretty girl that you see. We still have the power to say no, regardless of the messages. We could say that pretty girls everywhere leads to impure thoughts right? Advertising is just like a pretty girl -- you are under no obligation to act on your 'unsophisticated psychology.' if you disagree with me, then the terrorists have won.

The obvious difference is that advertising is a whole profit-driven industry consciously designed to manipulate people's thoughts and behavior, whereas pretty girls are just going about their business.

You talk about one's psychology as if it's something separate that you can choose to act upon or not. That's a false split; one's psychology is the mechanism that does the choosing. That is what is getting manipulated for profit.

What is a "natural market outcome?"

By natural I mean "unmanipulated". Here, it's sense 6: http://en.wiktionary.org/wiki/natural#Adjective

Part of that is due to distortions caused by tax regulations. Advertising spending is basically a tax writeoff so effectively costs nothing.

How is advertising spending basically a tax write off that effectively costs nothing?

I'd love to see some evidence for that.

As far as I know, it's just another business expense, which means you deduct it from your profits. Coca Cola paid about 17% in taxes for 2010 [1], so if you squint hard enough I guess you could look at it as a 17% subsidy. But since that's true of any reasonable business expenditure, I don't see it as a significantly distorting incentive.

[1] http://www.stock-analysis-on.net/NYSE/Company/Coca-Cola-Co/F...

I disagree with you - but I'm not downvoting you because I think you bring up an interesting point. The problem, though, is the advertising on buy.com, monoprice.com, amazon.com and even google.com is actually quite useful for me. Sometimes even the ads on dpreview.com are interesting. The issue here is intent - on these sites, I am looking to buy products, product reviews, or (in the case of google) searching for something that might be product related.

On my social networks (Path) - my intent is to see what my niece is up to, what my friends are doing, and what my mother's latest project is.

It is not (and never has been) to "Find a Female Friend in Redwood City", or, "Check out the Kmart Special".

It is this disconnect between intent and ad-presentation that makes the pollution of the twitter feed so offensive.

Begone, marketing department! The developers are having a scrum.

Yes. Eliminating conflicts of interest works wonders for an organization. And not just in the obvious ways: "It is difficult to get a man to understand something when his salary depends upon his not understanding it!" -- Upton Sinclair

I think the article is alluding to the fact that charging users gives a business an incentive to milk those users.

It's similar to the debate about customer support as an avenue for sales or as an expense. The business's incentive is to provide the worst customer support it can without making users drop the service.

Another example would be video games and DLC. Companies can wall off features that should be "in the game" and force their customers to pay extra for it.

I don't necessarily buy his argument, but it's not entirely black and white.

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