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Comment by bee_rider | Hacker News Reader

It comes from the real economy in the sense that it is money they could be spent on something productive, but was instead wasted on ads.

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In a video I watched recently there was a breakdown of how much a plumbing company had to spend on "marketing" (aka: Google ads placement, Facebook/Instagram) to attract customers and their per-click pay was about 60 USD, they were spending around 16-18k USD per month on online ads to keep the business afloat.

I had no idea that physical small businesses like that needed to spend so much on marketing just to be found.

The very first thing you discover as a business owner managing cashflow is how hard you must work to get customers versus to provide a service.

Have to seems like a strong phrase. I found my last plumber and window guy on a facebook neighborhood group. Local ads for general services can be quite expensive, but doing some marketing through local groups only costs your time. I can see how driving business though clicks is attractive, but I'd be surprised if there was no alternative.

Have to if you want to scale the business, if you are a sole trader doing small gigs it's probably very achievable to only use local groups. If you rely on people searching for "plumbers in <X> city" while running a small business with some 5-10 folks I don't think you'd get enough work.

You don't want to use a plumber that has scaled their business. That means that they're sending out a new hire to do your plumbing rather than the plumber that originally built the company's reputation.

The best plumbers spend $0 on advertising. They've got enough business through repeat customers and word of mouth to keep their small set of plumbers busy, and they're expanding slowly enough to properly train apprentices and ensure quality.

And, as a customer, you find that plumber how? What about when they tell you they'll be available 2 months from now for a 1 day service?

You find the plumber by asking your local network. Neighbors, etc.

When I needed an emergency water heater I asked my boss who manages a few of his rental properties. When I needed a new roof I asked one of Facebook/Reddit/Nextdoor. I’d always favor word of mouth recommendations vs advertising.

That's great for already establish plumbers, not for new ones.

Its worse if you get bombarded with negative reviews, which is why stuff like yelp holding you hostage is so bad. If you own an independent business outside of marketing, your reputation is everything. Especially now that anyone can blast your name because they didnt like how you said shiboleth or whatever.

So if you have a zillion negative yelp reviews, which you have no idea where they came from, since there's more negative reviews than you've ever had customers, but they want your money to hide them. ;)

> In a video I watched recently

Macy with Morning Brew ?

https://www.youtube.com/watch?v=ucWsaVbEu78

Exactly that one, couldn't remember at the time I posted, thanks!

> they were spending around 16-18k USD per month

Unfortunately, this doesn't mean too much without knowing the size of the business.

Sales are the most important thing in business. Everything else only matters insofar as it drives sales.

Businesses aren’t real, they are just imaginary things that people use to help us organize the act of building and distributing things.

Ads are a necessary matching method in capitalism, there is no better alternative unfortunately.

I don’t think this is true, but I also don’t know anybody way to verify it either way. Enthusiast forums were always a better source, although native ads can mess that up.

But, even if ads are a necessary evil, they are definitely overhead (in the sense that they don’t actually accomplish anything, just influence the decision as to what should be done). Maybe we can define some sort of ad-efficiency metric for an economy; what percentage of the money is spent influencing decisions, what percentage is spent actually implementing the decisions…

Here is a longer version of my thinking: https://news.ycombinator.com/item?id=44714407

I don't know if that's quite right. A nice business directory would probably be better but most people don't want to settle for that.

Here is a longer version of my thinking: https://news.ycombinator.com/item?id=44714407

Nah I don't think the directories need to be reviewed (except for listings for things that don't actually exist.) Just show the listings in lexicographic order like how phone books worked.

We already have the law as the meta norm. Let law enforcement do its job.

Who is making the directory?

Is it public like Wikipedia? How do you decide which businesses are notable enough?

Is it the government? Of which country?

Can anyone submit without approval? It would get spammed to ruin.

Etc etc.

>How do you decide which businesses are notable enough?

Are the a non-duplicate business selling something

>Is it the government? Of which country?

It doesn't matter

>Can anyone submit without approval?

As long as your submiting information about a non-duplicate business that's selling something.

>It would get spammed to ruin.

As long as its deduplicated no one would care.

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