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Google: End of the Online Advertising Bubble

kalkis-research.com

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Re: Google: End of the Online Advertising Bubble

#71

Post by mtanski »

Udik wrote: post #43
red_admiral wrote: post #15

"Facebook on the other hand, has a better control of who is actually seeing its ads, and will benefit from the turmoil by gaining market share." Did they pay you to write this? Google ads in search will always be valuable because you can advertise nail varnish to people who have just searched for "buy nail varnish". This is also about the millionth post I've read which assumes that companies simply throw money at adv…

> Google ads in search will always be valuable because you can advertise nail varnish to people who have just searched for "buy nail varnish" Yes, how dumb is that? A few weeks ago I googled for a company I was going to interview with. Since then the ad spaces in my web pages have been filled with ads of this company, which sells IT services for logistics. I'm a sort of atypical consumer - not very willing to spend m…

> That's silly and a big waste of money.

Most sites that do retargeting do it based on number and stats. They know that if a rando that visits their site (but doesn't buy anything, doesn't sign up for a new letter, doesn't click on contact me) will convert at X percentage if they show him an ad.

So they do the math to figure out what that looks like after impression 2, 3, 4, 5, etc... somewhere there's a point at which the cumulative conversion percentage doesn't go up or goes up so slowly to not justify the cost and they stop.

So what seams like a big waste of money to you, seams like a profitable business decision based in fact to them.

Re: Google: End of the Online Advertising Bubble

#72

Post by jonatanheyman »

Rzah wrote: post #50
onion2k wrote: post #41

Earlier quoted context omitted.

Google ads in search will always be valuable because you can advertise nail varnish to people who have just searched for "buy nail varnish". Google and Facebook both have the problem that their business model is predicated on having thousands of small advertisers bidding on ads. That's what they leverage to generate profit. In any market that's dominated by a single entity that smaller companies won't compete with fo…

Of all the things that might happen, users going directly to websites rather than through google/facebook is by far the least likely. Whats more likely to happen is that someone will come along with better search with less advertising (just like Google did), or someone might build a better social network with less advertising (just like facebook did). There's as much precidence for these things reoccurring as there i…

Rather than using the URL bar, I think it's more likely that people will just open their Uber app, flight booking app, shopping app, etc. I don't think that is an unlikely development.

Re: Google: End of the Online Advertising Bubble

#73

Post by mtanski »

bhouston wrote: post #67
titzer wrote: post #37

I thought this article was poorly researched and the conclusions don't follow from any of the data presented. The narrative is basically just a disgruntled "old man yells at cloud" screed. Then I saw this: > This is a re-run of the online advertising crash of the early 2000s, when the proliferation of banners and pop-ups destroyed any value these ads had (and led people to install pop-up killers, just like with ad bl…

> It was not about advertising. High CPMs were part of the bubble. Not the primary core of the bubble but it did support a lot of companies. In the run up to the crash CPMs (for just impressions) were very very high, but after the crash they dropped 10x fold. This wiped out many companies that were dependent upon these fat CPMs for their continued existence. Some citations: https://www.quora.com/What-does-the-dot-com…

Arguably if the various vendors in the ad bidding lifecycle chain did more to combat fraud and only show 90% viewable ad (the tech exist) this would lead to lower volume of impressions and higher CPM since everybody is competing for the same audience.

A lot of these vendors' business are predicated on large scale and they tend to be reluctant to turn off bad actors.

Re: Google: End of the Online Advertising Bubble

#74

Post by jsonne »

red_admiral wrote: post #15

"Facebook on the other hand, has a better control of who is actually seeing its ads, and will benefit from the turmoil by gaining market share." Did they pay you to write this? Google ads in search will always be valuable because you can advertise nail varnish to people who have just searched for "buy nail varnish". This is also about the millionth post I've read which assumes that companies simply throw money at adv…

Facebook has this capability. Write a status or on a friends wall about topic X? In messenger? Just as good if not better than a Google search in intent land. That + demographics is even more powerful imho.

Re: Google: End of the Online Advertising Bubble

#75

Post by dsjoerg »

Udik wrote: post #49
jjoonathan wrote: post #44

Earlier quoted context omitted.

They can absolutely figure it out, just not for less than it costs to throw the ads at you, which is very little.

They're not wasting money in showing me that ad, its cost is negligible. They're wasting the money they could have made by showing me a relevant ad. For example, there's tons of books I might be interested in buying, and they might be able to extract that information from my browsing habits. It would be an advantage for me as well, to get suggestions about things I might be interested in. Showing me nail varnish ads…

Udik and his responders are talking past each other a bit. Udik is talking about Google + their advertisers as if they were a single entity, and it is dumb for "them" to advertise stuff he's not interested in.

However Google and their advertisers are not a single entity at all. It is efficient/smart for the advertisers to do retargeting (although a cap and funnel adjustments would make it even smarter) and it is efficient/smart for Google to take the money and run the ads.

Udik, ultimately and in the long run I agree with your point; smarter advertising infrastructure will uncover the lost value that you are pointing out. However, given the current structure of the advertising market and state of existing tools, neither Google nor the advertisers immediately stand to gain by changing their approach to people like you. We're in a local minimum/equilibrium.

Re: Google: End of the Online Advertising Bubble

#76

Post by [deleted] »

endymi0n wrote: post #32

What a load of BS. From all the demand side platforms I've dealt with, Google is by far the most serious about fraud prevention. They realized early on that while fraud boosts their short term revenue, they'd have a massive PR problem afterwards if this stuff continues. Nobody's vetting both publishers and advertisers as extensively as Google, their automatic ad verification and fraud prevention algorithms are top no…

[deleted]

Re: Google: End of the Online Advertising Bubble

#77

Post by Yhippa »

jonatanheyman wrote: post #72
Rzah wrote: post #50

Earlier quoted context omitted.

Of all the things that might happen, users going directly to websites rather than through google/facebook is by far the least likely. Whats more likely to happen is that someone will come along with better search with less advertising (just like Google did), or someone might build a better social network with less advertising (just like facebook did). There's as much precidence for these things reoccurring as there i…

Rather than using the URL bar, I think it's more likely that people will just open their Uber app, flight booking app, shopping app, etc. I don't think that is an unlikely development.

Facebook is trying to head that off by having app integrations in Messenger. The whole new bot craze too. Wonder if Google will jump on this train via Hangouts.

Re: Google: End of the Online Advertising Bubble

#78

Post by arbuge »

We are seeing the opposite of what this article claims. Conversion rates from Google traffic are good and ROI there is steady. Facebook traffic quality on the other hand seems to have steadily deteriorated over the last few months, and our ROI there has plunged.

Re: Google: End of the Online Advertising Bubble

#79

Post by Alex3917 »

red_admiral wrote: post #15

"Facebook on the other hand, has a better control of who is actually seeing its ads, and will benefit from the turmoil by gaining market share." Did they pay you to write this? Google ads in search will always be valuable because you can advertise nail varnish to people who have just searched for "buy nail varnish". This is also about the millionth post I've read which assumes that companies simply throw money at adv…

> If you spend a lot on an ad campaign for a product and your sales don't go up, you notice that and rethink your next campaign.

Most people who spend money on ads just want to be seen as the kind of people who spend money on ads, or else they just want to make their boss happy in the short term by telling them that they bought ads on Facebook or whatever. The chain of accountability is very diffuse, and most results don't really get tracked.

Re: Google: End of the Online Advertising Bubble

#80

Post by roymurdock »

Ads will shift from the annoying, low-quality banners and sidebar images to "native content" and "submarines" - ads disguised as objective information written by whatever website you are on. The industry will evolve, and ads will continue to annoy/prey upon people and make the ad ecosystem money.

I'm reading a David Foster Wallace article from 2004 in which the exact same thing is happening to the radio ad industry.

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