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Instagram Is Becoming Facebook’s Next Facebook

nytimes.com

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Re: Instagram Is Becoming Facebook’s Next Facebook

#51

Post by objclxt »

olewhalehunter wrote: post #39
ArtDev wrote: post #37

Earlier quoted context omitted.

The gold standard of fake news. As fake as it gets.

They are also one of the only big news organizations that regularly criticizes Facebook, so I guess the answer to the original question of why more people don't criticize Facebook is that the only demographic that are interested in that kind of thing are conspiracy theorists.

> They are also one of the only big news organizations

Infowars is to legitimate news organizations as Mackeeper is to virus scanners.

Re: Instagram Is Becoming Facebook’s Next Facebook

#52

Post by arjie »

icebraining wrote: post #43
coralreef wrote: post #22

Earlier quoted context omitted.

Hmm, not sure if "extracts profit margins" is the right terminology. In mobile games, you could have a lifetime value of a user that is higher than their acquisition cost. This generates a model where you can spend money to make money. In this instance, advertising is fuelling user acquisition which fuels profit.

The question is whether the whole mobile game industry makes more money by advertising, or whether those games that advertise just make more money at the expense of others. Imagine that in a world without ads, game revenue is: Game A: 600, Game B: 600, Game C: 600 But then A spends 300 on ads: Game A: 1200 (-300), Game B: 300, Game C: 300 In this case, game A "spent money to make money", but the overall industry's re…

You're assuming perfect market saturation: every consumer has a max spending budget for this good that they're constantly up against and it's just how they distribute it that matters. This seems unlikely to me based on personal experience (if there's no game I like I play no games) but if you have better data than I do then I suppose you're right.

For instance, my younger brother is a fan of the Darksiders game series. I saw an advertisement for the new instance of the game. I told him about it. When it reaches a price he wants he'll buy it. But until it does, he's not going to sit around buying other games just to fill up the budget.

Re: Instagram Is Becoming Facebook’s Next Facebook

#53

Post by coralreef »

icebraining wrote: post #43
coralreef wrote: post #22

Earlier quoted context omitted.

Hmm, not sure if "extracts profit margins" is the right terminology. In mobile games, you could have a lifetime value of a user that is higher than their acquisition cost. This generates a model where you can spend money to make money. In this instance, advertising is fuelling user acquisition which fuels profit.

The question is whether the whole mobile game industry makes more money by advertising, or whether those games that advertise just make more money at the expense of others. Imagine that in a world without ads, game revenue is: Game A: 600, Game B: 600, Game C: 600 But then A spends 300 on ads: Game A: 1200 (-300), Game B: 300, Game C: 300 In this case, game A "spent money to make money", but the overall industry's re…

Hmm it is entirely possible to attract new users and access more disposable income (bigger pie). This is backed up with empirical data; aggregate mobile game and app store revenues are growing every year.

So while advertising doesn't give consumers more money to spend, it can persuade them to spend higher portions of their entertainment budget on games.

Re: Instagram Is Becoming Facebook’s Next Facebook

#54

Post by nafizh »

olewhalehunter wrote: post #39
ArtDev wrote: post #37

Earlier quoted context omitted.

The gold standard of fake news. As fake as it gets.

They are also one of the only big news organizations that regularly criticizes Facebook, so I guess the answer to the original question of why more people don't criticize Facebook is that the only demographic that are interested in that kind of thing are conspiracy theorists.

"big news organizations" - usually I don't do this on hacker news. But, LOL.

Re: Instagram Is Becoming Facebook’s Next Facebook

#55

Post by icebraining »

arjie wrote: post #52
icebraining wrote: post #43

Earlier quoted context omitted.

The question is whether the whole mobile game industry makes more money by advertising, or whether those games that advertise just make more money at the expense of others. Imagine that in a world without ads, game revenue is: Game A: 600, Game B: 600, Game C: 600 But then A spends 300 on ads: Game A: 1200 (-300), Game B: 300, Game C: 300 In this case, game A "spent money to make money", but the overall industry's re…

You're assuming perfect market saturation: every consumer has a max spending budget for this good that they're constantly up against and it's just how they distribute it that matters. This seems unlikely to me based on personal experience (if there's no game I like I play no games) but if you have better data than I do then I suppose you're right. For instance, my younger brother is a fan of the Darksiders game serie…

Maybe not other games, but surely he spends the money somewhere. Hence the claim that ads extract profit margins from all other industries.

Re: Instagram Is Becoming Facebook’s Next Facebook

#56

Post by hkmurakami »

l33tbro wrote: post #15

It's disappointing that tech journalists don't go a bit harder at the founders when writing pieces like these. Sure, it's interesting to find out about Instagram's internal processes and their projections, but Facebook is becoming increasingly regarded as being the main contributor to a new kind of social malaise. Therefore, if Instagram is aspiring to that level of adoption, how can questions like this not be put to…

You know the scene in The Big Short where the WSJ guy isn't willing to go ask the hard questions to the bank contacts he has because he spent years building those relationships? That's what it reminds me of.

Re: Instagram Is Becoming Facebook’s Next Facebook

#57

Post by icebraining »

coralreef wrote: post #53
icebraining wrote: post #43

Earlier quoted context omitted.

The question is whether the whole mobile game industry makes more money by advertising, or whether those games that advertise just make more money at the expense of others. Imagine that in a world without ads, game revenue is: Game A: 600, Game B: 600, Game C: 600 But then A spends 300 on ads: Game A: 1200 (-300), Game B: 300, Game C: 300 In this case, game A "spent money to make money", but the overall industry's re…

Hmm it is entirely possible to attract new users and access more disposable income (bigger pie). This is backed up with empirical data; aggregate mobile game and app store revenues are growing every year. So while advertising doesn't give consumers more money to spend, it can persuade them to spend higher portions of their entertainment budget on games.

Yes, but that only changes the "gaming industry" to the "entertainment industry". The overall point remains.

Re: Instagram Is Becoming Facebook’s Next Facebook

#58

Post by Denzel »

_m8fo wrote: post #5

What exactly is the end goal of these advertising platforms, exactly? Ads in my mind are zero sum, so I'm pretty clueless on this front. One thing I find interesting is the simultaneous popularity of these newfound distractions and task/project management software. Are we solving problems that were intentionally created and calling that progress?

You're correct, the ad industry is zero-sum.

The end goal is as simple as it looks: support a new medium.

First it was newspapers and magazines and mail, then the radio, next television, and finally we've landed on the web. And in the future there will probably be another new medium that ad dollars shift to.

The strategy is simple -- rip market share away from the competitors. And it's working. Why? Because you can more aggressively target intent, track results easier, and garner more impressions since the inventory is both cheaper and plentiful on the web.

[1] Source for zero-sum as industry claim: https://www.bloomberg.com/news/articles/2014-03-03/advertisi... (TL;DR ad spending as % of U.S. GDP has remained relatively constant since the 1920s)

Re: Instagram Is Becoming Facebook’s Next Facebook

#59

Post by arjie »

icebraining wrote: post #55
arjie wrote: post #52

Earlier quoted context omitted.

You're assuming perfect market saturation: every consumer has a max spending budget for this good that they're constantly up against and it's just how they distribute it that matters. This seems unlikely to me based on personal experience (if there's no game I like I play no games) but if you have better data than I do then I suppose you're right. For instance, my younger brother is a fan of the Darksiders game serie…

Maybe not other games, but surely he spends the money somewhere. Hence the claim that ads extract profit margins from all other industries.

Do you, really? For most of the people I know, our entertainment budget is fairly flexible. If I'd spend £100 on something and if I wanted it, I'm probably not going to spend £100 on my second choice thing. In fact, I may not spend anything at all and just choose to spend my time on things I've already spent money on like going out to skate or something.

Mostly the cash budget is substantially higher than the time budget so people aren't​ going to buy a thing they don't like just to fill the time.

If ads help with allocation closer to people's real preferences, they're a good thing.

Re: Instagram Is Becoming Facebook’s Next Facebook

#60

Post by Denzel »

mattbettinson wrote: post #14
immad wrote: post #7

Earlier quoted context omitted.

Ads over time extract profit margins from all other industries. For example at least 50% of all profits from mobile games are spent on acquiring users from ads.

Do you have a source on that? I'm not challenging, I believe it, I just wanna see some proof

Maybe this will do it for you: https://www.bloomberg.com/news/articles/2014-03-03/advertisi.... Ad spend as a % of U.S. GDP remains relatively constant since the 1920s.
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