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The math’s not pretty on digital advertising’s future revenues? (2017)

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Re: The math’s not pretty on digital advertising’s future revenues? (2017)

#101

Post by harry8 »

hyperbovine wrote: post #79
themagician wrote: post #62

Earlier quoted context omitted.

The content that Google and Facebook produce is garbage. It’s only barely better than nothing at all. Most people would not pay for the kind of content that shows up on Facebook and YouTube by so-called “content creators”. Facebooks ads are garbage except in certain circumstances. Everyone knows this, including the big brands, but they continue to do it because it makes the board happy when they see their brand on FB…

I would pay to use Google. Especially if it meant they would remove the tracker from out of my ass.

Pay me and I'll lie to you about what Google will do if that's what will make you happy. No sillier than paying Google given their credibility is zero and there are so consequences to them for lying.

Re: The math’s not pretty on digital advertising’s future revenues? (2017)

#102

Post by therealmarv »

This is a bubble which will not burst because we are speaking of Google. If (theoretical) Google will be valued by it's real profits and downgraded by ads profit the WHOLE online ad industry will go bankrupt. But this is really unlikely because ads pricing is not the same as stocks on an a stock exchange.

Re: The math’s not pretty on digital advertising’s future revenues? (2017)

#103

Post by adventured »

scarface74 wrote: post #75
MarkMc wrote: post #41

Wow this article is so very wrong - Google and Facebook have enormous advantages over Disney because (a) they have other people producing valuable content for free ; (b) they know much more about each viewer than Disney. Google's revenue today is six times as large as it was a decade ago. And I expect its revenue in a decade to be at least 3 times as large as it is today. The reason is that many of the causes of past…

The difference is that Google’s profit can easily be cut off by an ad blocker. Facebook’s ads are “organic” and are viewed mostly on mobile within an app - meaning harder to block.

Google controls search, Android, the Play store and Chrome. The most popular search engine, the most popular mobile OS, the most popular app store and the most popular browser.

No, its profit can't be easily cut off. They control the environment in all regards and have the leverage to dictate terms to nearly everyone. That's why they'll do ~$130 billion in sales this year, despite the popularity of ad blockers.

A tiny percentage of users will evade Google's moves to ensure its advertising survival? Sure, and it won't matter in the least.

Re: The math’s not pretty on digital advertising’s future revenues? (2017)

#104

Post by HillaryBriss »

> There is zero reason to think that a tech company can create content better than anyone else — which is the only way anyone knows of to capture any future ad growth. They have zero advantage over Disney. They are coming from a position of weakness — Disney already has significant TV ad revenue, and extensive experience in making content we love.

totally agree. and, in November, we had this crazy agreement between Google and Disney for online digital ads: https://variety.com/2018/digital/news/disney-google-digital-...

I gotta wonder what kind of terms Disney squeezed out of Google for this.

Re: The math’s not pretty on digital advertising’s future revenues? (2017)

#105

Post by gpsx »

The article talks about people companies and factories, and I think it is calling a tech company a people company. Lawyers and engineers are not the same in the sense that lawyers have to spend hours of time to bill clients (in theory at least). With a software company, if all the engineers walk out, the company can still go on serving the same product (in theory at least). Once software is made you can make as many copies as you want essentially for free. And there is a huge barrier to entry for something like Google or Apple, or any large software product, so it is difficult to replace these companies. So I think they deserve to be in a different multiples category.

But this isn't the only reason someone like Google can have such a large multiple. I think there is the possibility of transformation into a new market, not just dominance of its existing market. You could call Google an AI company instead of an advertising company. There might be some big economic potential for AI and that is what the large multiple can capture. The same applies for Amazon in that they could become a strong player in everything that is purchased, not just in online shopping. And they seem to have a real chance of moving in this direction. And, to underscore the fact that they are trying to do this, they are taking a very small profit right not to try to build their presence, and then they will start pulling profit later when they have a more dominant position.

Re: The math’s not pretty on digital advertising’s future revenues? (2017)

#106

Post by joshuamorton »

arthurofbabylon wrote: post #89
chiefalchemist wrote: post #81

> "There is zero reason to think that a tech company can create content better than anyone else — which is the only way anyone knows of to capture any future ad growth. They have zero advantage over Disney." I was following but til this point. Unfortunately, it is false assumption, fatally false. I'm going to over-simplify a bit but...The tech companies know what you watched, how much you watched, at what point you s…

I think you’re fundamentally misinterpreting the value of creativity here. While audience data is valuable for marketing existing shows, it currently has almost no value for creating new shows. Just take a look at YouTube creators. Some guy in Australia who ignores data and makes things with mud and plants produces content more popular than almost anything else. Sure, Google owns the platform, but they remain reliant…

>While audience data is valuable for marketing existing shows, it currently has almost no value for creating new shows.

Netflix's success story entirely contradicts this. Netflix's whole strategy with their originals is to create lowish cost things that appeal to market segments that they know exist but currently don't have shows anywhere (one of their big bets here is international/non english audiences).

Re: The math’s not pretty on digital advertising’s future revenues? (2017)

#108

Post by aasasd »

skywhopper wrote: post #61
MarkMc wrote: post #41

Wow this article is so very wrong - Google and Facebook have enormous advantages over Disney because (a) they have other people producing valuable content for free ; (b) they know much more about each viewer than Disney. Google's revenue today is six times as large as it was a decade ago. And I expect its revenue in a decade to be at least 3 times as large as it is today. The reason is that many of the causes of past…

I think you misread the article, which is not about the segment of the ad market that wants to know so much about its audience. Instead it’s about the ads that are currently on TV. The ads that are about broad brand recognition, not about microtargeting the audience. The point is that Google and Facebook already won the battle for their markets but they have no particular advantage over other media companies in compe…

Personally I didn't even know Google and Facebook tried to produce something. What was that? I've only heard about YouTube's programs for creators, with workshops, free studio time and such.

Re: The math’s not pretty on digital advertising’s future revenues? (2017)

#109

Post by zozbot123 »

hyperbovine wrote: post #79
themagician wrote: post #62

Earlier quoted context omitted.

The content that Google and Facebook produce is garbage. It’s only barely better than nothing at all. Most people would not pay for the kind of content that shows up on Facebook and YouTube by so-called “content creators”. Facebooks ads are garbage except in certain circumstances. Everyone knows this, including the big brands, but they continue to do it because it makes the board happy when they see their brand on FB…

I would pay to use Google. Especially if it meant they would remove the tracker from out of my ass.

I wouldn't. Google search is garbage these days (if only because it's pretty much a monoculture, and that leads to SEO arms races) and their other services can easily be replaced by paid equivalents that are far less likely to be a single point of failure.

Re: The math’s not pretty on digital advertising’s future revenues? (2017)

#110

Post by HillaryBriss »

arthurofbabylon wrote: post #89
chiefalchemist wrote: post #81

> "There is zero reason to think that a tech company can create content better than anyone else — which is the only way anyone knows of to capture any future ad growth. They have zero advantage over Disney." I was following but til this point. Unfortunately, it is false assumption, fatally false. I'm going to over-simplify a bit but...The tech companies know what you watched, how much you watched, at what point you s…

I think you’re fundamentally misinterpreting the value of creativity here. While audience data is valuable for marketing existing shows, it currently has almost no value for creating new shows. Just take a look at YouTube creators. Some guy in Australia who ignores data and makes things with mud and plants produces content more popular than almost anything else. Sure, Google owns the platform, but they remain reliant…

> Some guy in Australia who ignores data and makes things with mud and plants produces content more popular than almost anything else.

As a great screenwriter once said: In Hollywood, nobody knows anything.

But in Hollywood, they're used to that reality. Disney really does know how to actually create media content that billions want to consume. They know how to play this game.

Tech companies are trying to learn too, and they've noticed something, as the article points out: it costs a shit ton of cash.

Because nobody knows anything.

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