11–20 of 76 posts
On a side note, what if you are building a startup to deliver ads? :) (Any thoughts on building a startup for ad-tech)
I basically agree that what Amazon (and Google for that matter; disclaimer: I work for Google on display ads) is intent and intent is huge. Much as Facebook would like to become the de facto Internet, I don't see it ever capturing that intent (let alone Twitter).
That being said, I think people discount what an inordinate amount of good advertising has done and just focus on the negatives (eg the "shit you don't need"). For example:
1. While you might be able to afford a few dollars a month to pay for the cost of GMail, as one example (note: I have no idea what the cost would be here; I'm just making up numbers), would you? People are highly reluctant to spend on this. But more to the point, what about people in Africa or Asia for whom a few dollars a month is a significant sum of money? Those people can enjoy the same service with an ad-supported model; and
2. Traditional advertising channels (print, radio, TV) weren't affordable to smaller businesses. Things like Adwords have allowed many businesses to exist that otherwise couldn't before the advent of online advertising. How many jobs do you think this has created and supports?
But I do see the whole "eyeballs-then-advertising" SV model as peaking if it hasn't already. Facebook may well be the 800 pound gorilla that broke the camel's back on that one.
And while the author notes that advertising space is growing faster than purchasing power not all advertising space is created equal. What you simply has is a diversity of distribution channels for your advertising. That's a good thing. But not everyone will succeed with an ad-supported model, that's true.
To the author's problem of working on big problems, I agree. The fact that SpaceX spent less developing a launch system and reentry vehicle than was spent buying Instagram [1] with its 13 employees makes me sad that so many bright minds are working on the apocryphal social network for cats.
[1]: I realize with the 50%+ drop in Facebook's IPO price, that sum is now significantly less.
We all agree that bad advertising is annoying. We all agree that most advertising today is bad advertising. But that's no reason to stop working on advertising.
EDIT: Advertising is a $600B a year industry. It isn't going to disappear. Improving advertising seems like a good goal to me. Yes there are loftier goals, but this is a good one.
EDIT: I'm fascinated by the downvotes. Could someone comment on how I've violated the guidelines here?
What motivated me to write it is that in the past few weeks I've met SEVERAL entrepreneurs who are starting businesses that would have no choice but to depend on ads. I'm almost at the point where I want to start a campaign to convince people that this is a bad idea, given how many other important problems are not receiving enough attention. I'm not saying that people should become missionaries. Many of those problems will create huge companies. Data suggest that starting a traffic-driven business today is like starting a new Hotmail.
Online advertising is clearly a viable business model. The article correctly points out that aggregate purchasing power has grown slowly so their is more fighting for the same pool of dollars. The problem is not that advertising is a bad business, it's just a smaller business than some investors and founders expected. Facebook brings in hundreds of millions of advertising dollars per year. Not bad.
This wasn't quite the diatribe I was expecting. I basically agree that what Amazon (and Google for that matter; disclaimer: I work for Google on display ads) is intent and intent is huge. Much as Facebook would like to become the de facto Internet, I don't see it ever capturing that intent (let alone Twitter). That being said, I think people discount what an inordinate amount of good advertising has done and just foc…
2. To address the second question, the cost of traditional media: Adwords made new businesses more feasible because of the intent harvesting. It allowed people to pay to advertise to consumers who specifically wanted something, as opposed to a demographic block.
Instead of advertising to every 25-55 man who might want a corvette, they could advertise to men who were thinking about a Corvette right now. Previously, it cost serious bucks to reach those men thinking "right now" because it was dumb luck -- advertise to enough men in the right demographic, hit a few guys who had the intent.
To a significant extent, the additional data provided by Twitter and Facebook is no better or more useful than traditional demographic data made available by TV stations. Knowing you're a soccer mom with an SUV in Baltimore is only slightly more useful than inferring that from the market, income bracket, sex, and age group of viewers on a TV block.
Worse, a lot of that broad-demographic advertising is branding. It will always be easier to make an impression with a 30 second full audio/video TV segment than with any kind of internet ad.
Twitter/Facebook targeting information might be revolutionary in combination with TV ad inventory. Pairing that same data with internet ad inventory is (patently) not nearly as valuable, and it never will be.
That's why I'm proud I work[1] on ads. Let's take a step in the right direction (RESPECT THE USER!).
[1] http://kiip.me.
It turns out that most successful consumer internet companies in the last decade have had to turn to some form of advertising (FB, Google, Yahoo, Twitter, Pandora, etc). And knowing how to build those systems makes you someone in high demand.
Somewhat agree with Diego. But unfortunately, people are not used to pay on the web. I've built an extremely useful service but only 1 in 100 was willing to pay, which is ridiculous to say. On a side note, what if you are building a startup to deliver ads? :) (Any thoughts on building a startup for ad-tech)
Then you are starting in an overcrowded space. The only reason that the first internet empires have been ad-based is because it is the easiest and most obvious business model to try, given the existence of a large and rich existing advertising industry that is already used to supporting a lot of old media. It is not a particularly innovative business model however and is also probably not the biggest pile of money on the table.
Somewhat agree with Diego. But unfortunately, people are not used to pay on the web. I've built an extremely useful service but only 1 in 100 was willing to pay, which is ridiculous to say. On a side note, what if you are building a startup to deliver ads? :) (Any thoughts on building a startup for ad-tech)
To play devil's advocate, if only 1 in 100 people are willing to pay for your service, how useful can it really be? I'd think those 100 people are more qualified to judge how useful it is for them than the person who built the service.