Google: End of the Online Advertising Bubble • Hacker News Board

Re: Google: End of the Online Advertising Bubble

#151

Post by Xyik » Wed, May 04, 2016, 5:54 PM UTC

adwf wrote: post #121

I've always been a bit baffled by why it's called ad-fraud online, but nowhere else. You don't call it fraud if your TV ad is aired and I miss it because I'm making a cup of tea. No matter how many viewers you were told the show has. It's not fraud if I don't notice your roadside billboard because I'm focusing on driving. No matter how many cars you were told drive by. Advertising has always been a crapshoot with a l…

I'm not too familiar with how Television ads work, but online advertising has a clear-cut billing model based on very dubious measurements.

When an advertiser decides they want to bid CPM or CPC they want impressions and clicks from real people, not bots, crawlers, mis-clicks, hidden ads that still count as an impression but is difficult for anyone to actually see, etc etc. Then there is the whole problem with view-based attribution - or attribution in general. The fact that a 1d view attribution is commonly accepted is ridiculous when you think about it, particularly in re-targeting.

Re: Google: End of the Online Advertising Bubble

#152

Post by pessimizer » Wed, May 04, 2016, 6:05 PM UTC

nostrademons wrote: post #135

Udik wrote: post #43

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" 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…

When a random person searches for a company, it's probably > 100:1 odds that they're interested in the company's product, not in a job at the company. That's why companies put their products on the landing page and not their job openings. You have to understand that whenever you do anything as a consumer in modern corporatism, you are part of a numbers game. The company does not care about you , they care about the a…

> When a random person searches for a company, it's probably > 100:1 odds that they're interested in the company's product, not in a job at the company. That's why companies put their products on the landing page and not their job openings.

What exactly is the feedback mechanism to discover this "fact", or refine its expressions and exceptions? This is a self-reenforcing presumption.

Re: Google: End of the Online Advertising Bubble

#153

Post by njohnw » Wed, May 04, 2016, 6:13 PM UTC

For those of you that weren't able to make it through the entire report, there's this gem:

"90% of Google's revenues come from advertising. We expect Alphabet’s share price to go down by 75%. We get this number by revising its earnings down by 30%, stripping its 30x PE off its "growth premium" down to 15x, and factoring in the reputational damage."

The authors clearly assume that most of Google's ad revenue is from advertisers who don't track how much they spend on media relative to how much they earn -- when in fact their entire business model and the ad auction model they created is predicated on this. If the cost of driving a user to your site from a Google search results exceeds the expected value of that user, advertisers can adjust their bids accordingly.

Re: Google: End of the Online Advertising Bubble

#154

Post by nostrademons » Wed, May 04, 2016, 6:17 PM UTC

pessimizer wrote: post #152

nostrademons wrote: post #135

Earlier quoted context omitted.

When a random person searches for a company, it's probably > 100:1 odds that they're interested in the company's product, not in a job at the company. That's why companies put their products on the landing page and not their job openings. You have to understand that whenever you do anything as a consumer in modern corporatism, you are part of a numbers game. The company does not care about you , they care about the a…

> When a random person searches for a company, it's probably > 100:1 odds that they're interested in the company's product, not in a job at the company. That's why companies put their products on the landing page and not their job openings. What exactly is the feedback mechanism to discover this "fact", or refine its expressions and exceptions? This is a self-reenforcing presumption.

I'd arrived at it by estimating that the average person will end up comparison-shopping for about 100 different products or services during the time that they hold a job, but will have only one job. If you assume 2 years at a job, that's about 1/week, which seems reasonable, counting all the gifts you buy, restaurants you visit, trips you plan, service providers you look up, products you evaluate for work, etc. Wouldn't be surprised if it's even more.

For any given business trying to optimize their website, it's a lot easier than that. Just look at the traffic flows in Google Analytics. If everybody hits the landing page and immediately clicks on "Careers", maybe the focus of your landing page should be on the job opportunities available. If they don't, you're probably right to focus on the product. If a significant number of people visit "Careers" but not enough to move it to the front page, you may want to exclude visitors to it from your remarketing campaign. (A sibling comment indicates that this is trivial for both Google and Facebook ads.)

That more sites don't do this - when it takes all of about 15 seconds to diagnose in Google Analytics and a couple minutes to fix - is probably a good indication that the economic losses from this situation aren't all that significant.

Re: Google: End of the Online Advertising Bubble

#155

Post by onion2k » Wed, May 04, 2016, 6:26 PM UTC

a_small_island wrote: post #107

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…

>When the majority of people who want to buy nail varnish bypass search entirely and go straight to Amazon Do you even do this? My guess is the majority will never do what you're setting out to believe. Strictly speaking of Amazon, they don't even have the best prices these days.

If a purchaser is really price conscious then they'll turn to price comparison websites, everyone else will go directly to their favourite store, where 'favourite' is driven by services like Amazon Prime that add value rather than being anything to do with brand loyalty[1]. Either way, Google is not part of the equation.

[1] I have a Prime account because having it for Amazon Video and Amazon Music is far cheaper than paying for Netflix and Spotify. The fact I now go to Amazon by default to buy things because I get free, quick delivery is a bonus for me, and a big win for them if I'm paying more than other places for things I guess.

Re: Google: End of the Online Advertising Bubble

#156

Post by jpadkins » Wed, May 04, 2016, 6:28 PM UTC

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…

it's not based on the search, it's based on the your visit to their web site.

Re: Google: End of the Online Advertising Bubble

#157

Post by subpixel » Wed, May 04, 2016, 6:30 PM UTC

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…

I observe people doing this all the time. Especially people who are less technical than you or I.

Convenience trumps accuracy and people want a list of offers they perceive to be competitive, not a list of search results. Millions of people look on Amazon first, or Cheapoair, or Hotels.com, the list goes on.

Re: Google: End of the Online Advertising Bubble

#158

Post by tomtang0514 » Wed, May 04, 2016, 6:33 PM UTC

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.

If they already have the apps installed they're "converted" customer who don't really need advertising anymore. But how to get them know the app and install it in the first place? Ads impression is a common way beside recommendation from friends.

Additionally, most advertising are about pushing people to buy product like snacks, beer or cloths. I doubt many people really install a Zara or Gap app or put the website in their bookmark.

Re: Google: End of the Online Advertising Bubble

#159

Post by knorker » Wed, May 04, 2016, 6:34 PM UTC

"Q: Google’s ads on its search engine are legit. We mostly agree. The search engine is an amazing asset for the company. The CPC on google.com has risen year after year"

So... isn't that like most of Google's profits? Seeing as how they're both publisher and ad network they get 100% of the advertisers spend.

Does losing a fraction of a significant minority of even revenue warrant calling GOOG at $250? Ridiculous.

Re: Google: End of the Online Advertising Bubble

#160

Post by geocar » Wed, May 04, 2016, 6:49 PM UTC

qaq wrote: post #123

geocar wrote: post #115

Earlier quoted context omitted.

Right, so as far as the advertiser is concern, this is still in the "may or may not be working" space. The fact that a company working in digital advertising can get hundreds of thousands of dollars in "payout" without having to actually justify their value to the brand's bottom line, alludes to exactly what this article is about: Google is offering a diminishing opportunity for brand exposure, and as those "payouts"…

They are not working for a company they are working for themselves, they place ads that drive traffic to gaming properties and receive a share of profits. They put their own money at risk for traffic acquisition, if they are wrong they will loose money. So basically they generated enough sales to receive a 100K profit share payment from partner network to them for a given week and spent 40K on ad inventory netting 60…

Okay, if that's true, that's very impressive: You're saying that these guys invest 2 million each and bring home 3.1 million each?

I'd absolutely want to hear about this.