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Predicting OpenAI's ad strategy

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Re: Predicting OpenAI's ad strategy

#471

Post by majormajor »

thrwaway55 wrote: post #415
sdenton4 wrote: post #248

Earlier quoted context omitted.

It's a collective action problem. If everyone pays higher wages, there's a greater supply of money for buying stuff / solving problems (assuming the higher wages aren't eaten by rents). No individual form recoups all of the higher wages they pay their workers, obviously, but there's a larger market for the goods of everyone has more money.

Is there? Covid stimulus would say there isn't. Granted a company raising wages doesn't print money out of air like the Fed but the amount of goods doesn't change, the cost of the goods adjusts to the monetary supply. You now pay more for the same.

The Covid stimulus that prevented a huge wave of unemployment in more industries beyond travel and hospitality while inflation remained quite low for the calendar year following March 2020?

Or are you blaming the 2020-and-2021 stimulus for the 2021-through-2023 bullwhip-effect predictable-yet-not-mitigated inflation as things re-opened and demand returned for stuff we'd ramped down supply chains for? While chasing stupid obviously-not-permanent-change trends like Peloton stock instead?

Look at how much of the country lives paycheck-to-paycheck, and the income limits of the stimulus checks - how can you connect those people getting immediate money in 2020 or early 2021 to inflation at the end of 2022?

I didn't even get Covid stimulus checks and yet I also spent way more in 2021 and 2022 and 2023 on a lot of categories of goods than I did in 2020. Cause I went outside and did things more.

Re: Predicting OpenAI's ad strategy

#473

Post by ronsor »

Aerroon wrote: post #449
csense wrote: post #209

Earlier quoted context omitted.

Advertising spend being too high is a symptom of a supply glut. Too many products in the marketplace, not enough consumers to buy them. In a different world where there are higher wages, more people would have more spending power. Then companies wouldn't have to spend as many dollars on advertising, which they could split between higher wages, higher margins and lower prices. Alas, the short-term single-firm directio…

> In a different world where there are higher wages, more people would have more spending power. I don't think that's true, not for random goods. Rent scales with disposable income. If most people make more money, then rent becomes more expensive. Rent essentially vacuums up all the excess money people have available. (Rent = housing in this case) Why would people want to live in these more expensive places rather th…

Food and clothing are often 5-10x cheaper in those countries compared to what people pay in America.

Re: Predicting OpenAI's ad strategy

#474

Post by thayne »

gruez wrote: post #305
roughly wrote: post #300

Earlier quoted context omitted.

> A simplified model is needed otherwise rigorous analysis becomes impossible If your tools aren’t capable of rigorous analysis of a model that retains enough detail to capture the salient features of the thing they’re trying to model, they’re not the tools for the job.

What's the "salient feature" that's missing? From all the other replies it sounds like people are still relying on the handwavy argument that "pay workers more -> workers spend more -> you can pay workers more -> repeat", but can't articulate where the actual growth is coming from. If this is true, the communism would have beaten capitalism, because they would be able to exploit this better than any capitalist system…

> What's the "salient feature" that's missing?

Multiple products. Multiple employers. A currency distinct from a consumable product.

A simplified model could be useful, but yours goes too far.

It doesn't take into account effects like that by paying more you can attract more, and more productive workers. Or that it puts pressure on other employers to increase wages.

> but can't articulate where the actual growth is coming from

I am not an economist, but I think one situation where this works is where you are competing for workers with other employers that have high margins, and pay their workers relatively little. In that case one of two things happens. Either other employers also increase wages, leading to their workers also having more money, which they can spend on your product, or they don't compete on wages, and you can outcompete them in getting the best workers.

The key is that total productivity doesn't necessarily improve, but wealth distribution becomes more equitable.

Re: Predicting OpenAI's ad strategy

#475

Post by jonasdegendt »

46493168 wrote: post #172
Quarrelsome wrote: post #87

Earlier quoted context omitted.

sure but if Netflix keeps up its transition to cable then more people will return to the high seas.

There’s an entire generation (Gen Z) that can’t navigate a file system, so I doubt piracy is a true threat in the long term.

Most Zoomers around me that pirate use some application that obfuscates the torrenting part away, they just have to know how to use a search box and hit play.

Re: Predicting OpenAI's ad strategy

#476

Post by [deleted] »

matheusmoreira wrote: post #431
mancerayder wrote: post #44

Earlier quoted context omitted.

This kills me, and you're right - there's no escaping the ads even with a sub. Take online journalism as an example. We're already being double-billed. Expensive subscription news like WSJ, Bloomberg and it's been a while but even FT require ad blockers even if you're subscribed.. If you're not subscribed you don't even see the ads because you can't see the full article. It's wild that we've normalized this. There's…

> There's no longer any argument in favor of an ad model when you're paying 20-30 dollars a month already Sure there is. CEO needs a new yacht. He can't afford to leave money on the table. All those subscribers? They must have a lot of disposable income if they can afford to blow it on "journalism". It would be stupid not to advertise to them.

[deleted]

Re: Predicting OpenAI's ad strategy

#477

Post by vanviegen »

Aurornis wrote: post #192
bearjaws wrote: post #62

There is something to be said about the state of advertising. Increasingly it seems you must go to the almighty Google or Meta in order to launch any business. We're looking to expand into a new business line and have out grown our pharmacy capacity. The new business line will cost about $2M in software dev, and $3M for the new facility. The advertising budget? $40,000,000 (annual). We can build 10 robotic pharmacies…

> The new business line will cost about $2M in software dev, and $3M for the new facility. The advertising budget? $40,000,000 (annual). The reason the advertising budget is such a high number and a recurring charge is that effective advertising returns an ROI on each dollar spent. If the software budget was increased 10X to $20 million, would the company get 10X as many customers? No. What about the facility? If you…

The problem is that it's a zero-sum game for a large part. People are hopefully not going to buy more medecine because of pharmacy ads. So the excessive spend on ads is driving up costs for everybody, and causing insane profits for a handful of companies.

I have no solution to offer though. Just thinking out loud... what effects would a limit on advertisement budgets relative to total expenditures have? That would force companies to spend their money mostly on actually creating value for the customer, instead of just selling the hell out of a mediocre offering.. ?

Re: Predicting OpenAI's ad strategy

#478

Post by sandspar »

browningstreet wrote: post #151
plagiarist wrote: post #123

Earlier quoted context omitted.

I don't pay for any content that has ads in it, full stop. I decided this a while ago when I noticed how many full page ads were in magazines. I would cancel a subscription over this.

I pay a handsome subscription sum for The Wire music magazine. The ads are an important resource in a niche marketplace.

Somewhat similar but I love my niche Instagram ads. Meta serves me endless ads for diecast miniatures, art toys, obscure manga etc. Stuff that I love and would never have found otherwise.

Re: Predicting OpenAI's ad strategy

#479

Post by p_v_doom »

csense wrote: post #209
bearjaws wrote: post #62

There is something to be said about the state of advertising. Increasingly it seems you must go to the almighty Google or Meta in order to launch any business. We're looking to expand into a new business line and have out grown our pharmacy capacity. The new business line will cost about $2M in software dev, and $3M for the new facility. The advertising budget? $40,000,000 (annual). We can build 10 robotic pharmacies…

Advertising spend being too high is a symptom of a supply glut. Too many products in the marketplace, not enough consumers to buy them. In a different world where there are higher wages, more people would have more spending power. Then companies wouldn't have to spend as many dollars on advertising, which they could split between higher wages, higher margins and lower prices. Alas, the short-term single-firm directio…

> the real cause of nobody being able to afford anything is rent extractors.

Employers/Owners are essentially rent extractors to workers. Its even worse IMO. They buy some of your time to do stuff for them. They also lend you the tools and materials to do your job. And they own whatever you produce. If you are selling your one hour for 100 bucks to produce ten linen coats worth 100 bucks each, you get a 100, everything else - minus costs of materials and your 100 the employer gets to keep as free rent.

Re: Predicting OpenAI's ad strategy

#480

Post by utopiah »

mancerayder wrote: post #44
MontyCarloHall wrote: post #6

I think ads will inevitably roll out across all tiers, even the expensive paid ones. Ad revenue isn't uniformly distributed across users, but rather heavily skewed towards the wealthiest users, exactly the users most able to purchase an ad-free experience. The users paying $20 or $200/month for premium tiers of ChatGPT are precisely the ones you don't want to exclude from generating ad revenue. Google realized this a…

This kills me, and you're right - there's no escaping the ads even with a sub. Take online journalism as an example. We're already being double-billed. Expensive subscription news like WSJ, Bloomberg and it's been a while but even FT require ad blockers even if you're subscribed.. If you're not subscribed you don't even see the ads because you can't see the full article. It's wild that we've normalized this. There's…

> Take online journalism as an example.

Depends entirely the kind of journalism you are referring to and the kind of business model they want. I can't imagine 404 Media adding ads to their premium feed.

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