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Speculation On a Second Internet Economy Collapse
David Barrett writes "If you sell three billion ads a month and can't break even, what do you do? Drop prices by 40% and switch business models, apparently. Is this an isolated incident, or does it contribute to the growing pile of evidence that ad inventory is overpriced industry-wide, with Google being the worst offender due to its policy of requiring minimum bids on keywords that would otherwise go for cheap? Check out this analysis on my blog and make up your own mind."
Bubble 2.0. The burst is coming. See it live on slashdot.tv.
Caesar si viveret, ad remum dareris.
I use an ad-blocker and script blocker these days so I rarely see ads (I've maybe seen two in the several months that I've used it). Even when I did see ads, I've probably only clicked on 2 or 3 in my whole lifetime before just learning to mentally filter them out. When I want a product, I go google for it. The rest of the time I may be inspired towards a general product area by an ad, but I'll look for the best product I can get in that area, not necessarily the one that I saw advertised.
I'm probably not a very average consumer, but I've always thought the whole concept of advertising market was over-rated. I get that it's necessary in some cases, but the only ads that I find relevant to me these days are for upcoming movies (which I've often already heard about anyway).
which is totally what she said
Why should'nt it collapse...everything else is... Inflation takes it's tolls in many ways, Not only to do things cost more to buy. But many things get sold less.
I Need someone to rebuild a Digitech Digital Delay pedal for me....for me...for me...for me.
Sadly I wished Google/Yahoo/MSN was entirely "free market" - but it isn't. Google being the worse in how they manipulate it with Yahoo chasing up to emulate every move. With MSN its fairly easy to see the data and see the expense but still stuck with minimum bids that ultimately take away from potential sales & traffic.
I've been saying that since the IPO. Yes I bought shares, and yes I dumped them at a good price. The stock kept going up but I do not regret it at all. Ads are *way* overpriced, and when this next bubble bursts Google stock is going to tumble.
I am not a stock analyst so I'm not going to predict where the price will settle, but $477 a share (as of this posting) is WAY WAY WAY overvalued.
He assumes that it costs $0 to put up an ad. That makes his entire argument (that ads aren't there because Google forces up the price beyond $0.01) bogus.
But considering what advertising in other media costs, with less targeting or chance of success, and you'll have some idea as to how much of a bargain online ads really are.
I am officially gone from
Where does all the money from online advertising come from? The ones placing the ads online must gain more money from the views of the ads than they pay for displaying them, so appearantly a lot of people pay money to buy stuff after seeing ads? I don't know any people who have ever bought something by seeing an online ad. Add all the money paid by people buying something from an online ad in the entire world. Then subtract everything in that money that is related to the product and not its online advertising. How much is left? Enough to feed all those internet giants? Appearantly it is.
as opposed to allowing people to bid on every unclaimed typo and spam the system to hell....
equally the minimum bid system is common to all forms of auction.
yes Google are being a bit dodgy in how they manipulate the system but equally they (as the article says) don't want people to know exactly otherwise it makes it too easy for the system to be gamed at which point it looses all possible value. Google ads do well because they are generally clickable - in that you have a good chance of clicking on something relavent to what you searched for - that reputation is something that google understandably wants to protect.
As long as companies is willing to pay the price, google (and others) are willing to profit from it. Should advertisers become convinced that they pay more than what they see in return; then they might cease paying the price demanded. At which point ad-supported sites and services might see a drop in their budget. But until then, I do not think they will lower price just because they can.
The Long Now Foundation
Free market wants to pay zero dollars for an ad? You mean people want to pay more than zero dollars for milk, cereals and bread? Come on! No body wants to pay more than zero dollars for anything. But the other side of the equation is, no body would sell things below the cost of production, at least not for sustained long durations. Google has a minimum bid because that is the cost of production for that ad.
The author displays profound ignorance about economics.
sed -e 's/Chuck Norris/Rajnikant/g' joke > fact
free market means one can establish a new business in said market. NOT that established business shouldn't set their own price for the service they are selling.
Go ahead and establish a more efficient service than google's... but wait, what would be your interest in driving prices down, once you'll be the dominant player ?
--- Back to the trees, back to the trees !
Although the average consumer sees a lot of ads, the average consumer is also gradually switching to firefox (and the plugins, I expect).
And gradually ads become less relevant.
And gradually, as people realize they can eliminate ads, the trend will gradually increase.
until.. gradually, we'll have no funding for ads, and people will actually have to 'want' an internet presence, rather than being paid to have one.
I don't think that is such a bad idea... although, it'll bring back all the tripod/angelfire style accounts that were so popular 15 years ago, when ads didn't bring in revenue like they do today.
Which... will make it easier to avoid (or find) pointless websites.
"Check out this analysis on my blog and make up your own mind."
Translation: Visit my website to increase my ad impressions so I can make more money.
Ironic? I think so.
...he'd have put a few ads on his blog page. Getting slashdotted would have earned him, uh, maybe as much as $5.00!
Yeah? Well I think you're overrated too.
Actually, sometimes I want to pay for services. It creates a contractual agreement between the buyer and seller, and (in theory) guarantees that you'll receive service for payment.
If you want for email servers, then you get what you pay for... but if you use google's free service, you can't whine and complain when it doesn't work right.
Check out this analysis [CC] on my blog and make up your own mind.
And that's not even a trick to make us view ads, as his blog doesn't have any. A sign that times are changing!
You just got troll'd!
So, does this prove that step 3 is actually 'receive advertising funding'? It must be something important if it might precipitate the fall of web 2.0.
For example:
1. Make Website
2. Host Material (User Created or otherwise)
3. ??????? - (ADS? Really? WHO KNEW?! *sarcasm*)
4. Profit!!
How many of you have ever actually made a purchase based on seeing a web ad?
I'm pretty sure that I've never done that.
You assume that everyone hates advertising as much as you do and thus, in the future, the trend will extend to the extreme. You can't magically extrapolate trends like that, unfortunately.
If the people who really hate advertisements, and who would never (consciously) use them to make a purchasing decision, continue to block them -- then that would seem to increase the value of each successfully delivered advertisement?
I realize this isn't the primary thrust of the article, but ALL auctions start with a minimum bid, and the person selling the "item" sets the minimum bid. You don't see every item on eBay starting at $0.01, do you? Many do, yes, but the seller sets the minimum bid, and a reserve price. I don't see why you think this is so evil.
It is a single company that doesn't manage to make money in this market because it does it wrong. What Google has proved in the online-ads world is that what pays is to deliver the correct ad to the correct people. The first article clearly states that Lookery is not very picky about who to deliver their ads to and proceed to explain that its competitors manage to sell ads for 5 time Lookery's price because they craft their inventory more carefully.
That's not a new bubble, that is a vestige of the first one : failing to understand that one online ad on a webpage do not have a fixed value but that many parameters are to be taken into account.
The Wise adapts himself to the world. The Fool adapts the world to himself. Therefore, all progress depends on the Fool.
But ads are paid on a bulk click / click-through rate, not usually on a commission per purchase.
"The first internet bubble popped largely because all business models failed except for ad selling." (from the article).
I disagree. Pornography and Gambling as well as on-line RX have proven to be profitable over time. Perhaps the monetary profit margin is inversely related to the moral and cultural benefit to society.
One ring to bind them - should probably have more fiber and less rings in their diet.
I use Firefox and I don't use the ad plugins. I think you make a major assumption there by assuming everyone switching to Firefox will use ad-blocking plugins. I don't want to be bothered with attempting to install some plugin that has to be upgraded over time and maintained etc. etc. I don't want web browsing to be work. I just ignore the ads.
at least once in a while. The author's page has *no* ads. That's right, no ads. If only you had bothered to visit the blog page, not even RTFA. And the fact that the parent post is now at +5 insightful tells a sad (oft-repeated) story about /.
I'm not sure what your idea of 'work' is, but it certainly wasn't more than 30 seconds of 'work' to install adblocker plus... and it updates itself auto-magically... and now I don't have to worry about those annoying laughing flash ads promoting 'custom smilies', and whatnot.
But judging soley from the price of a single share is incomplete data. If I had a company at $10,000 dollars a share, but only 10 shares, it'd be a very low valued company (whether deservedly so or not). Many companies that are popularly tracked would have split on an ascent like Google's, but they chose not to. A better, but imperfect measure would be market cap.
That said, Google's market cap is 150 billion. CBS is at 12 billion or so. One analogy I've been fond of thinking of is comparing television advertising to internet advertising. It's imperfect, but still. The business models are different, as CBS has a higher demanding expense I would guess (TV show production/content creation/distribution I would guess more expensive than even Google's indexing of content from other people), but still over a magnitude more valuable does strike me as steep...
XML is like violence. If it doesn't solve the problem, use more.
People over time get sick of the "Trying to make me buy stuff".
Example: When I was a kid magazines like Amateur Photographer contained piles of ads which were basically directory listings. Item, price, condition. They were in fact useful data for buyers. What's the nearest supplier who has a second hand Leica M3 in excellent condition? Nowadays, the ads in photo magazines are demand-creators; reams of eye candy. More advertising, in color, is needed to pay for the content. What does it tell me? Five guys have half a page of trying to sell me the same digital camera I don't want. Do they have what I do want? Hard to say.
Google's problem is it wants to be a directory, but its advertisers want to distort its market by directing irrelevant traffic in the hope of selling something. Like bad coinage, bad ads drive out good ads. (Just like eBay with the crooks driving out legitimate sellers.) Ultimately the public gets turned off. (Do I ever click on a right hand link on a google page? No. Do I ever click on the top 3 links? Hardly ever. That's experience, not prejudice.)
So, my 2c worth is that this may be nothing to do with the recession and everything to do with the great public having had time to realise what a scam much internet advertising is. Someone will have to come up with a better paradigm. If people will still pay money for print magazines, how much will they pay for a verified Google for instance (I would personally pay a $10/month for a shit-free search engine where abusers were removed from search results, no messing.)
From scarped cliff or quarried stone she cries "A thousand types are gone, I care for nothing, no not one."
And on google.com, I get
, which is certainly geographic specific. But they do sell that adword, so what do I make about the rest of the piece?
"The first internet bubble popped largely because all business models failed except for ad selling."... This article already starts with a wrong assumption !!!
eCommerce is another business model. And it works quite well (CAGR approx. 20-25%/year).
ISPs have also another business model on the internet (selling pipes) and they make money.
Hosting, ASPs and SaaS (Software As a Service) are another business model and see the success of Salesforce.com for example...
Not without mentioning iTunes which is a mortar-to-click business model (you buy an iPod first and then you buy the service) that is quite sucessfull..
Parent is dead on. I don't want to pay TOO MUCH for things, but unless I pay for something I have no basis for argument if it eats my brain. *cough*Linux Audio Apps*cough*
If you sell three billion ads a month and can't break even, what do you do? Drop prices by 40% and switch business models, apparently
This is a sign that ad brokers and resellers MUST provide added value in order to make money.
Anyone can become a broker. The trick is to add value, so that customers will pay your premium prices. Advertisers will not pay a huge premium for unproven "advanced ad campaign technologies" that many of these brokers purport to provide. And if your competition charges less for a better service, don't expect to stay in business very long. At that point, your only choice is to substantially lower prices or change your business model.
Sound familiar?
I've bought music based on ads linking to band sites.
The problem is, the advertisers are making the ads more annoying. The people who don't hate ads now will start hating them when the advertisers make them jump around the screen playing bad music.
Slow down, cowboy! It has been 4 hours since you last posted. You must wait another few hours.
Less relevant is fine. But there will be a problem if the ads become effectively irrelevant because there is no longer an incentive for providers to continue supporting ad-funded services (e.g., gmail). I never click on embedded ads (the 3 or 4 times I did, it was on accident.) But I'm glad there are others out there who do hit them so all these free, web-based services continue to operate
Dot.Com 2.0: Die Harder?
~The TwoTailedFox posts again....
...they're still horrendously overpriced considering what it costs to run the ads (almost nothing).
The whole advertising industry is bound to collapse eventually, when some proper data on the effectiveness of advertising becomes available (I was searching for an old post I made on that topic but couldn't find it, it was in a discussion involving in-game advertising IIRC). I doubt this is it though, and even if it collapses on the web, the bullshit parade of advertising will continue on other media.
"When information is power, privacy is freedom" - Jah-Wren Ryel
That's pretty thin reasoning. By your logic you would have never installed Firefox in the 1st place. You realize that plug-ins "maintain" themselves, right?
There is a war going on for your mind.
"The first internet bubble popped largely because all business models failed except for ad selling." (from the article).
He's forgetting that there was also the speculative insanity that goes along with any bubble in any industry. There were many companies that made enough revenue to be possible if only the executive spending could have been reined in. I'm forgetting the name of it but there was a new media company that was doing something like $180 million in business but was spending $200 million. They produced content, text! It's not like that requires a huge capital investment. People are the biggest expense, get a cheap building somewhere, have your people work there, maybe rent a small bit of office space in a posh tower for impressing investors. But no, they put the whole organization in the posh tower, aeron chairs in every office, and shot their whole wad on overhead.
The internet has nothing to do with that kind of stupidity, it's endemic to human affairs. And the matter of crazy-stupid shit getting funded just because someone has a business plan? Again, common in any bubble, be it tech or tulips.
Kwisatz Haderach
Sell the spice to CHOAM
This Mahdi took Shaddam's Throne
It's a lot more 'work' if you have to ignore the adverts. Ad blocker can be updated yes, but it will still work without installing the updates - I'm sure there's an option somewhere for disabling plugin update checks.. but I'm quite happy to be getting updates.
It's possible to ignore things like google ads, as they're done fairly 'tastefully', but flash ads are quite irritating.
Anyway, it's your loss - doesn't sound like you've even tried it!
which is totally what she said
Clearly this is the fault of the speculators and not the underlying business models!
We should boycott this speculating blogger and refuse to visit his site!
I have firefox, and I have adblock, with no block packages enabled.
Reasonable advertisements are fine by me, if they get too instrusive, I add it to adblock. Adblock is still useful to have even when you're willing to view some ads.
I've been saying that since the IPO. Yes I bought shares, and yes I dumped them at a good price. The stock kept going up but I do not regret it at all. Ads are *way* overpriced, and when this next bubble bursts Google stock is going to tumble.
I am not a stock analyst so I'm not going to predict where the price will settle, but $477 a share (as of this posting) is WAY WAY WAY overvalued.
I don't think this is the case at all. Other companies, if you equate shares, would have the same price without stock splits.
Of course, morons will probably read posts like this proclaiming gloom and doom, and lose confidence for no reason at all.
The bigger question is, who benefits from this rabid rumor-mongering trying to lower confidence in google's stock?
Who is sueing google right now over youtube in one part of a multi-front SLAPP attack to stop all "unauthorized user participation" in the internet?
VLC FOR MAC IS DYING! IF YOU DEVELOP, PLEASE SAVE IT!!
so everybody needs to visit the link to see for himself that there are indeed adds, or not... I'll just take my chances and not look at the article nor the blog. I'm perfectly happy making uninformed jokes from here.
Maybe its being caused by the fact that more users are using firefox + adblock feature. No one is clicking on ads anymore :(
Duh.. that's why i put it in quotes. "Free market" as in creating a "Free market" a-la ebay where they selling price is the price the community is willing to pay.
Sadly google bumps the minimum selling price higher than the final value fee so in essence i'd rather have a real "free market" system than googles massaged fixed price quasi market demand system.
With googles increased control of such "Free market" becomes an even strong reason to get them to open up. The potential for control they exert seems much more dangerous than web browser or media player wars of the past.
Injecting a bit of html tags does not cost that much. But the value of Google is not merely tacking on bits of html. It is collecting all that data on the net and making it easily available. It costs money. That cost gets amortized over every bit of html it injects in.
I am sorry for your predicament, you want the service at a lower price. But so does every body for everything. As I said earlier, it is a free market. Google does not have a vendor lock or a platform lock on its user base. Any one can compete with Google. There is no switching cost to the user to go from Google to its competitor. If it is pricing the ads too high, it will go out of business. It is not like Microsoft with a defacto monopoly on OS or Office software.
sed -e 's/Chuck Norris/Rajnikant/g' joke > fact
The problem is, the advertisers are making the ads more annoying. The people who don't hate ads now will start hating them when the advertisers make them jump around the screen playing bad music.
Really? I thought part of Googles success was the fact that the adwords it displays in search results are mostly unobtrusive, but usually relevant if you take the time to look at them.
Advertisements have become more annoying over my lifetime, but the problem with most forms of advertising is that you can't measure annoyance, you can only measure sales -- and these aren't always mutually exclusive factors to the individual.
Compare Google and Yahoo! - the latter was dominant at that time (April 1999), but the lack of clutter/animated gifs helped (along with relevant data) popularise the newcomer.
That's the beauty of adblockers and online advertising - you can now link annoyance to sales - and market forces seem to be pushing away from annoying your customer.
at least it is for me, at best an advert will produce a 'Meh'. Usually they actually put me off whatever the product being hawked is. And this applies to companys too, but as been mention by a few posters already im not exactly the type of consumer theyre aiming this shit at.
Well, Bart, your uncle Arthur used to have a saying: "Shoot 'em all and let God sort 'em out."
The only thing that would collapse under lower pricing of ads is those that sell ads, ie Google, Yahoo, etc. Those who purchase ads, however, would flourish since these ads would become cheaper.
I think you hit on the real problem there. It's not that there *are* ads, it's that the ads are stupid and annoying. I'm seeing progress from IBM and some others in making the ads more fun and relevant, but there is still a long way to go. And internet advertisers will eventually have to realize that just because you *can* animate an ad, doesn't mean you *should* animate an ad. I've seen magazine ads for Carlton Draught that made me laugh my ass off as well as remember their name - no animation required.
Hell is other people's code.
You know, the "beach-bum from Hawaii that made a pile of cash on the Internet?"
He tells us in his latest radio ad that we have "only two years before they change the Internet, and you won't be able to make money like I did any more."
We'd probably better get to his website and sign up, before it's too late!
I mean, would a beach-bum from Hawaii steer you wrong?
Any technology distinguishable from magic is insufficiently advanced.
Nope - I hate the ads, too. I've always thought the ad generating revenue business model was a pile of nonsense - about time that bubble burst.
Uh yes, most people do hate ads, and some like myself never click a single ad, even if it's required as a clickthrough. Adblock + noscript + nukeanything = no ads.
Problem is everyone thinks ads (like marketing) are a magic cashcow. They aren't. If your product sucks, whatever it happens to be, tangible or intangible, advertising and marketing will only go so far. It's like the unsolicited spam-mail when you see who sells your email address (such as amazon, buy.com, anything really). Anytime you sign up for something with spamgourmet's toss away emails just watch how many places start sending mails identified as from them, etc etc.
Problem with advertising and marketing is there are no ethics in that industry, not even remotely; people will make a bag of shit sound like its a 24carat gold bag of benjamins if you pay em to do so.
Fast forward to 2008Q2. Searchenginewatch.com reports a dismal 3% rise of 2008Q2 compared to 2008Q1. The weak ad revenue from housing, automobile, and finance sectors are blamed, as is Google's recent efforts to focus on ad quality rather than ad quantity.
Back to the subject of this post. Putting revenue aside, quinthar.com's "analysis" is upside down. Raising the threshold of minimum bids leads to reduced revenue just as raising the minimum wage leads to reduced employment. All it does is redirect business that would otherwise take place to the black market or competitors. Google knows this; they are not greedily seeking short-term gains as quinthar.com accuses. On the contrary, there are other reasons to force minimum prices, and in the case of Google, Google wants to improve ad quality in order to improve or maintain its brand image and realize long-term gains (or at least sustainability).
The Internet is not a bubble, it's a juggernaut. It has changed the world, but it has taken much longer than was imagined during the dot-com era (but in hindsight, it's still fast). Newspapers are on their last breath. But that doesn't make the Internet immune from the general economy. That's the main reason for Google's slower growth rate.
Actually the average user freaks out and says "WOW YOU CAN DO THAT!" when I install privoxy on their PC and magically all the ad's are gone and websites load 25-60% faster.
It amazes them that it's possible and then they tell friends about it. I also get them to use Firefox with it, making them think it's a required component. Works great. A combo of FF and privoxy drops Pc infections drastically.
Do not look at laser with remaining good eye.
If the "Internet Economy" means advertisements, then the sooner it collapses the better.
Warren Buffett made all his money buying undervalued companies or (parts of companies via stocks) and then holding onto them as they reached their appropriate values. Note, he doesn't really sell most of the time. He holds onto things that are valuable, and whenever extra money comes from them he invests them either in what he already has to make them even more valuable, or acquires something else that would appreciate in value.
Note, I didn't say they would appreciate in price, though typically they would do that as well. But Buffett wouldn't buy something just because its price is going to go up if it was not reflective of its true value. Not that that's not a way that people can make money. It's just not a solid investment strategy.
Assuming Google is not overvalued, and in fact will continue to appreciate at a rate better than the market, Buffett would advise buying and holding onto it regardless of whether it gives dividends or its price falls. Dividends, to him, are only for when the company can't make better use of the money to increase its own value than the investors could if it were handed back to them.
Note, investing like this means that most of your wealth is not directly accessible as cash, as it's all tied up in investments, often investments that hold onto their money and reinvest. Not a recipe for a profligate lifestyle, but the surest means of building wealth.
Now as the parent mentions, the trick is in discerning value. Which is why Buffett avoids investing in industries he doesn't know well himself, and in particular avoids high tech. New technology's value is so unclear. Proven technology can be rock solid, but new tech's value is more often than not blown way out of proportion.
The ad market isn't based on demand, it's based on what people are willing to pay, and these, in this case, are fundamentally different things. Yes, in the context that the article writer talks about, 'Flash' is a trademark, but 'flash photography' isn't, but it's specious to say that people aren't bidding for ads because they can't afford them, and it's also sheer speculation to say that Google is pricing specific words out of the market. I wouldn't claim to be an expert, but I have been involved in Adwords campaigns, particularly in narrowly targeted areas, and it's obvious that there's a correlation between the validity of a search term, and that search term's value as Adword keywords. This plugs Adwords into the whole Pagerank system, which will ultimately value words in accordance with what people are searching for at the time. Real names also have a high value, and it may be that 'Flash' is regarded differently to 'flash'.
I have a client who sells garden furniture that is branded with the name of a popular UK TV gardening presenter. He's not the sole distributor, so he is in competition with other vendors selling those products, plus anything else that has the presenters' name on it. When we did the Adwords campaign he had just published another book and was appearing in a mainstream evening TV show, which ultimately lead to the minimum bid for using his name being set at £1.30 per impression. However, like any auction, this must have only been set because someone was willing to pay it in order to get their ads to the top and right ad bars on the first page of the search results. In that respect Adwords is essentially a mechanised trading system and there may be curbs and restraints, and I dare say the occasional artificial ceiling or trapdoor, to control excessive or combative bidding, but in theory, if you wanted to bid for 'Microsoft' to link it to a campaign for Linux, you would be bidding against anyone else who wanted to get 'Microsoft' into pole position, including Microsoft themselves, who have far more money to throw at ad impressions then you do (if they gave money to Google, but that's by the by). There probably are restraints within the system around using trademarks, which *probably* exist to prevent or limit messy and expensive lawsuits rather than pricing their availability out of the market.
So the question is, will the bubble burst? If advertisers don't get a good return for their costs, by converting click-throughs to sales, which is what Google Analytics is for, and if people stop clicking on ads, which is the key measure for Google, then advertisers will consider taking their ad budget somewhere else, and income will degrade, but it's not a linear progression, as while it fails in one market, it will rise in another, probably debt management solutions. Advertising doesn't stop in hard times, but it finds more creative ways of making a return for its money, which is an unscientific process at best, so as long as Google can provide visible returns for its customers, which is after all far better than paper or broadcast media can provide, it will survive.
The problem with a lot of people trying to sell online advertising, in my opinion, is that they think the best route to take is sheer volume. I completely disagree. Like several of the above posts, I've gotten tired of the only vaguely related advertising that appears on most websites, and thus have either mentally filtered it out or gone to ad blockers.
It's not advertising online that really bothers me, it's the undirected nature of most of it. I don't want to be flooded with flashy dancing heads and brightly colored blocks of pictures of things I have no interest in. If you want ads to be successful they need to speak to a specific audience. Google does try to do this but as the posters above mentioned, people tend to try to game the system a lot.
I personally think the business model needs to shift more toward an "approved advertiser" editorial type system. See for example, Penny Arcade. They've mentioned before they personally approve each ad displayed on their site. They won't advertise games they think are bad. And I believe they even asked their readership if it was ok to start displaying Flash ads instead of just still images before going ahead and doing it. In other words, they figured out what their audience wanted, and they deliver that. And in my personal experience it works. I've clicked through on far more Penny Arcade ads to check out a new game than I have on any other site.
Good websites deserve support. People need to get off their high horse and realize ads are a part of the web economy and a click is a small donation of time to support a quality website. I used to avoid clicking referall links within a website, and manually punch in the location in my address bar, as a way to protest the whole ad media concept. Not any longer, sometimes I go back to a site that provided me with info/product support and USE their link to earn them commission. (Obviously I'm not talking here about those god awful "FED CUTS RATES AGAIN" ads... But don't lump all ads together)
I totally understand how you can make money with them, but at the same time it just sort of blows my mind that non dividend paying stocks have no more intrinsic worth than baseball cards. I've had that occur to me every now and then for a long time, but I always figured that I was just missing some part of it because the world couldn't possibly be that insane.
From FTA:
[Web advertising is] only sustainable so long [as] Google enjoys near-monopoly status. Once that status is gone, then all keywords -- even the ones Google chooses to price out of the market -- become competitively priced...[which] means everybody that depends on AdWord revenue suddenly makes less.
No, when things get more competitive, it just means that the list of keywords which Google can afford to price out of the market will get shorter, not disappear altogether. The result will be a net increase in the number of adwords available at both Google and its competition, making the market larger, not smaller.
When Google gets some real competition, the smart advertiser will of course rent keywords wherever it is profitable to do so.
Hardly the end of the world as we know it.
"We receive as friendly that which agrees with, we resist with dislike that which opposes us" - Faraday
There is absolutely no bubble in the internet
Actually, we, as mammalians, are instinctively attracted to motion. So yes, they do need to animate ads if they want to attract our eyeballs despite our not wanting to pay attention.
Predict a crash, you will eventually be proven right.
Genesis 1:32 And God typed
The point of advertising is to increase brand familiarity so that consumers know who you are and what you sell. That way, when they need your product they remember you, look you up, and give you money. It is not supposed to be a spur of the moment incentive to generate instant demand and give you click-through-riches (except porn site advertising, but let's not go there).
TV and radio have worked that way for a long time. Some car ads exist only to give reassurance to people who have already purchased the vehicle.
Think of Apple, people buy their product on brand recognition and reputation, not clicking through some ad. The paradigm shift of the internet concerns ease of information delivery, not consumer demand.
There's so MUCH advertising on the web that we're basically running out of pages and places to put it. Everyone's chasing the same advertising dollars, and there IS a point where the advertisers are tapped out.
Nobody pays attention to sustained revenues, rather they are chasing exponential growth that eventually flattens out as businesses mature.
I meant that bad ads drive out good ads generally as ads, not in terms of Google rankings. Although you are quite right that Google tries to make its directory functions work well, the number of people trying to outgame Google is much greater than the number of people inside Google. This inevitably pushes the equilibrium over towards the gamers. It's like spam; no matter how good filters get, most of the world's emails are still spam.
From scarped cliff or quarried stone she cries "A thousand types are gone, I care for nothing, no not one."
Everybody always tries to look at this from the end-user / consumer perspective.
Companies don't want their ads pointing to people who aren't interested. In the old days of broadsheet and broadcast ads (emphasis on "broad") they couldn't tailor their ads to specific clients.
On the Internet they can. And want to.
How can they best go about it?
Ad networks like Lookery and Adsense need to do it better. And they will.
The Internet is so damn young. Everybody wants a quick fix.
The guy writes an article in a blog with some basic assumptions and then puts it on /. as if it's meant to be here. Sorry, maybe we should discuss the point of this post rather than the content.
"Violence is the last refuge of the competent, and, generally, the first refuge of the incompetent" - Thing_1
Google stock has some value, because it represents ownership of Google's assets, which is something like $11 billion in cash, $4 billion in property, and $8 billion in securities. Still, they will have to pay dividends if the stock prices stops climbing, just like Microsoft.
The animated ads are the ones that are causing most folks to look for ways to kill them. I have had more than 1 customer ask me "Do you have any way of getting rid of the 'shoot the blank and win an iPod' thing that comes up on my screen?" Ads like Google folks don't seem bothered by.It is those stupid hopping,jumping,irritating as hell flash ads that are driving folks nuts.
Hell,it has gotten to the point that I carry Portable Firefox with Adblock and Noscript because having to use IE when I made a housecall to fix a customers computer would drive me up the wall! And after they watch me for a few minutes and realize that I don't see all the stupid flash ads I always get "Excuse me,but can I have that too?". So the only one that advertisers can blame for this is the asshats that feel an ad doesn't work unless it slaps you about the head. And as always this is my 02c,YMMV
ACs don't waste your time replying, your posts are never seen by me.
It's not that people hate advertising itself. They don't.
People love the Geico ads with the duck. They loved the Budweiser ads with the frogs. They like ads for items they didn't know existed but could save them time/money/otherwise make their lives better.
What they hate is pushy, in your face, obnoxious, trite, boring ads that detract from the content. Nobody hates Google's text ads, for instance. Everybody hates weather.com's advertisers.
mcgrew's razor: Never attribute to stupidity that which can be explained by greedy self-interest
This post brought to you by Carlton Draught. Yes, Carlton Draught: Made From Beer.
do you all subconsciously blacklist items you see from an annoying advertisement (or any advertisement at all)? Classmates is at the top of my list.
"HE married HER!? And they have 7 kids!?"
A lot of people hate ads, I sure do...but the effectiveness with people like you and me comes not from showing the ad directly to us, but from the exposure the ad gets to the people we know who do not mind ads...which becomes purchasing on their behalf, then advocacy, then the word of mouth advertising that we actually do trust. The king need not trust the guy pushing the trojan horse, only the gatekeeper! That said, Bill Hicks had the best advice for marketers I've ever seen...
Getting relevant search results on Google in return of some ads showing up is still a pretty good deal to me. Imagine if you had to pay each time you google something... well... don`t even think about... never mind imagining it.
Start cherishing those static ads while they last .... the moment we work out how to put animations on paper cheaply, you'll be seeing animated adverts in magazines (and even worse, animated cereal packets).
Eeek.
Almost makes me wish that display technology wasn't progressing as fast as it is.
Ads offer very little measurable ROI. Their only effect is branding, the benefits of which can't be measured.
I've known this since 1998 when I built an ad server that measures actual ROI and we started taking customers and building statistics.
Actual conversions usually measured around .002% For a particularly compelling campaign that has something useful to offer, it can be higher.
It's the same as TV advertising. I can't believe people still don't understand this and it surprises them.
In the news: "Advertisers discover that >gasp 8 years later, banner ads still have little measurable ROI"
The concept that they might is broken. /shrug
You can't measure people that see an ad at work, then go home, surf straight to site and convert. This and a thousand other reasons are why you can't measure the value.
-Viz
Don't kid yourself. It's the size of the regexp AND how you use it that counts.
Here's an idea I'll toss out --haven't really thought it through, but maybe the rest of you Slashdotters can help me brainstorm.
End users pay one or more companies for Internet access to, and/or hosting of, their favourite web sites. An explicitly pre-determined amount of the money goes into a "pot" which is then divided among the content creators; the approportioning is determined by end-user voting.
For example, I might pay $20/mo to some Hosting Service A that hosts Ibiblio, Sourceforge and Slashdot. $2 goes to the hosting service, and $18 of this is actually to go to those web sites. This is the fee that is set by Hosting Service A. I can choose to split the $18 evenly, or vote that $10:$7:$1 goes to Ibiblio:Sourceforge:Slashdot, but I can't choose not to pay. Those web sites would compete for user votes to get money. Or maybe Hosting Service A includes Some Unwanted Website, like AnnoyingFlash.com, and then charges $50/mo instead. Then I might not want to pay the $50/mo, and I don't get access to Ibiblio, Sourceforge, or Slashdot. But then those web sites don't get my income, and they might decide to switch to Hosting Service B instead.
For this to succeed, there has to be enough competition so no one small group of ISP's or hosting services can corner the market.
Hmm... very unrefined idea. Any thoughts?
404555974007725459910684486621289147856453481154 in hex is "You sank my Battleship?"
[GPG key in journal]
"Mammals." The word is "mammals."
how long before it's ubiquitous when websites just start including banners, animated graphics, flash etc hosted on the same domain as the webpage. A transparent ad proxy so to speak to bypass the typical ad blockers or 3rd party websites. As hosting bandwidth keeps getting cheaper and blocker usage grows it will start.
I never click on embedded ads (the 3 or 4 times I did, it was on accident.) But I'm glad there are others out there who do hit them so all these free, web-based services continue to operate
Someone else wrote here on slashdot a very insightful comment concerning ads. A good ad does not need to be clicked. Compare an internet ad to say, a magazine, TV or (sadly) cinema ad. Those kinds of ads are engineered not to make you take an action at the moment you watch the ad, but just to remember the brand and certain specific snippets of information.
The problem with web ads is that the people designing the ads are approaching them in the wrong way, that is, they are designing ads with the objective of attracting people to a webpage. But a lot of time, once you are on that webpage you realize you really do not want anything from it (say, you click trying to kill the stupid flash bunny... after that you just close whatever window was opened).
There are a small number of web ads that do get the point somehow. I could see them while playing at Yahoo Games. There, you can see ads from McDonalds, Pepsi, Orange Mobile, etc. But those ads does not care if you click or not. They care that you *remember* that McDonalds is there, if you happen to be hungry. Similarly to what the ads in other media try to achieve.
Ubuntu is an African word meaning 'I can't configure Debian'
Sheesh... I can get better grief from my kids!
-- Many men would appreciate a woman's mind more if they could fondle it
The RepRap is a truly awesome piece of equipment. For those who are not able to expend the time or energy to check it out, I'll explain it here as briefly as I can. It's kinda like a 3D printer; It generates physical objects by extruding a polymer resin, based on a 3-dimensional model (think CAD/CAM). You can use it to make things, including making another one, and it's completely open source.
The free government project looks pretty neat, although I only gave it a quick once-over. I've bookmarked it for later perusal, when I have more time. Open-source governance is a great concept, I'm looking forward to seeing what becomes of it.
The idea of mesh networking is still in its infancy, but is another wonderful concept. Basically, it takes the idea of the internet, and rips off all the ugly wiring. This gives us a reliable, global, mobile structure of communication anywhere, everywhere, whenever. Imagine every electrical device being a wireless access point. The basic framework for supporting mesh networking was added to the linux kernel in the latest release, so this may actually have enough steam to start getting underway.
The surveillance state is already the here and now. Releasing that information to the public at large is the only way to make certain it is not abused, and I like where you were headed with that.
In short, sign me up.
This work is licensed under a Creative Commons Attribution 3.0 Unported License.
E-ink on magazine covers is coming VERY soon... Esquire has decided to put a flashing e-ink sign on their september issue.
It's a pity that the blogger has no idea what the hell he's talking about.
The fact is, if advertisers *weren't* getting a return on their advertising dollar with Google, they wouldn't be advertising with Google.
Not in my experience. Market forces seems to depend more and more on erratic criteria, that's just the beginning of the end of online advertising.
Take the Google case: They pay to publishers what they want, but still have severe problems!.
The whole ads economy is flawed, bots can act like persons, in fact there's no difference at all between casual visitors and random bots. If spam has virtually destroyed email, ad-clik-bots will terminate internet advertising.
What's in a sig?
If the price goes low enough, another company will buy a controlling stake and take over their revenue stream, thus it very much does have intrinsic worth.
Reading comprehension skills aren't your strong suit.
I don't need to "do it cheaper" — Google is doing it cheaper, as I described. Some keywords they set a $1.00 (or, as I noticed today, a $5.00) floor. Some keywords they have no floor. The cost (in terms of compute cycles, R&D, and overhead) is the same — it's just that for some, they'd rather have no ads. After all, for some of these keywords, it would appear nobody is paying the minimum, as no AdWords ads show up when you search on them.
Now, there are any number of reasons they could be doing this, and I seem to recall reading an article or two on the topic a few years back when the practice first emerged. I don't even care that they are doing it. However, saying that they set selective floors because of "cost" is utter nonsense, as anyone who has taken an accounting class will tell you. I'm not trying to change Google — I'm trying to leave a record, so those who read this thread later on actually have some information that might counter the nonsense you and others are spewing.
If it costs them $0.01 in incremental compute cycles/storage/bandwidth to display enough copies of an ad to get a click, and they lose out on a $0.25 click because of a price floor, that's $0.24 they could have had to offset all those fixed costs you mentioned. If they were blocking my ads because they didn't get a good enough click-through rate (so they don't make any incremental profit), that's perfectly understandable, but they're setting a price floor instead.
There are other economic reasons they have for doing what they're doing. Amortizing costs is not one of them, unless you think morons are at the helm at Google, and I for one sure don't.
Not really. I mean, I wouldn't complain if they scrapped those price floors, but I have no problem that they have these minimums — it just reduces the amount of business I do with them, that's all.
What I do want is for posts modded 4+ on /., like yours, to actually make business sense. But I'm a crazy dreamer that way...
The Busy Coder's Guide to Android Development
As someone who has access to stats about click through and displays, I can say that you're almost entirely wrong with regards to how many people block ads and don't click on them.
At first I was surprised as well, but really, the number of people who dislike ads enough to block them is very low. Popup windows are considered far more annoying.
The only times this would ever occur is because a lot of people are retarded when it comes to computers. The proof of how people hate it is that the minute you show them, the lightbulb goes off and they instantly refuse it. The only ones who accept it are those with the wool over their eyes in the first place.
This has been shown time and time and time again. People don't know how to make things that are worth your time, so they think some magic ad is going to get clicks. Google's cost per action was an example of showing when advertisements really work. I guess a lot of people don't realize there are plenty of website scanners that check things such as advertising links...lots of traffic comes that way.
Obviously you haven't seen the Head-On commercials, or the E-surance commercial with that annoying asswipe with a guitar, or anything with Billy Mays. And don't forget the mother-of-all annoying ass commercials, the debt consolidation commercial with the flatlining EKG that makes my dog bark every time. Holy shit, I watch way too much TV...
Death is life's great reward. R. Hoek
There. I said it for you.
Engineering is the art of compromise.
The original article was about ads on social networking sites, which have very low value. This has been discussed over on Search Engine Watch. Google AdWords has "exclusion lists", lists of sites where you don't want your ads to appear. If you have expensive per-click ads, adding MySpace and Facebook to the exclusion list cuts your ad cost without impacting revenue much. You don't want your ad for expensive watches or mortgage refinancing on MySpace; Google will make money from you, but you won't make money.
Remember, 10% of the users produce 50% of the clicks but don't buy much. That 10% seem to be heavy social networking site users. You can buy their clicks, but they don't buy your product. This is a huge money drain on advertisers. There's much discussion in advertiser forums like Search Engine Watch about what to do about this. Tools have been developed to help advertisers filter out the non-producing ad sites. Google was fighting this; their terms of service prohibit AdWords advertisers from exchanging ad performance data. But ways have been developed to do it anyway.
The result of this has been 1) the price of ads on social networking sites is very low, and 2) the ad quality on them is terrible. We track this with SiteTruth AdRater. If you install AdRater (a Firefox plug-in, requires Greasemonkey), a rating icon appears atop each Google ad. Try this on Myspace, and almost all the ads will come up with a red "do-not-enter" sign. Then try, say, Bloomberg, and you'll see plenty of legit companies. The contrast is striking.
Myspace ads seem to be mostly links to ad farms, bottom feeder dating services (one is telling me "Three of your friends have a crush on you", even though I'm not logged into Myspace), and similar junk. Myspace just did a site redesign, and there are far fewer Google ad slots than before. This probably reflects unsold inventory.
Traffic alone is not enough. The users have to buy. Advertisers have now figured this out.
"Excuse me, but can I have that too?"
And because it is Open Source, the answer is "Yes". :)
Now if only you could carry around a portable Virtual Machine Running Ubuntu that you could use to perform some quick and easy Windows fixing.
"Oh, this tool? Well, it's an operating system that I use it to fix Windows, because it doesn't have any of the flaws of Windows. But it does everything else that Windows can do too, with the mildly disappointing exception of letting you play most newer video games."
Support the 30 Hour Work Week!!!
Uh yes, most people do hate ads
Most people hate annoying ads. Few people object to informative, well-targeted ads that tell them about products they actually want. I hate annoying ads, but I bought something from a random ad on a random website just last week. It was an interesting product and the ad was well-targeted (science fiction themed t-shirts on a fantasy webcomic) and clever and unobtrusive. It was a very small vendor (one man shop) with a interesting product (I had to restrain myself from buying his entire line) which I probably would have never known about if not for Internet advertising.
The comic artist was happy because I clicked on his ad, the vendor/artist was happy because I bought his product, and I was happy because I got a kick-ass product. Seems like a win-win-win to me! :)
Frankly, I and almost everyone I know frequently goes looking specifically for ads, e.g., when I want take-out, I check the ads in the Yellow Pages. I do use flashblock and I usually turn off image animation, but I absolutely do not use adblock nor do I have any interest in doing so. As a result, I have much better t-shirts than you do! :p ;)
(And no, I'm not going to tell you the site. I have to put up with a lot of annoying ads to spot the few gems, and I see no reason why you should benefit from my suffering. If you're going to cop a pompous, arrogant, know-it-all attitude about how you're too good to be subjected to any ads ever, you're just going to have to live with the consequences.)
The problem is, the advertisers are making the ads more annoying. The people who don't hate ads now will start hating them when the advertisers make them jump around the screen playing bad music.
I don't have a problem with ads that are static, but *anything* that jumps around or flashes on any page immediately gets adblocked. No exceptions. Yes, there will be collateral damage if the path also contains other images.
thegodmovie.com - watch it
I like watching advertisements that are funnier than the program.
People love the Geico ads with the duck.
Geico is the gecko. Aflac is the duck.
</offtopic>
Reminded me of one of my favorite scenes from Scrubs:
J.D.: Okay, that's it. I-I-I'm sorry, Sean, I'm a doctor, okay? I-I'm teaching humans, not dolphins, okay? So it isn't really helpful for me to know what works on fish.
Sean: They're mammals, actually.
J.D.: Oh, well, Sean! Unfortunately for me, my interns aren't mammals!
Sean: J.D., they are
You assume that everyone hates advertising as much as you do and thus, in the future, the trend will extend to the extreme...
I know it is not scientific, but most people I talk to have cable, and a DVR that gets used for two primary reasons:
1. To time shift their viewing of shows.
2. To skip the advertisements - 99% of which are irrelevant to them.
Ad revenue is overvalued precisely because people are starting to find alternatives that allow them to skip the ads on the internet in a similar manner. As a result I think this will continue to trend down to near oblivion.
I think people will find creative ways to get around this before the internet reverts back to the way it was in 1988 - but that solution won't involve treating the internet as if it were a television (think two-way communication versus one-way advertising -- context to the conversation, instead of using a shotgun to catch flies).
Lodragan Draoidh
The more you explain it, the more I don't understand it. - Mark Twain
I'll say this slowly -- so you can understand it:
T H E I N T E R N E T I S N O T A T E L E V I S I O N !
People don't want distractions when they are using their computer for a given purpose (imagine a pop-up in HALO in the middle of a fire-fight..ARGGHHH!!).
You hit the nail on the head. I think if a site wants to be relevant in the future, they will need to be more selective about any adds they allow on their site; an add must be relevant to the content that is there and seen as useful to the users of the site.
Lodragan Draoidh
The more you explain it, the more I don't understand it. - Mark Twain
> never click on embedded ads (the 3 or 4 times I did, it was on accident.)
Everyone acts as though they live in a vacuum! Everyone bewlievs that they are truly inured to advertising. "Honda pissed me off so bad with their superbowl ads that I will never buy a car from them!" *harumph* But, multiply that rage by 10, 100, realistically 1,000 vendor ads and pretty soon you've forgotten how viscerally Honda irked you.
"Yeah, man, but I am different, I really do remember." Really? Think now, have you really stayed away from e-v-e-r-y seller that has ever ticked you off? Over time the brand name stays with you even when you can't stand it. Time heals all wounds. After all, you're not considering much less buying Acme Cars, Zenith Sneakers, generic condoms -- your mind automatically filters your gaze onto the familiar.
To your point. Till recently whenever I googled anything (with Adblock Plus/E.H.H. turned off permanently on Google) I avoided clicking on the ads as I thought it unfair to the vendor to make it pay when the 1st link typically was for that vendor. But lately, I decided, WTF, when I need a car and Audi, BMW, Honda, Toyota are so expensive that I should care to save them money, and at Google's expense? I now click the ad links with gusto! Google ads, as have been rightly attested to over the years, are useful.
Apropos to your point, I have only once made a purchase directly attributable to google's ads. Invariably, I Google my need or the vendor, visit site, research selections, choose selection, research prices, quality, etc. Only once was A transaction made same day, same session, same cookie. But I bought thanks to Google's ad. Google was the entry point, and the vector for my purchase. No doubt about it.
You are an anomaly, and frankly I don't believe that you are not influenced by ads in one form or another. For accordingly, you know all brands, in all fields, from the outset, and you need no guidance from a search ad? Right. You don't know infinite number of people in all fields of life to have an omniscient awareness.
As much as I bitch about intrusive ads when I examine my behavior I am aware that they are inescapably influential on my, your's (their's?) purchases, to one degree or another. Living in denial doesn't help you.
News to me! Oh wait... /me disables AdBlock Plus. There they are!
At long last, the moment I have awaited finally arrives!! This genie, my friends, will not go back into the bottle. As any evil genius will tell you, biding time is one of the strongest assets a maleficent mind can have, and I have been in my lair patiently waiting... rubbing my hands together and quietly chortling under my breath.
The fateful words have now been uttered, and can not be revok-ed, "Second Internet Economy Collapse".
Call it "Bust 2.0", "Two-Kaboom", "Bongo Buddy's Revenge" or whatever you like, but the magic words have been invoked and the shivers of fear now course through the living veins of our techno-neural networks. The venture capitalists have heard their death knell.
Once this teetering snowball has been nudged by the giant white rabbit, it cannot be pushed back up the hill by Sisyphus or any other mythic figure. The course has been set and I will sit atop my gnarled perch and cackle until the last dollar of speculative value has been drained from all of these startups and the last coil of wire has been stripped from behind the funky colored walls, and the last lava lamp has been drained of its mysterious comingling fluids, for this is the day of reckoning, the day I have been wating for.
This is the rise of the economic anti-christ. This is the second coming of Gozer. The Kraken has awoken, Cthulhu has materialized, the monster under your bed is nipping at your ankles! I can't say anything else right now other than, "Muhahahahaha!!"
This is some of the worst economic analysis I have ever read. Slashdotters should stick to what they are good at - stealing IP and rationalising it.
Oh come on I know you punched the monkey. Nobody does not punch the monkey.
Which is why when I give an older machine away and leave it a dual boot with the original Windows. If someone could come up with a free and easy way for the average home user to go "clicky clicky,next next next" with their older games it would be a whole lot easier for guys like me to switch folks over. As it is now,the only Linux boxes I give away are dedicated appliances like the Puppy Linux box I gave a local church which runs their mailing list and does the bookkeeping thanks to OO.o.
I even had a customer not too long ago bring in an old Celeron 366Mhz to get fixed and some RAM added. I thought for sure I'd be able to convert a machine THAT old,because surely he wasn't playing games on it,right? Wrong. He had an old Nvidia Riva 32Mb PCI card and had his machine loaded with Quake I&II,DOOM I&II,SOF I,etc,and was quite happy with it. So if someone could come up with a free and easy way(I tried Wine,and that ain't it. Folks don't know the CLI even exists,and on Windows most have never seen it) for folks to just stick in their games and go,then I could get a lot more folks onto Linux.
Even the girls,who I find are much less of the "power user" type and are willing to try new things,won't try Linux because of AoE I&II. For some reason AoE is like catnip to them and I have even gone so far as to make sure that I install the AoE demos on my Windows boxes because it is so much easier to sell to girls with it running.So even though I love my Xandros Business on my laptop and Linux would cut down on the constant stream of viruses I have to remove on a weekly basis from customers machines,until there is a way for them to just slip the cd for their favorite old game in and go "clicky clicky,next,next,next" and have it work,I'm afraid it is no sale. At least I have cut the infection rate way down thanks to FF & TB(and Kmeleon on Win9x) and I always give my customers a copy of OO.o if I don't see MS Office installed.Which is probably why I get so many referrals,but as always this is my 02c,YMMV
ACs don't waste your time replying, your posts are never seen by me.
And on cable no less, where people *pay* to see commercials in their entertainment.
Yes. What makes stock valuable is the expecation that at some point in the future, the company will pay out profits. That point in time can be deferred indefinitely, but the one thing that is clear is the following: the only way the shares of a company can be truly worthless is if it it certain that the company will never pay any profits.
Another factor that's important here is that stock normally also gives you a proportionate say in electing the board of the corporation, and that by electing a board that will pay dividends, the majority of shareholders can force the corporation's profits to be paid out.
Let's start a simple but uncommon case: imagine you personally hold a majority of the shares in a corporation. In this case, you quite simply have the power to have the company pay out a dividend whenever you want. As long the company does produce profits, your stock is of unquestionable, immediate value.
Of course, very few of us have controlling interests in a corporation; most shareholders are still minority shareholders. In that case, however, if anybody wants to accumulate enough stock in the company to force it to pay out undistributed profits, then those people must buy shares from folks like you, driving up the price of your shares. In effect, if the company has undistributed profits, and somebody wants to get their hands on those profits, they must buy the undistributed profits from you, because you own them.
The consequence, again, is that as long as the possibility exists that the company will pay out profits at some point in the future, the company's stock is valuable.
Are you adequate?
I just happened to read all the references (surprise!) and there are updates on the blog post from the author explaining how his theory doesn't hold. Could be nice to mention it on /.'s article.
http://dilbert.com/2010-12-13
I know it is not scientific, but most people I talk to have cable, and a DVR that gets used for two primary reasons:
1. To time shift their viewing of shows.
2. To skip the advertisements - 99% of which are irrelevant to them.
Apples and oranges. On TV the commercial interrupts the program. On web sites the advertising is integrated.
/. would be gone. Almost every site I can think of that I visit would be gone. Actually I can't even think of a site I visit frequently that doesn't have ads.
/. is a good example. What if /. started charging for access? How many people would be here? I like /. but I wouldn't be here if I had to pay.
It never ceases to amaze me how many people are so put off by advertising. If a person doesn't like a site because of ads, don't visit it. There are web sites I don't visit because of the ads. I have one in particular in mind. It has very good information, but the flashing, blinking, and movement reminds me of a 1960's acid light show. It must play heII on people who are light sensitive or light-triggered epileptics.
If someone uses an ad blocker its because they want information from that web site without the ads. Ok. Will those of you who use ad blockers pay for the information? I'm betting not. I tried a 'contribution' alternative on my site a couple years back. Less than 6 people a month (many months no one 'contributed' 6 would be a good month) would 'contribute' even though I was getting over 10,000 unique visitors and serving over 100k pages a day.
I have had a web site online since 1996. In 2003 I almost shut it down because I was against advertising. The site just cost me too much money and time. As I was ready to turn it off, someone finally convinced me to try Google's then young AdSense. I did and it has since been worth it to keep the site online. I get a lot of 'Thank You' emails from people who appreciate the site. It's a technical niche site.
I mention this because if all advertising on the internet was to go away tomorrow the internet would become a pretty small place.
If there was a way I could detect people using ad blockers on my web site I would block them or direct them to a page where they would have to pay to access the site in an ad free layout. If every web site did this, the people complaining about advertisements would find their information lifeline cut. I can just hear the screaming now. "Where did all the content go?"
Someone else wrote here on slashdot a very insightful comment concerning ads. A good ad does not need to be clicked. Compare an internet ad to say, a magazine, TV or (sadly) cinema ad. Those kinds of ads are engineered not to make you take an action at the moment you watch the ad, but just to remember the brand and certain specific snippets of information.
Excellent point. I sell some direct advertising spaces on my web site. I make it clear from the beginning - Nothing that flashes or distracts with movement, animated gifs have to be >0.01 transition and 8 seconds at 'stop' frames with a maximum of 5 loops. I point out I do not track click throughs, that all advertising is 'Presence' advertising. If you want people to see your ad and remember you later, OK, but if you're measurable is click through or completed sales after a click through, I'm not interested in selling the space to you because you'll be disappointed.
What you are seeing is the difference between "Brand Advertising" and "Direct Response Advertising". Usually, the company wishing to advertise doesn't have that much of a choice. If you are a small operation or have a targeted product range, direct response is normally the only approach that makes monetary sense. If you are a large company with wide product presence (ex:Coke), you can just push on your brand, since you don't have a single specific action you want the viewer to take; you want them to like and use your product over time. Brand advertising is usually paid by the impression, while for direct response, pay-per-click is now dominant. There are good and bad ads in both of these categories, and the best approach to take in each category is often quite different.
Yes, you are missing some part of it. I talked about the value of the company. I'll be a bit more thorough in my explanation.
The first thing that you have to understand is that with your share you own a part of the company. A share is an abstraction to be able to trade partial ownership of a company.
The value of a company is made up of solid things like the hardware they own and somewhat less solid things like the money they have in the bank and even more imaginary things like the profit they expect to make next year.
If you think about it carefully it makes a lot of sense to buy a business that is making good profit and shows no signs of decline for a little more than the value of the stuff they own now. Shares allow you to do just this with small parts of businesses that are to big to buy as a whole.
Of course there is a lot of uncertainty in this, and there is the possibility of being scammed. The basic idea however is sound and that is the foundation for the fact that shares are worth more than the paper they are printed on (figuratively speaking) ... sometimes. I don't know about baseball cards though, but I have the feeling that they have no intrinsic value other than the paper they are printed on (literally speaking).
Show a man some news, distract him for an hour. Show a man some mod points, distract him for the rest of his life.
I don't mind ads in yellow pages, because if I pick it up I'm actually wanting to be sold something. It's the rest of the time that bothers me. This recent New York Times article attempts to show how marketing can be a good thing (persuading people to wash their hands more often), but inadvertently proves the point that marketing really does have an effect on our habits.
One wonders what life would be like if advertising was only allowed in certain situations, like when you're actually searching for something. My guess is people would feel less need to buy stuff all the time - a very different but not necessarily unworkable economy.
I guess that shows that advertising is pretty ineffective, at least on me.
mcgrew's razor: Never attribute to stupidity that which can be explained by greedy self-interest
It's effective on you. Advertising is about brand recognition, which you nicely demonstrated by mentioning Geico and Budweiser. It doesn't matter if you got the mascot screwed up.
Wow, that's quite a rant. Exactly how did you construe "I never click on embedded ads" to mean "I am completely immune to the overt and subliminal effects of advertising"?
I hope it collapses for all the buy it for a dollar and sell it for 3 dollars assholes out there, like majorgeeks.com, who make a living off of others' hard work in shareware or freeware developers. Not only that, bur they are ripping off the idea behind CNET's download.com, and others that came far before them, and now trying to pass it off like the coke head Tibbetts and drunk McMahon that run it actually know something about this field and originated this type of site. I heard McMahon the boozer say that using a hosts file is slower than dns resolutions on a radio show they did and it failed fast! After him spouting outright lies and stupidity like that when anyone can see at least a 30-200 fold increase in using a hosts file with your favorite sites hardcoded into it for ip address to url resolutions clearly knows better, and when to update it if the site changes hosting providers which is seconds work with notepad.exe for pete's sake. Fakes and idiots never impressed me and the 2 fools that run that site are definitely that (drunks, coke heads, and outright fakes) making a living off of leeching off the good will and efforts of others that actually create their content for them. You're better off going to a big name like CNET because they will be there in the future, and if costs keep skyrocketing the way they are? I doubt majorgeeks.com will be.
Lumpy ....different subject...I have a question for you about your vertical turbine.....tex357