[jaspertheghost]

At first glance, it seems very logical. Why do you need a middle man, these companies will all die out. The problem with this argument is that he doesn't realize advertising is 600B globally. Each of the small boxes there is 1b-40b depending the bucket (from tag management to mobile (100b)). When you realize that there's only 15 companies serving a 1 billion dollar market, you realize that it's not that small.

Granted. There will be companies that will die in the ecosystem, but the logic is poor. It's like saying why do you need a CRM system, it's just a tool standing between the sales person and the customer.

[fraserharris]

The HN community has an outspoken minority that believes: a) ads do not make money, b) ads do not work, and c) ads (targeting) are morally wrong. My sense is that the silent majority recognizes just how massive the advertising business is (its demand generation, nothing more complicated) and how important it can be to all types of businesses across every sector of the economy.

Global advertising spend (est. 2015): $592B

Global digital ad spend (est. 2015): $170B

Global VC investment (est. 2014): >$48B

[1] http://www.emarketer.com/Article/Advertisers-Will-Spend-Near...

[2] http://www.pwc.com/us/en/press-releases/2015/annual-venture-...

[tremon]

But isn't artifical demand generation exactly the problem? We already have growing problems with overconsumption, yet we're still told to keep buying more? The only thing your numbers show is that marketing is great at selling its own services, which should not be surprising.

Then (for me at least) there's the problem that almost all TV advertising is targeted at the more vulnerable groups in society: they invariably equate spending with a superficial emotional quality. I can't even remember the last time I've seen an ad that contained factual information.

And since consumer money can only be spent once, it's a zero sum game to me. I'd rather have people spending money on things they really need, instead of trying to fill an emotional hole created by advertising.

[fraserharris]

You are conflating the role of advertising in general vs specific kinds of advertising and consumption that you view as a waste. Our entire industry (tech) relies on advertising to boost awareness of our products. Is it overconsumption that I saw an ad yesterday for Load Impact & subsequently tested & paid for their (very cool!) service?

Overconsumption can be true on an individual level (person X did not need to buy Y). On an aggregate, consumption is "the economy" and advertising is the primary way of informing potential buyers about an offering.

[tremon]

It wasn't my intention to conflate, but I do consider advertising based on emotional appeal as harmful to society. I have no issues with content-based advertising, but that's not the norm in my experience.

I know that may very well be because of selection bias, in that the less egregious forms of advertising don't register with me (oh the ironing). For example, I actively search for reviews when buying new hardware. But the sad state of affairs is that it's very hard to find quality information between all the content-free fluff even though both are produced in the name of "advertising".

I disagree with your latter assertion though, that "consumption is the economy". To me, that's like saying "TV is society" or "the president is politics". The economy is much bigger than consumption, and I did not suggest that less advertising would lead to less consumption. At least that's what I meant with zero-sum game: it would just lead to different consumption.

[jacquesm]

> Is it overconsumption that I saw an ad yesterday for Load Impact & subsequently tested & paid for their (very cool!) service?

I don't know, but I do consider your comment to be an excellent example of an advertisement masquerading as content. (see: https://news.ycombinator.com/item?id=10573590 )

[fraserharris]

Masquerading? As long as its relevant and engaging, it is content.

[jacquesm]

If you should in the future ever wonder why people dislike advertising or marketing please go back and re-read this comment. I understand that right now you are not in a frame of mind to take that input but imo everything that is wrong with the advertising industry besides the tracking aspects is present in these 11 words.

[taurath]

Relevant yes, engaging fine, but is the outcome better? Being flooded with overly biased information is exhausting and not what is good for the outcome. If I am buying a GPU I want as unbiased a reviewer as possible to tell me all the upsides and downsides to each. Content that pretends it doesn't have a huge bias is lying, and it leads to poor personal decision making.

[tremon]

No, it is fluff, which is why I ignored that sentence. You did not provide any content about that service, other than the emotional qualifier that it is "very cool".

[shoo]

i'll go out on a limb and suggest that most things that consumers buy are things that they don't need to buy -- at least in my part of town.

i wonder how much of the world's economy is geared to providing consumers with things that they don't need? (this easily covers fashion + cars + travel + the latest gadgets + a lot of food)

i wonder how much of the world's economy is B2B style businesses geared towards assisting companies provide consumers with things they don't need? perhaps a fair bit?

i think one can argue that advertising makes "the economy" more efficient, perhaps.

one still has to answer the question of "is the economy a good thing?" -- i.e. efficiency in itself is not obviously a positive attribute - it isn't good to find increasingly efficient ways to carry out something that is a terrible idea.

it isn't obvious to me that the economy we find ourselves stuck inside is a particularly good thing (it doesn't seem particularly good at dealing with the problems that it causes).

[jacquesm]

Ads make an enormous amount of money, but ads are also (at least the online ones) undergoing a trend where the same amount of effort by advertiser, creatives and agencies leads to less and less user engagement and $ spent on product over time. More and more people are experiencing a disconnect with advertising and the advertising industry, rather than doing some introspection sees this is a technological thing that needs 'fixing' rather than as a basic problem with their approach. It will be interesting to see how they plan to fix this long term, for now it does not look - to me - as if they are on the right path, another focus group or user panel is not going to magically solve this. Until then the money is good.

[fraserharris]

Part of the explosion in ad-tech companies are alternative ad-formats and methods. The future lies in native ads - TripleLift (among others) is doing interesting things. You'll see more and more "sponsored stories". With Taboola/Outbrain, brands can create their own content (giving new life to agencies). We've experimented with embedding sponsored stories into digital properties (ex: a shoppable gift guide within a digital magazine's website).

[jacquesm]

> You'll see more and more "sponsored stories".

Great. /s

[sangnoir]

This is the industry reaction I expect from wide-spread ad-blocker usage.

There's a certain future-blindness that afflict us techies: in our fervent zeal, we think that the things we don't like (flash, ads, and flash ads) will be "killed soon": instead, they evolve into hardier, more insidious strains (HTML5/canvas ads, native ads).

[jacquesm]

Because advertisers have a god-given right to our attention. I got that long ago. Which is one of the reasons I worked hard to get them out of my life as much as possible. Those ads may not be 'killed soon' but they're 'killed for me' today and if it gets to the point where let's say even HN would be infested with advertising then I would simply move offline and read books again or something like that. My eyeballs are mine, and so is my brain.

[bittercynic]

Though they may not be "killed soon" it still seems worthwhile to take up the fight to help people protect their bandwidth, screen real estate, and mind. Just because it will be an ongoing fight doesn't mean you should just give up.

[TheLogothete]

Ads will die soon. Any day now. Doomed business model.

[anon1385]

The current claimed size of the market is irrelevant to the argument. The argument is that there is more money being made from advertising than actual advertisers are paying and that this isn't sustainable.

[mc7457]

If that's the argument, the writer needs to put up some numbers.

Here's an attempt at some numerical estimates: http://www.bloomberg.com/bw/articles/2014-03-03/advertisings... Spoiler: ad spending in the US has grown roughly proportional with the growth of the economy, no bubble in sight.

[jacquesm]

That's more or less impossible by definition. What isn't sustainable is that advertisers tend to see over time lower returns for an equal investment in ads and that this trend has been fairly steady ever since online advertising became a commodity. Each new technology sees an initial (sometimes huge) uptick in clickthrough/engagement/conversion and then after a short while (and ever shorter it seems) the initial uptick transforms into a reversion to the previous mean and a subsequent steady trend downward. It has been exactly this phenomenon that has driven ad-technology and targeting forward and it's the equivalent of turning up the volume on an amplifier because the people intended to listen are going deaf from the sound levels.