[golergka]

> Businesses still pay (and always have) the same % in advertising

That's completely false. A lot of small businesses (think housewifes selling cupcakes) were not viable before Google and especially Facebook/Instagram — they simply could not realistically find their consumers before internet advertising.

[ajsnigrutin]

They could always post an ad in a local newspaper. Many people read those things before the proliferation of internet.

[golergka]

They could also use a lot of other advertisement methods, which were much less cost-effective and make their businesses unprofitable overall.

[ajsnigrutin]

Most of those ads were free "back in my days" here.. you got a "postcard" in each of those magazines, and could post an ad (limited length, text only) for free... how do you thing people sold cars before the internet?

And yes, facebook is more cost effective, because people don't get paid for their data... if people got paid for viewing ads and having their data gathered (like they used to be, market research groups and all that), the cost would be a lot different.

[jasode]

>how do you thing people sold cars before the internet?

You're not following the particular context of your subthread and inadvertently moving the goalposts.

The side conversation you're replying to was niche businesses with niche customers e.g. gp's example of "small businesses (think housewifes selling cupcakes)"

Buying ad space in a local newspaper is a waste of money for _small_ businesses like that because the subset of readers interested in paying for homemade cupcakes is too tiny. There's a threshold where it's just not financially feasible to pay $$$ targeted at a general audience in the hopes of converting the subset of that audience into customer revenue.

On the other hand, cars are purchased by everybody and the profit margins are also higher to get a return-on-investment when spending for ads in local newspapers.

Mabye a better example than housewife cupcakes is the niche video educational content on Youtube that's supported by advertising. The niche videos from Animagraffs, Practical Engineering, etc with micro-audiences wouldn't be economically viable on traditional network tv or even PBS. It required the long-tail of the internet matching the marketplace of viewers + creators + advertisers.

[blooalien]

Ah, but back in the day the local newspapers had "classified ads" section (still do, I imagine, but probably wildly useless these days) which many folks read religiously seeking out those small niche business things and local deals and such, and placing a short little text ad there was often literal "pocket change" to run for a day or three.

[naravara]

There was a brief golden period where those housewives selling cupcakes had their moments in the sun. But at this point they're mostly outcompeted by AliExpress tier knock-offs of anything innovative they do or other VC backed would-be monopolists, like Grubhub and Yelp, outcompeting them for eyeballs with superior SEO and keyword targeting.

Almost none of the local restaurants near me even have their own websites anymore because they get no hits. Yelp, Google, and GrubHub/UberEats type sites have hollowed it all out.

[antisthenes]

Many successful small internet businesses actually arose from the era before internet advertising.

They simply took their product expertise and brought it online and expanded their reach to more customers through advertising.

As for housewives selling cupcakes - that business is just as not viable offline as it is online. It simply doesn't scale and shipment/delivery will eat your entire profit margin. It might make some beer/fun money, but it's not a business, it's a hobby.

[bigDinosaur]

Housewives never successfully sold cupcakes before Google, Facebook, and Instagram? Citation needed! I don't think that's obviously true.