[samwillis]

From the point of view of someone who spent 10 years running an e-commerce store, and all its advertising, until a couple of years ago. Both SEO and search result ads on Google are dead. The hay day of being able to play the game and make a tidy profit is long gone.

Google are playing every trick in the book to extract every possible cent from advertisers, spying on their business and sales to maximise their own profits. Google's visibility of all transactions on every e-commerce website on the internet is insane. People complain about the tracking of users/visitors, but the tracking of businesses is just as bad.

They probably have better insights into the economy and market trends than most governments and banks.

The penny is dropping, advertisers are noticing, my long term expectation of Google's business are not what they were.

[1vuio0pswjnm7]

Even with all that data/information, Google still cannot find a more sustainable business model. Despite the countless number of sustinable businesses humanity has produced, so-called "tech" companies just cannot find one. These are not creative people. "We'll just keep on playing eavesdropping intermediary ("middleman") until we have undermined every business, every government and society along with it." Sounds great. Good luck.

[em500]

Advertising is in itself a sustainable business model, hovering around 1% of US GDP for the past century[1] (p.37 figure 3). Google really just needs to defend their position within the ad market to remain sustainable.

[1] https://www.bea.gov/index.php/system/files/papers/WP2017-9.p...

[Izikiel43]

That’s the case mostly for Twitter, meta and google that only/mainly live based on as revenue.

Amazon, Microsoft, Apple are more diversified.

[1vuio0pswjnm7]

With those companies, even with their non-data collection, non-advertising services business units, they continue to move more and more into personal data collection and advertising services.

[masklinn]

Of course they do, soulless investors see monetisation options and go “free money when?”

They don’t care about good name and long term viability. As far as they’re concerned they can just sell when the stock tanks.

[citizenpaul]

Id argue that advertising is am emergent side effect of money/commerce. Once you can produce goods for money you need people to be aware you are selling that product.

That being the case unless we stop using money their business is quite sustainable.

[hansvm]

Right now we have a push-based ad model with a low signal to noise ratio. People are force-fed garbage in the off chance that in a moment of weakness they might accidentally make a purchase not in their best interests. The mutually beneficial aspect of what you're describing (informing people of goods and services at some Pareto optimum which they would actually benefit from) could just as easily be satisfied with a pull-based model, and the low SNR is an artifact of letting de facto scammers pay for the privilege of scamming people.

[jklinger410]

> Both SEO and search result ads on Google are dead

And then

> Google's visibility of all transactions on every e-commerce website on the internet is insane.

Ah, so they have all of the information and yet their ad products don't work. They don't know this?

[drdaeman]

> They don't know this?

Of course they do, but people pay crazy money for this and it plays the important role in Google's market valuation, so it's in Google's best interests to continue chanting the Big Data Big Money mantra. It doesn't help that the myth/meme is strongly backed by the whole cyberpunk genre, as people love the dystopian themes of "big corporations know everything about you, down to your most secret desires you don't even realize yourself".

And it probably even work by some small but statistically significant margin, compared to some arbitrarily picked baseline, so they can even back this up if necessary.

The king is naked, though.

[nine_k]

If online ad campaigns did not bring sales, a lot of people would stop doing them. There are other advertisement media; there is organic-looking product placement, there is overt product placement and "influencers", etc.

Still, people buy a lot of AdWords and similar, and occasionally I see a relevant ad I click. BTW ads within Facebook are usually of much better quality (for me as a reader), likely because they can correlate.more sources inside FB.

[anon25783]

You occasionally click on "relevant" ads? I'm really curious why you would do that? Personally, I'll go out of my way to make sure that I don't buy anything referred to me by an ad, on the grounds that advertising is a vile and parasitic industry.

[nine_k]

I relatively often click on ads for new electronic musical instruments, even though I rarely buy them. These are just interesting things to see, some actually novel.

I sometimes click on ads about things related to IT and programming, if they mention something novel and important, just to be aware of the landscape, and what potential competition are pushing.

I see ads relatively rarely though, because I run uBlock Origin. So the ads I see are usually placed in context with some care, not just randomly tucked on to an unrelated webpage. Most of the ads are really poor, as I can see if I use an unprotected browser.

[jerrre]

Not OP but presumably they click a relevant ad because it is relevant...

[Sander_Marechal]

> If online ad campaigns did not bring sales, a lot of people would stop doing them.

I've done the math on this for a few small companies. I an thoroughly convinced that this is just not true for many companies. The vast amount of sales attributed to online ad campaigns are sales that a company would have gotten anyway even without the ads.

[jklinger410]

> The vast amount of sales attributed to online ad campaigns are sales that a company would have gotten anyway even without the ads.

This is a simple test. Turn off all of your ads for a year, compare against the previous. Write a blog post about it, destroy the industry.

[nine_k]

This has been done, in a way.

Some time in 1980s Coca-Cola decided that they have enough of an iconic status, and they don't need as much advertising on expensive large surfaces. They prudently lowered such advertisement a bit, and checked. Shockingly, they noticed a decline in sales. They reverted to the old policy.

[pcthrowaway]

If everyone in the world pays once for a product that doesn't work, you still get rich. They don't need repeat business, when they control they narrative. If they want to promote results touting the benefits of buying G-Ads, they can.

[derefr]

By "dead" the GP means "at the bottom of a race-to-the-bottom." People are paying $4 (to Google) per customer, to acquire customers with an LTV of $4, making them $0 per customer. That's the natural conclusion to competition under perfect information.

[samwillis]

Yes. This is what I'm saying.

[samwillis]

They appear to work just well enough to keep you hooked while they increasingly eat your margin.

[edmundsauto]

My 2 cents - in the past, there were bigger inefficiencies that advertisers could exploit. So they could buy a click for 10 cents, and profit 25 cents from it. Google has gotten better and closed that gap, so now you pay 15 cents (and due to increased competition, you might only profit 20 cents)

The opportunities are still there in local minima, places where it's too small for Google to optimize. But the trend is clear.

[jklinger410]

A perfectly optimized ad algorithm reflects the market, and offers little opportunity that isn't present in the business itself.

Costs go up because winners have been found. Like monopolies in capitalism.

[edmundsauto]

Naive question, but if a winner had been found in a given niche, wouldn't there not be as much bidding competition and thus costs would go down?

Concretely: if I am the only pie baker in the world (I won), who else would bid against me for "place to buy pie"?

My unsubstantiated hypothesis is that google has gotten better at cross-promoting - so they could target people who like cake, increasing the market and competition for bids, making prices go up.

[jklinger410]

Incumbents often maintain large budgets to ward off competition. Competition wins enough to keep bidding, etc. If America is not full of monopolies, the bidding environment stays liquid. There is also the threat of using literal brand name targeting, or conquesting, which encourages your competition to run their own ads to keep you out.

I believe there are some agreements for larger corporations to continue to promote things even if it is not necessary. People with funny money can treat ad markets like billboards.

Another fucked up aspect is that the government often runs ads to promote its own policies.

Much like real markets there is sometimes unnatural activity that keeps it moving.

[geysersam]

I've seen this narrative a lot in this thread. But if Googles ad-algorithm was actually good I'd expect to occasionally see useful ads. But Googles ad-algorithm is far from perfect. That's why people use reddit or other community aggregators to find useful products, the search engines just really suck at that task.

[jklinger410]

If you are like many of the commenters on here who is using adblockers and abstains from social networks, this is precisely why you see shitty ads.

Also if you aren't buying anything by clicking them, advertisers are ignoring you because you aren't a valuable user to them.

You are most likely reaping what you sew. Which shows that the ad networks are actually working.

[pixl97]

It's not good enough that Google makes massive amounts of money for each click, the market demands they make more per each click every day. Gotta chase that growth.

[dmvdoug]

Yes. Now the trick is to convince people that satisficing isn’t just laziness or somehow a road to business death.

[makeitdouble]

> their ad products don't work.

It works for them.

They might need to make it work a tad more for their customers if they had to, but right now they apparently don't.

[moneywoes]

What’s the best alternative for those adspend $$ in your view?

[npx13]

Similar background. Agree completely with your second paragraph.