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Ask HN: What is going on in the ad-tech market?

8 points by in_vestor ↗ HN
The NYT ran a story this week about deterioration ad quality.

It’s obvious to everyone here that services like google search, social media, and YouTube have had user experience vastly degraded in the hunt for ad revenue.

Apps and sites that should have long ago perished are able to linger on like ghosts, endangering user data (MySpace still exists).

And yet this earnings quarter, we learned that companies are doing better than we expected. Meta is growing its user base and google is increasing its clicks. Despite the wishes of the media, twitter is doing OK. Dilapidated app companies continue to raise funds.

What is going on? What would cause the ad-funded ecosystem to fundamentally change?

Looking for insight from people on the front lines.

16 comments

[ 2.1 ms ] story [ 88.0 ms ] thread
vmoore
> What would cause the ad-funded ecosystem to fundamentally change?

I don't have the stats, but AD blockers & tracking blockers are a real spanner in the works for AD-Tech. I imagine blocker popularity exponentially increases as each year passes, meaning at some point they will make a substantial dent in AD-supported sites who rely on income from ADs to stay online.

Google has so much data on people they can essentially read people's minds, so they are doing fine in regards to targeting people properly. They have a tight ship and it works (For now). Same for Facebook, although Apple's tracking opt-out apparently is hurting their business.

rpmw
I work in the industry and ad blockers are not a significant concern. It's a cat and mouse game for sure, but the vast vast majority of traffic is doing nothing to block ads.

I guess an immeasurable userbase's potential spend is hard to measure against total realized ad spend, but in my corner of the world traffic, users, and revenue are only increasing YoY.

s1k3s
Weird, when I worked in the industry, AdBlock was a "30% revenue loss" concern. Can you detail why that's no longer the case?
rpmw
Interesting, could be my particular market. I work mostly in the video space, not display. I imagine the media matters too--I'm involved with higher quality media owners.
in_vestor
Can you explain why YouTube ads seem so scammy and low quality? Or why I can watch two hours of Peacock and see the same car insurance commercial 10 times for the company I already use for my car insurance?

These are two examples of an unhealthy industry that, as you say, still seems content to burn money.

rpmw
YouTube I am not so sure, I have a feeling it has to do with how little sway the content owners have in the ads that play on their videos. If you are a big channel you may have enough of an audience that more traditional brands would like to reach but for most I imagine you take what you can get. Though I really am not sure how YouTube does things--they are one of the "walled gardens."

The same commercial 10 times in a row is an awful experience and most media owners try to avoid it, but depending on the content it could be the only ad bidding against you as a viewer. Generally there are frequency limits in place to avoid this from happening. On more mature platforms this tends to be the case. Sometimes it can't be avoided due to glitches, poor ad tech stack integrations, or greed, the owners would rather prioritize the cash over UX.

mejutoco
While not an ad-blocker, I want to add that updates to iOS privacy defaults were very present a 1-2 years ago in the marketing tech community.
jeffbee
How did you figure that Twitter is "doing OK"? Reports from this morning suggest they have lost two thirds of their revenue since October.
in_vestor
I mean the site hasn’t collapsed like everyone thought it would 2 months ago. But besides that, I would be astounded if they have actually lost 50%+ of revenue. Keep in mind that few people would actually know those financials, and they would be reluctant to share. Also, I’m no musk fanboy, but the level of hatred and doom mongering in the press right now is…weird, to say the least.
mejutoco
I mean, it is easier not to collapse with long periods of not being able to post. People were using the scheduled post-one-minute-later to be able to post anything at all.
red-iron-pine
> Keep in mind that few people would actually know those financials, and they would be reluctant to share

they're a publicly traded company, they are obligated by law to share financial information every quarter.

jeffbee
They were but now they aren't.
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tacosbane
ads are essentially noise. some high-nines number of ads have no effect. to counteract this, demand-side providers came up with ways to fake an effect to look valuable. they then discovered clients couldn't tell the difference between real or fake, or didn't care because the clients also want to say their ads worked. then the race to the bottom began: buy the absolute minimum quality for as little as you possibly can. that put pressure on the supply side because their revenues fell.

examples of faking: - the search "companyname" takes credit for "companyname.com" - "we promise we didn't show you the one positive result from running 1000 tests"

red-iron-pine
> It’s obvious to everyone here that services like google search, social media, and YouTube have had user experience vastly degraded in the hunt for ad revenue.

In a nutshell: capitalism gonna capitalism.

cm2012
Every comment here is wrong, which is typical for an advertising related thread on HN. Here's the actual reason:

1) Apple made a change last year (in ios 14.5) that neutered the ability for platforms to track results from mobile advertising.

2) This fucked ad targeting for pretty much everyone that relies on mobile web and apps (fb, tiktok, snap, etc)

3) Products that require good targeting to be profitable became harder to promote (like all b2b advertising, niche needs and hobbies ,etc) so more ads are ones that appeal to the average person, which means more teeth whitening strips, weight loss solutions, etc.