
Media Websites Battle Faltering Ad Revenue and Traffic - Jerry2
http://www.nytimes.com/2016/04/18/business/media-websites-battle-falteringad-revenue-and-traffic.html?_r=0
======
magicalist
Bad call on the HN title. The actual quote is

> _" In the first quarter of 2016, 85 cents of every new dollar spent in
> online advertising will go to Google or Facebook, said Brian Nowak, a Morgan
> Stanley analyst."_

emphasis on _new dollar_ , and in context appears to refer to their
advertising networks, not the companies themselves.

~~~
Animats
Right. That's one of those vague numbers; what's a "new dollar"? Increased
advertising spend over last year?

Here are somewhat harder numbers, from the Internet Advertising Bureau.[1] 72%
of ad spend goes to the top 10 players. The IAB doesn't break that down
further. Pew does, but their data is a year behind.[2]

Google and Facebook haven't quite curb-stomped everybody else yet. Together,
they have maybe half the online ad market.

The whole online advertising ecosystem, with supply side platforms, demand
side platforms, auctions, and all that is becoming irrelevant. Google and
Facebook sell direct and don't play in those systems.

[1] [http://www.iab.com/wp-
content/uploads/2015/10/IAB_Internet_A...](http://www.iab.com/wp-
content/uploads/2015/10/IAB_Internet_Advertising_Revenue_Report_HY_2015.pdf)
[2] [http://www.journalism.org/2015/04/29/digital-news-revenue-
fa...](http://www.journalism.org/2015/04/29/digital-news-revenue-fact-sheet/)

------
xbmcuser
The more sad part is people posting links from outside Facebook less. I have
always been against Facebook for the simple reason that it is a way to coral
the Web. And it is slowly but surely happening. Yes some people will hold out
for privacy or other reasons but I fear soon most will soon will move inside
Facebook and no longer be accessible outside it.

~~~
Johnny_Brahms
I am against facebook because I don't think we should entrust a company that
earns money by knowing everything about it's users with a substantial share of
human to human communications.

I think you have to be a special kind of crazy not to consider that a problem.

~~~
partiallypro
"I am against facebook because I don't think we should entrust a company that
earns money by knowing everything about it's users"

I would argue that Facebook has less personal data than Google. Facebook has
the data you might want public...Google has your worst secrets.

~~~
neogodless
I feel like there's no way they _aren 't_ working together and sharing that
information. I view mattresses on Amazon, and Facebook shows me mattress ads a
few minutes later. I post a link on Facebook, and everywhere I go, I see ads
related to that link.

~~~
partiallypro
Probably re-targeting pixels

------
fulldecent
Every dollar I spend with Google is painful because it is defending a brand
name or something else that I already rank first for.

Spending with Facebook is negative ROI for me. I get much better results
creating fake users and integrating into networks of people to send occasional
adverts.

~~~
roymurdock
The next generation of native advertising: we no longer have spambots, we have
real people as submarines as a service.

~~~
sgift
[https://en.wikipedia.org/wiki/Shill](https://en.wikipedia.org/wiki/Shill) I
don't see the difference.

------
impostervt
I recently tried out reddit ads and got a pretty good CTR with a CPC of $0.05,
which I think is pretty good (perhaps I'm just crazy naive, I'm not a
marketer). Have to find the right niche sub-reddit though.

~~~
shahidhussain
It's very good - limited volume though. CPCs are often efficient at low
volumes with good targeting.

------
peteretep
And yet I don't see a micropayments solution from either yet for when the ad-
pocalypse hits.

~~~
downandout
_> when the ad-pocalypse hits._

It won't hit. Most people just won't pay for content, but publishers have to
make money. If ad-blocker use continues to rise, everything will simply go
native. It means more clickbait article titles with even less thinly-veiled
ads masquerading as legitimate content.

The current native advertising model, where advertisers negotiate individually
with each site where they want content to be posted, will quickly evolve into
a more efficient AP-style network. Companies will submit articles into a feed
that will be disseminated to and automatically displayed on revenue and
content-hungry sites across the Internet. Sites will be compensated on a CPM
or CPC basis.

Ads are not going anywhere. They will just take a slightly different form.

~~~
belorn
Did everyone go to the native model when ad-pocalypse hit e-mail and everyone
started to use spam filters?

Current ad-blocks are similar to blacklists. They are very basic, but they do
get the vast majority of unsolicited advertisement, so it works. I remember
the days when some argued that you only needed to block chines IP ranges in
order to stop spam.

Then the world started to use content filtering, looking for specific words or
statistically pattern that provide a probability patter for spam vs ham. I
would predict that a AP-style network that automatically submit articles into
multiple "spammy" websites would automatically be flagged by anti-spam
organizations and thus be quickly blocked.

Native ads is also currently in a bit of a problem with tax and customer
protection laws. That might just be growing pains however.

~~~
downandout
_> Did everyone go to the native model when ad-pocalypse hit e-mail and
everyone started to use spam filters?_

Actually, yes. Everyone started creating opt-in email newsletters. The smarter
marketers started creating niche newsletters that appeared to not be
associated with any particular brand, then worked in mentions of their
benefactors everywhere they could. That's native advertising.

------
mrweasel
Is that honestly a surprise to anyone at this point? Sure Facebook I might not
fully understand, but at least it's highly targeted, even if it may not
generate revenue for the advertiser.

Most of the companies buying ads are in the business of sell "actual
products", which means that you need the catch the buyer when their in a
buying mood. There's little point in trying to peddle my goods on Mashable,
people simply aren't in the right mindset at that point.

Google on the other hand, that's where people go to find the sellers, reviews
and specifications. It makes a ton more sense to do your advertising in that
setting.

Sure ad blockers might be hurting the revenue of online media companies, but
that only because they've taken ads to such a ridicules extreme. It made no
sense to try to sell me a TV and lure me into online poker when I'm reading a
news article. It just contributed to my desire to kill of those ads.

~~~
azazqadir
In some cases, Facebook advertising has proven to be quite profitable. I know
some Pakistanis who have created pages to sell imported jewelries and other
similar stuff to Pakistani Facebook users. They run FB ad campaigns to promote
their products. Now, Pakistani market is lot different than US and other
countries. If its cheap and free delivery, people will buy it.

~~~
zappo2938
I think Facebook advertising is very effective. First, it is very targeted.
Yes, Zuck lets us use any information a person has on their profile to target
them. Oh, you work at the media company with 900 employees that I want to work
for, let me target each person who works there with an ad. They didn't think
that was funny or the comment I made when they made it clear they weren't
interested about how, although the number of women working at the company is
equal to the number of men, the men working their tended to be much older
meaning there was probably a serious wage gap. (I'm still looking for a job
BTW). To be fair I mentioned that it might not be their fault. It is possible
that instead of a bunch of young women between the ages of 18 and 35 being
hired at the company 10 or 15 years ago, young men were being hired who are
now in management. Whereas the increase in young women at the company will
lead to more women being in management in the next 15 years than men. (I
didn't really say that to them, but I thought it.) [1]

Facebook wants advertisers to show relevant ads to people so people with ads
that are shared, interacted with, and commented on, get a discount on the
price of that ad. Facebook would love it if the ads on peoples' profiles were
higher quality than friends' posts. A big reason people purchase GQ and Vogue
magazines is for the ads not just the editorial content. Also, taking the time
to target people who really care about a product or service makes it much
cheaper to sell ads on Facebook. If I wanted to promote a new Japanese
restaurant in a 20 mile radius from the restaurant, I'd create an audience of
people who liked the local Japanese garden. Who else cares about that
demographic? Nobody. So it's cheap.

I would not be surprised if one day people go to Facebook for the ads like
they do fashion magazines to find out all the new products and services that
they might be interested in to help them at work, at home, or at play.

[1] [http://i.imgur.com/bD8IpBV.png](http://i.imgur.com/bD8IpBV.png)

~~~
samdung
[https://medium.com/@COOLPHABETS/don-t-be-like-
mark-z-29a5eed...](https://medium.com/@COOLPHABETS/don-t-be-like-
mark-z-29a5eedc83a9)

~~~
zappo2938
Turns out that people who are interested in Hindi, Tamil, and Telugu languages
in the US and Canada are probably English speakers interested in a second or
third language. So their results are correct. Facebook Ads Manager is like any
other computer program. It does exact what you tell it to do. Rather than
selecting an audience of English speakers they might have had more success
selecting the ~45,000 people in the United States and Canada[1] who like the
largest Indian news website.[2]

Notice how the size of the audience is almost the same as the number of likes
of the page? My guess the reason why the audience is larger is because people
who have unliked the page after liking it are still included. Facebook ad
manager is very, very accurate at targeting only people who have liked a page,
for example, only people who liked the Candlebox band page or any information
people have put in their personal profile like having attended Stanford
University.

I've tested it. It is very accurate. I've made a post and targeted 300 people
who I know or interact with in real life. The post got close to 20 likes and
lots of comments but everyone interacting with it was in the audience I
selected. I've done a few other tests too and I always only get interaction
with people in the audience.

[1] [http://i.imgur.com/IdPAumb.png](http://i.imgur.com/IdPAumb.png)

[2] [http://i.imgur.com/7jb1MAE.png](http://i.imgur.com/7jb1MAE.png)

------
kaugesaar
Could anyone explain, what's a "new dollar" in this context? Is it those
$8.500 from company X that have increased their budget from $100.000 to
$110.000?

~~~
simonh
I read it as meaning new choices of where to spend the money. In other words
excluding spends that have already been contractually committed, but I suppose
it might mean growth in ad spending. In other words 85% of ad spend growth
will go that way.

------
pklausler
Perhaps also relevant: 2016 is an election year in the US.

Anecdotally, I've been seeing lots of political ads lately.

(Digression: I always click on the ads for candidates of the party that I
despise.)

~~~
thenomad
You might not want to do that.

Ad clicks cost, sometimes. But sometimes they send a positive quality signal
resulting in reduced costs to run that ad in the future.

(Or then again you might. Because you'll screw up their A/B testing stats. Or
you might not. Because if they have half a brain they'll be running conversion
testing anyway and they'll easily spot a high-CTR, low-CVR ad. Or...)

------
logicallee
In the first paragraph, ending:

>But in recent weeks, what had been a simmering worry among publishers has
turned into borderline panic.

the words "into borderline panic" are a link, but to the same article. Does
this mean that the author didn't write the link, but some editor added it, in
this case after the article was published? (And accidentally added a link
pointing to it.) Or, how can this happen?

I had always thought that the NYTimes authors added their own links as part of
their writing style. It would be interesting if instead this were a survival
tactic exposed at the top of this story...

------
surferbayarea
The advertising market needs to be made similar to the stock exchange. Current
situation is similar to the NYSE asking for a 85% commission on every stock
transaction. The middlemen need to be removed...An advertiser should have
direct access to the relevant consumer audience with a non-commercial
facilitator.

------
jussij
I don't know if things have improved.

But 10 years ago I spent $800-00 over six months on Google click adds that
seemed to do nothing but give $800-00 to Google.

To better understand where the money went I looked at my website logs any
found a lot of users spending less than a second on the site.

~~~
CaptSpify
Sorry, but what does "$800-00" mean? I get $800, but what does "-00"
represent?

~~~
Kratisto
Pretty sure they meant $800.00

------
Luyt
Forbes.com detects your adblocker and will deny you access to their content.
Except if you instruct your browser to use a UserAgent string like GoogleBot
does: then suddenly, you are can read the articles.

------
pc86
Actual title: Media Websites Battle Faltering Ad Revenue and Traffic

~~~
dang
Yes. Changed from "85 cents of every $1 spent in online advertising goes to
Google or Facebook". I'm not sure whether that was an earlier NYT title (they
do this), but if not, the submission violated the HN guidelines by rewriting a
title when it was neither linkbait nor misleading.

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xchip
The 15 remaining cents I guess are all the porn ads..

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kapauldo
And 50% of it is accidental clicks on mobile devices.

