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Ad Companies Love Google’s Ad Blocker, but Hate Apple’s Privacy Features (howtogeek.com)
177 points by artsandsci 8 months ago | hide | past | web | favorite | 142 comments



A good reminder that Google's customers are actually advertisers, whereas Apple's customers are the end-user.


(I'm a Googler, opinions are my own).

I'd say it's a lot more complicated than that.

If you are paying Google, you are definitely a customer. This would be anything from GSuite/cloud, Fi, Play store, Express, and many others. Google isn't just Ads, there are a lot of products and lot of teams that have different priorities and concerns.

Product teams here that you don't pay still care about their users. It's good to remember that there are still engineers behind these products. Many of them have similar opinions to those expressed on HN. When an unpopular decision is made, people are vocal with their concerns.


I absolutely believe that engineers and product teams do care about their users.

That said, I also completely believe that Executives at Google are driven by what drives the majority of Google's revenue, i.e. the people that pay them the most money, their customers, advertisers.

Engineers can have the best of intentions but what Google or any company, especially a publicly listed company beholden to their shareholders, ultimately ends up doing is what ultimately benefits their shareholders as decreed by their leadership.

I'm not saying you should trust any corporation to ultimately have your best interests at heart. I'm saying you should trust what is on their balance sheets to determine what values they will hold and protect when they decide their lobbying budgets in Washington, Brussels, etc. for the year. After that, you can vote with your wallet, time, attention, or whatever asset it is you hold that a given corporation covets.

So can you say with certainty that if I pay for GSuite that Google won't mine my hosted data/metadata or other information any more or less than someone that doesn't? Does Google only track my purchases in the Play Store to keep track of what I have in fact purchased as a good storefront would, and not to store it in a larger profile they've constructed of me or just sell the info on to a broker? I pay for YouTube Red, so does Google not use any information from my YouTube profile for advertising purposes on its other properties?


I can say with certainty that Google does not treat paying G Suite customer data the same as consumers'. It is not mined, it is not targeted, and it is not used in any way for advertising purposes.

I can say this as a former G Suite buyer who signed the contract & ToS, a current googler working with G Suite and Cloud resellers, and as someone who has been a part of Google's internal GDPR readiness programs.

I cannot address the rest of your questions authoritatively, but I don't particularly care about those, either, comparatively.


I can say with certainty that I see ads delivered by Google targeted to my search and browsing history while signed in to Google with my GSuite login.


you’ll note that in their statement at https://gsuite.google.com/learn-more/security/security-white... they explicitly refer to no advertising in the G Suite Core Services. those are defined here http://gsuite.google.com/terms/user_features.html. not listed in the G Suite Core Services is regular Google Search. so what they’re saying is is that none of the data you put in any G Suite Core Service like Gmail, Drive, Groups, Keep, Sites etc will ever be used to target you with ads.

however, anything they can get from your browsing habits via google.com search and other ways of tracking you via data you may expose from non-G Suite Core Services, are fair game.

i have been a personal and corporate admin of G Suite nee Google Apps for 5 years. i believe the policy is adhered to by Google through my own anecdotal use as user and engineer over many domains and companies. and i believe who claim they can prove Google is scanning paid G Suite account data and using it to target are not realising that non-cloudsearch ie regular google.com searches and everything connected to your G Suite profile based on those searches is what is getting you targeted.

not the use of G Suite.


This was a relatively recent (last couple yars) change, I’m guessing in part driven by pressure from their new enterprise sales push, due to the more vigilant regulated enterprises in US and enterprises in EU simply unable to purchase services due to Google’s data access and use being so pervasive it violated regulations.

It is not clear to me from papers up through, say, 2016, whether you’ve achieved a guaranteed (compliant by technical architecture rather than by policy) level of access and data separation. Direct conversations had also made it clear it was not yet achieved.

You mentioned GDPR which indeed should require you to have to do the right thing soon, but it allows policy vs. technical controls. Bad actors don’t care about your policy, and good actors make inadvertent errors.

I’d like to know if/how the tech under the hood has changed o support the last couple years’ contract changes and upcoming EU compliance.

If anyone can point me to more recent papers or talks that evidence how it’s now impossible for, say, even a motivated bad actor in support or bad actor in SRE teams to violate data policy, I’d appreciate it.

Even if you can only talk to me off he record, I’d appreciate it.


If you are under contract & NDA with us, you can get more detailed information. I'm not willing to speak more, even off the record.


Prior job, we were.

You guys were honest, not ready for our level. About right amount of time’s passed, helpful to learn progress? I’m at new job, still interested.

At this bank I don’t have paper with you, we’d have to do that. Mail in Profile.


Clarification on G Suite received and acknowledged! I am not someone who has signed the contract & ToS, and was prior to now, wary of doing so because it was attached to the Google name. I do thank you for taking the time to acknowledge and explain how Google treats G Suite internally.


It is not mined, it is not targeted, and it is not used in any way for advertising purposes.

(For the curious, this has been repeatedly disproven.)


This seems to say otherwise (?)

https://gsuite.google.com/learn-more/security/security-white...

Does it have exceptions somewhere / am I not reading close enough?


would you mind sharing further information?


Pretty sure GSuite data is basically separate from everything else, you'd have to look at the ToS for the details, but it's kept separate to keep corporate customers happy.

This leads to issues for anyone who has tried to use a Google account setup through GSuite for consumer apps where they basically don't work at all.


> ... [Corporate data is] kept separate to keep corporate customers happy.

Can you imagine the stupid amounts of lawsuits that could be generated if Google were in the habit of scanning business documents and reselling information about them to third parties? I know they have a ToS, but the aggregate legal departments of all their GSuite customers are preeeetty big.


The problem is, I've talked to the engineers who are proud of building this ad blocker despite it's obvious antitrust problems, and engineers who are proud of building AMP for email. Where is their moral compass when these are things they think are okay?

I want to believe the software engineers are good people, but how do I square that with the things they are not just making, but enthusiastically supporting?


When and where do you start ascribing morality to software engineering and deciding who are "good people" within that domain? Like any business, there are those of us that agree with their choices, and those of us that disagree with their choices. I can't fault them for taking pride in their work, even if I vehemently disagree with the result of it.


I can't fault them for taking pride in their work, even if I vehemently disagree with the result of it.

Then yes, you can. Your argument, applied broadly, has you applauding the pride of IBM engineers who developed systems to assist the Nazis in identifying people to slaughter. The idea that engineering exists apart from moral principle is absurd.


Quirks exception?


They have been most likely brainwashed by company culture. I had an argument with a friend working in ad tech abot blocking ads.


From Alphabet's 2017 Q4 10-k SEC filing, Item 1A "Risk Factors":

> We generate substantially all of our revenues from advertising, and reduced spending by advertisers or a loss of partners could harm our advertising business.

> We generated over 86% of total revenues from advertising in 2017. Many of our advertisers, companies that distribute our products and services, digital publishers, and content partners can terminate their contracts with us at any time. Those partners may not continue to do business with us if we do not create more value (such as increased numbers of users or customers, new sales leads, increased brand awareness, or more effective monetization) than their available alternatives. If we do not provide superior value or deliver advertisements efficiently and competitively, we could see a decrease in revenue and other adverse impacts to our business. In addition, expenditures by advertisers tend to be cyclical, reflecting overall economic conditions and budgeting and buying patterns. Adverse macroeconomic conditions can also have a material negative impact on user activity and the demand for advertising and cause our advertisers to reduce the amounts they spend on advertising, which could adversely affect our revenues and advertising business.

> New and existing technologies could block ads online, which would harm our business.

> Technologies have been developed that enable users to block the display of ads altogether and some providers of online services have integrated technologies that could potentially impair the core functionality of third-party digital advertising. Most of our Google revenues are derived from fees paid to us in connection with the display of ads online. As a result, such technologies and tools could adversely affect our operating results.


Anyone who has even the faintest notion that Alphabet (as a profit-driven corporation) cares about the users of its applications should, after reading this, have all those notions dispelled.


>>It's good to remember that there are still engineers behind these products.

Doesn't say much. Engineers are even behind ransomware products. You guys may need new justifications to feel good.


A) you're wrong. Google is still almost completely ads as far as profit is concerned. Still almost 97% of all profit Google takes. Google is ads, whether you like to think that or not.

B) Why should any of us care if there are human engineers doing human things behind any of this? Are you trying to throw a pity party here? "People are vocal about their concerns." That sounds like whole lot of, well, concerned people. Good for you. The occupy Wall Street clowns were also very concerned. And a minor irritation for a lot of people who were not the 1% but were just trying to get to work.

I honestly put about 0% of interest into people who say they are concerned about anything. If it's really that important to you, get off your ass and do something about it. Otherwise I really don't care. And here's the sad truth for you: no one cares about what people are concerned about. Not a single person. No one at Google, and no one anywhere else. No one. No one cares who is vocal about their concerns. Not us, and not the management at Google.

I walked away from the highest paying job of my career 6 months ago because I thought they were making bad decisions that damaged people's lives. I was vocal about the bad decisions before I quit. I was ignored. And that's all fine. I lived off savings for a while, and then I ran out and had to do odd jobs and even some manual labor to float me until I landed a new gig a couple weeks ago.

You can do that too. You don't have to do what I did and walk out of a meeting and not go back, but you can do this. If you really think that bad decisions are being made, the only meaningful way of making your voice heard is to not work there anymore.

Until people start doing that, literally no one cares about what you think or if you're concerned or voicing your opinions. The only things that matter are the product decisions your leadership team makes.

I suspect you are a sincere and caring person who doesn't like every choice that Google makes. That's wonderful. So do something meaningful about it. Stop making those things happen.


> If you are paying Google, you are definitely a customer.

You're a customer for a different product/service than the one under discussion. What does that change about the one that's under discussion? Nothing. They're different relationships that imply no in relation to each other.


It means that this statement: "Apple wants their customers to feel like someone has their back" might be applied to Google, too, to a more limited degree.


If you're Google's customer, why is it impossible to get customer support?

You're not Google's customer. You're just a product that they convinced to give them money in addition to what they get by leveraging your personal information to sell ads.


I was not aware being a customer is defined by availability of support.

You're a customer of X if you pay for goods/services from X. As customers, we're just not nearly as valuable as a big advertiser.


You're wrong, and you're conflating two unlike things.

1) If you are a consumer user taking advantage of free things, information about you has value to the provider. In this case, it has value to Google as an adtech company. But it's also true that Google historically has been very happy to provide free services to users for altruistic purposes, and continues to do so. This can lead to their early demise, but c'est la vie. How things are prioritized for development, much less scheduled for launch or deprecated at Google, are some of the most misunderstood processes/lore in tech.

2) If you are paying Google for product access, that is completely different and a) your data is not mined for advertising nor are ads displayed to you, and b) you have access to paid support.


What product does Google provide for altruistic purposes? Just because they haven’t figured out how to monetize something doesn’t mean it was made for altruistic purposes.


Maybe Project Zero. But it does provide security benefits to the whole world, including Google. It also provides good PR, but that generally be the case for any altruistic product.


Project shield?


Absl?


> You're wrong, and you're conflating two unlike things.

The problem is that you can be both of those things at the same time, it takes time and an understanding of legalese to untangle when you're a customer vs. when you're a product, and Google makes basically all of its money from surveillance. If you have multiple PREF cookies (product), will Google use G Suite (customer) info to merge those profiles?


If you are paying Google, you are definitely a customer.

In the exact same way that someone who pays Comcast for internet & television service is a customer, and continues to receive commercials, to have their behavior tracked and sold, and to have their privacy rights lobbied against.


>If you are paying Google, you are definitely a customer

The question is not if you're a customer, but if you're a customer that matters. By "matter", I mean respected and cared for as a singular entity.

When I worked for Oracle, I was told only 150-to-200 customers formed the lion's share of Oracle's revenue. Think three letter agencies, foreign governments, national banks, and the like.

The other tens-of-thousands of customers contributed to a smaller share of the pie and so they only mattered in aggregate.

Without crunching the numbers, I'd say that Google probably operates on the same, if hidebound, business logic.


I suspect that its slightly different. Remember that Google uses a second-price auction for AdWords. The interesting thing about second price auctions is that you need auction density to be high to ensure that revenue is made, which means that Google have an incentive to get all of their customers trying to spend more, even if they are small they can still push up the prices for the advertisers with loads of money.

Additionally, if I were Google I would care a lot more about the millions of small advertisers as they represent a much safer way to make billions of dollars (less support required and you are less beholden to a small number of agencies/advertisers who would tend to be difficult to deal with).


Fwiw, I believe you personally, but that doesn't change the top down funding, attention, direction, etc that actually shapes up your ability to treat us like customers. I see Googlers try and share the same message you do. We aren't questioning your intentions, but you can only work with what you're given.

For example, I believe the AMP team, at a low level, thinks they are doing a good thing. Their leadership, however, is pulling the strings. Kinda wish the team was more aware of how they are being manipulated.


Also, if you need an example closer to home, I'm interested in Google AppMaker. But, nobody will engage me unless I move from the $5/user/month plan to the $10/user/month plan first. That's definitely NOT how other vendors treat me. Literally, they won't answer questions unless I double my spend first. My reply was basically "fuck off".


Put another way: Google's users are the product. Apple's users are the customer.


Is there any doubt that Apple loves their products more than their customers?

This whole "you're the product" thing gets repeated over and over again with no thought or analysis. Being the product instead of the customer has plusses and minuses. Have you worked with a recruiter? You're definitely the product there: they're selling you to employers, who are their customers. I've dealt with recruiters both as the product (prospective employee) and the customer (employer). In general, I prefer to be the product, though neither is entirely comfortable.

By far the more important dynamic is are you a valuable product/customer. That's what gets you treated well. The answer to that for any mass-market company is "no."


It seems like you've put no thought or analysis into my comment. You assumed it was pejorative, which says more about your comment than it does mine. I love Google. I love Apple. We use loads of Google services at the startup I've founded (some of which we pay for). I am perfectly happy being the product. For the most part, I am happy to have my data monetized so that I can receive free services.

Nonetheless, it changes nothing. Google needs good services so that is has products to sell (i.e. users). Apple skips a step by creating things for which their customer is the user. It's a subtle difference, but it's worth discussing.


> It seems like you've put no thought or analysis into my comment

Wow, that's a strong statement. If anything, your inital comment reeks of thoughtless-soundbite-repetition - I also find that statement meaningless and annoying in most contexts. What is it supposed to prove? That Google cares less about its users than it cares about advertisers? Obviously a company needs to take care of its products, or it'll lose the customers too. In fact, most companies invest more in their products than they "invest" in their customers - arguably, as soon as they get a monopoly (or lock you into their ecosystem) they stop caring about you as a customer, at all - and start thinking how to extract more value from you (as opposed to "provide more value to you")

> It's a subtle difference, but it's worth discussing.

Well, discuss it, don't just state it as if it means something obvious.


> You're definitely the product there: they're selling you to employers, who are their customers. I've dealt with recruiters both as the product (prospective employee) and the customer (employer). In general, I prefer to be the product, though neither is entirely comfortable.

But there is a huge difference between recruiting for a factory employing 100'000 people (or in Googles case billions) or recruiting a more important person. I guess you were the latter.


Yes, that was in fact the last paragraph of my comment.


> This whole "you're the product" thing gets repeated over and over again with no thought or analysis.

Well, yeah, if there was any thought or analysis, people would say “supplier” not “product”.


I may very well be a product in many business relationships. Some of those relationships are more equitable than others. In some cases I can extract great value in my role as "product".

Another point - Apple has 100s of millions of customers, whereas Google has billions. Google literally has a 10x scaling problem, and correspondingly a far lower revenue per customer (or product as you like).

I love Google services, but I interact with them knowing I'm one of billions.


You can only support customers that generate revenue. The billions of customers only generate revenue by being mined for revenue whether thats analyzing their habits or their content for revenue. Or in the absence of that the billions of customers are loss leaders hoping to be upselled into a commercial product.

In any event there's no way that Google can provide the level of support that any company who's revenue is directly tied to the products that are purchased.

And it's obvious support is extremely expensive because companies that spend a lot on it give great support (like Apple) and companies that spend a little give very little or very limited support (like Google).


If you aren't paying for it, then you are the product.

Even still, apple is still collecting data on you. If their business ever suffers, they can still sell your data. Apple still owns your data even if they aren't currently selling it.


What data?


iPhone, iPad or apple app data. What you listen to on itunes. What you watch. Etc. They have to in order to tailor their services better, manage their infrastructure and of course plan for their future development.

Apple uses their data to make better product to sell to you. They don't sell their data to advertisers because they don't need to.

What is going to happen if iphones, ipads, etc don't sell as well?


That "etc" sure has to carry a lot of implications. For example, see their Maps data collection practices:

The data that Maps collects while you use the app — like search terms, navigation routing, and traffic information — is associated with random identifiers so it can’t be tied to your Apple ID.

Or Apple Pay:

When you use Apple Pay we don’t track what you’re buying, so we can’t build a purchase history to serve you ads.

Or Siri:

If you give your explicit consent, Apple can improve Siri and other intelligent features by analyzing how you use iCloud and the data from your account. Analysis happens only after the data has gone through privacy-enhancing techniques so that it cannot be associated with you or your account

Note the word "can't" that appears over and over. Yes Apple necessarily records some data, e.g. for streaming services. But broadly speaking, Apple couldn't sell the data to advertisers even if they chose to, because they don't have the data.


And we know they don't because they're hated by advertisers. And the FBI evidently.


> What is going to happen if iphones, ipads, etc don't sell as well?

Given their track record on privacy, particularly using it as a selling point, they'd be poisoning the well pretty badly if they did this. It's more likely they'd burn through their cash before even thinking of selling user data.

I can't see it happening on Tim Cook's watch or any of the existing executive team, but maybe an external hire.


Then they'll only be able to share data as they agreed to with their Privacy Policy and User Agreements. So pre-change, they'll be able to do very little with your data, if any.


>A good reminder that Google's customers are actually advertisers, whereas Apple's customers are the end-user.

A good way to see this in action is to try to get end user technical support from both companies.

How does a user get assistance from a human being at Google when they have problems with their personal Gmail account, for example?

Apple gives it's customers the ability to walk into it's stores and get one on one help, or to talk to actual human beings in technical support over the telephone.


"If you're taking flack, you're over the target.


Good on Apple for allowing tracking cookies to be blocked, i'd next like to see them implement blocking of tracking scripts.

They are a nuisance to privacy as well as contributing to web bloat. I've seen sites with 20+ trackers each with their own javascript and all it takes is for one to be compromised for an XSS vector to be opened.


That's true, but this web bloat pays the bills. It is what brings you and billions of other people great services like maps, email, translate etc for free. Web without ads would not be the same as it is now and I'm not sure whether it would seem better to you


Honestly just charge for the services or take them offline I say. I want to pay for Facebook with money. I can’t.

I’d really like to see a complete attack - technical and legal - that goes even further than Apple’s on the current ad business model even if it means 90% of ad revenue disappears over night, and a similar fraction of “free” services do too.


People say this - but they rarely put their money where their mouth is.

History has shown time and time again that people are cheapskate. I know I'm guilty of this as well.

We like to signal that oh yes, we have money, and we'll pay. But then they seize up when they see the bill.

I subscribe to things like 1Password, Netflix, Hulu, Pocketsmith etc. If I sat down and added it all up, I assume it'd be several hundred a year. Even working in tech, I still sometimes think twice about paying for all these things.

How much would you pay for Facebook? $20 a month? $30 a month? $100?

I suspect you and I both have very little insight into how much it actually costs to run Facebook - but working for another internet giant, I can say it probably costs a lot more than the average layperson assumes.


> How much would you pay for Facebook? $20 a month? $30 a month? $100?

Not even Facebook thinks Facebook is worth that much a month from all of its users. ~2 billion times $20/month times 12m/y = $480B/year? You really think that's fair?

The problem is most web content is worth about $0.0002 a page or so. You can't pay that amount of money to anyone - microtransactions simply don't work in our economic system. Because most web content is so exceptionally worthless, the next best thing to do is make it all free and charge ad companies instead, and that's how we are where we are. That's why newspapers and magazines have died - the content they sell is worth less than the paper (and especially the ink) they print on now, so they have to fill their pages with more and more ads, furthering the content death spiral.

The market has proven time and again people will pay for quality over quantity - that's why Netflix hasn't died. The web is currently approaching Peak Content Quantity, and the ad companies (re Google) have never been richer because of it. And now that the technology exists to resist those ads, they're becoming crankier as they've gotten used to the status quo.

Hopefully sooner before later someone figures out an online content model that's paid and works. And I hope it's sooner, because the ad companies are becoming malicious now that they're packing in cryptominers and other malware to handler "ad blockers"...


I run a community site, with a lot of loyal long term users (most users check the site about 10 times a day and have been registered for years). My AWS bill is 15k per year, and the site earns 70k a year from a couple of advertisements.

Now, I also give users the option to pay per month to remove advertising and receive a number of additional perks for fun. However, only 100 of the 100k active users decide to do so, and that only brings in 5k a year in earnings.

In short, 15k in expenses, 70k from advertising, and 5k from users willing to pay money. So, if advertising fails I go from a 60k profit to a 10k loss per year, and the site would quickly close.


Uh?

_Only_ 5k a year in earnings?

100 users out of 100k is .1% (a ratio of 1,000)

If the other 99.9% of your users paid the same rate that'd be 5k x 1,000 = 5 million which is _way_ out of whack with what your advertisers think your site is worth which is 70k. You're overcharging your users by a substantial amount (a factor of approx 72 if my calculations are correct) so it's unsurprising only .1% have opened their wallets. The other 99.9% don't want to be fleeced by you.


There are a few things you need to keep in mind. Users that are willing to pay are typically from higher paying advertising regions, because those are areas where people have higher income. Therefore, I might generate $1 a year per user in advertising, but the average region where people are willing to pay is generating $3 per year.

That changes your calculation to a 24x increase.

Ok, then you need to realize only the most active users typically want to open their wallets. The users visiting 20x a day are going to pay before the people that visit a few times a week. So, if a paying user is typically 3x more active than a non-paying users, they're generating more advertising income.

That changes your calculation to an 8x increase.

Now, I should inform you users have 3 different payment options. All options remove advertising, but some users pay more because they want to support the site. So, users can actually pay 50% less than the average numbers I shared in the previous message, and still have advertising removed.

That changes your calculation to a 4x increase.

Ok, this is now looking more accurate, and I would agree the average user is probably paying 4x more than I earn from them in advertising. This is done on purpose to optimize earnings. If I lower payments by 4x so they're close to advertising rates, I'm not going to have 4x as many users sign-up. Even a 1 cent payment option will scare away 95% of people.

So, yes, I'm charging people more than they generate from advertising. If I charge them the same amount, then I would very likely have 150 instead of 100 paying users and see lower earnings. This doesn't influence my original message, and how advertising is the most important source of revenue for many sites. Without advertising there is no way I could cover my 15k in expenses, and no amount of fine tuning to my user payment system would get me to those numbers.


Are you just guessing or did you A/B test it to find out the optimal pricing structure that is also fair for the user?


Since s/he charges $50/year I think we all know that the answer is that s/he did no testing.

The option is probably more of just a cool way to foster community than to actually generate revenue/profit.


That's really interesting. But it seems like you're getting a lot _more_ money per-capita from the users who pay with money than the users who pay by looking at adverts.

I might be able to match an advertiser's bid, but I definitely can't afford a full-fat subscription to every site I frequent. Although it does sound very much like your site is more compelling for its community than most.


They pay one way or the other. The ad campaign cost is factored into the consumer price. In my eyes, this all comes down to convenience. If there would be a way to automatically deduct the small price for an impression from my account every time I visit a site, I would totally do that in order to avoid ads, crappy js, malware and all that shit. I don't even think it would cost that much.


Cool, thanks for sharing concrete numbers for the discussion!


No problem. I actually spent a couple of months working on the system for user payments. I had a number of discussions with the community and received thousands of comments with feedback and suggestions for what they wanted to see. I took everything into consideration, included the extra perks that people suggested, and made the payments work seamlessly with the site. The system is also advertised well throughout the community.

I'm saying this because I want people to know I gave the option a fair chance, and this isn't a random PayPal link I tucked into an obscure location.


People say this - but they rarely put their money where their mouth is.

Actually they do, but a majority of content is downright fecal. Netflix seems to manage to run subscription services, the NYT digital is doing very well, as are plenty of others. Some “services” though? You’re right, if asked to pay for them, most people would laugh and walk away. The Buzzfeeds of the world only exist because of advertising.

So to your point, I pay a few hundred a year for email, streaming services, news, journals, and so on. I wouldn’t use FB if they paid me though. Most social media is worse than free, and a move away from predatory practices and ads would kill them.

Good fucking riddance.


> I suspect you and I both have very little insight into how much it actually costs to run Facebook

Sure we do. They're a public company; they routinely publish this information, as required by law.

https://investor.fb.com/investor-news/press-release-details/... says that in 2017 it cost ~$20 billion to run Facebook (see the "Total costs and expenses" line in the "Year Ended December 31, 2017" column). In 2016 it cost ~$15 billion.

According to https://zephoria.com/top-15-valuable-facebook-statistics/ (other places seem to have similar numbers) Facebook has around 2 billion users, which works out to $10/user/year for 2017.

Now many of its users are in poor countries and may not be able to afford $10/year. If we just look at the US, Canada, and Europe, we see ~300 million users in Europe (same source) and about 180 million in the US+Canada, for about 480 million users total. That's $40/user/year, or $3.5/month.

At $10/month, Facebook revenue from just their US+Canada users would more than cover their expenses for 2017.

Now Facebook _does_ have a 50% profit margin in 2017. So if they wanted to keep their revenue, not their expenses, they would need to charge double teh above numbers. That brings us to the lowest number you cite: $20/month if they only charge in the US and Canada. Of course I would expect the number of users to drop a lot of they did that...


I appreciate the work you did to run those rough calculations.

Unfortunately, it completely ignores the most salient point. Empirically, most people seem to vastly prefer seeing the occasional (ideally targeted) advertisement, versus paying $20-40 a month of their own hard cash.

Hence, you cannot take total number of users, and divide by expenses. You can take maybe 1-2% (maybe less), and divide by expenses.

The actual conversion of these currently free users to paid users is what matters - and I doubt most people on Facebook would pony up.

For example, see the sibling post from Guest9812398 about his experiences running a popular community site - only 100 of the 100,000 users opted in to this, which doesn't even cover his hosting bills. The only way he can survive is through advertising.

The no ads model has been tried on the internet before, many a time - and the majority of people simply will not pay.


Oh, I think I agree that Facebook couldn't actually go to a fee-based model, for precisely the reason you describe. I just suspect that the revenue-optimizing number is still below $20/month for them. And even then they won't get enough conversions.


It's also nice to see how many of their engineers work on the product and how many of them work on ad targeting. I suspect that product layer is very thin compared to all ML plumbing behind it.


> But then they seize up when they see the bill.

But that's the thing. We do pay for it in a very non transparent way. It's very convenient to never see the bill, but imagine a situation where you actually were shown your "Facebook bill". You could see exactly every nugget of information about you, traded in the financing of your facebook account. How many would seize up? How many would leave the product? Perhaps a better question is: assume that users would be able to edit that bill - and say exactly what would be acceptable in terms of tracking/targeting/information sale. How much would people actually be paying after that? That's the "fair" price.

> I still sometimes think twice about paying for all these things.

I think we all do. But I still think I'd think twice about using Facebook too, if it was more transparent.

> How much would you pay for Facebook? $20 a month?

Around $5-10 per year I'd say.

Now: I'm not saying I believe Facebook could exist in their current form such a scheme with billions of users. But there could exist a Facebook that charged users $10 per year. Perhaps they would have 1/10th the number of users they have today, and 1/10 the number of services. And that's fine.

> I suspect you and I both have very little insight into how much it actually costs to run Facebook

Well we can only see the public numbers and extrapolate from there. The public figures are their total revenues, user numbers etc. So we have a vague guesstimation. But if users, employees and products were cut by 90%, the costs would likely be cut nearly proportionally. It's a lot of infrastructure costs.

I think my bottom line is this: I have no doubts that stricter laws and better technological defenses could and would kill many of these "internet giants". And it doesn't bother me one bit. We'll look back on the first decades of the internet as that time when we had "free" maps and "free" social networks, and I'm not so sure many will miss it.


It's not about being a cheapskate, it's about taking the path of least resistance. Why would you pay for something you can get """for free""" and faster?

I pay for the services I want because it's more convenient for me (I pay more than €60/month for online news alone, and self-host most of the services I use, which also cost me money). But yes, I use some ad-backed services with an adblocker, and if they went away I would just replace them with truly free services which are just slightly less convenient.


It only pays for the bills because publishers have said, "sure, put whatever tracking script you want on there, we don't care". And yet they have the power, because they have the eyeballs.

Look, nobody runs 30 second commercials in a loop for an hour at prime time, because the TV stations know it would chase viewers away forever. Publishers have to draw a line in the sand and hold it. Not likely, though. It took browser makers to kill pop up ads.


Ha wow I completely forgot about the days of pop-up ads that was such an intrusive nightmare.


I think it would be better.

People are willing to pay for good services, and hobbyists are willing to build systems and give them away for free. The Internet was around for a long time before advertising. It was also better in many ways. People built things because they wanted them to work well, not because they were tied to a profit center.

The more advertising has gotten into the web, the lower the signal-to-noise ratio has gotten.


Well, I remember the web before it was bloated with advertising. I think it was better. Geocities is life.


We need to develop AI that can detect and eliminate ads.

If Apple integrates this into their OS/hardware, then that would eliminate the incentive of tracking in the first place.


The nice thing about Apple products is that they are all the same. This means that fingerprinting probably doesn't really work as well as on other platforms.


Why should we, or Apple, care about how much money these ad companies are losing?


We absolutely should not. Advertising is almost pure rent-seeking; it's a horribly inefficient solution for the actual utility component it provides society.

I think this is one of those situations where an inferior mechanism has won (at least in this phase of history) because it disproportionately benefits power holders and platform operators.

Advertising is sanctioned manipulation and lying. It matches customers to products, but does so by focusing on lies, mind tricks and human hacks rather than desired customer outcome. It's broken at its core as a concept.


> Advertising is almost pure rent-seeking; it's a horribly inefficient solution for the actual utility component it provides society.

disagree. as much as it pains me to admit it, I do actually think advertising benefits society. imo it's kind of like democracy in that it's the least shitty system we've devised so far.

there's a lot about it that seems suboptimal, but what alternatives do we have? people can't be seriously expected to read third-party reviews for every single product they buy; it simply takes too much time. plus, depending on the product, there may not be any reputable reviewers, or the reviewers could be getting paid behind the scenes anyway.

ultimately it's a lot better to walk into the store at least knowing what the different brands are supposed to mean. if I go to whole foods, I can be pretty confident that the food will be better than what I can get at walmart. if I want the cheapest food, I can expect to find it at walmart. when a choice between products is of low-moderate importance, advertising/branding saves us a lot of research.


It would be nice if they just went back to before the whole "sell people a fantasy of what their life would be like with the product" but don't focus on the product at all.

I don't need an ad to know if my life will improve after buying something. Just tell me what the thing is and if its a good price and I want it I'll buy it. Leave the subliminal stuff out.


I agree. It's yet another instance of the continued rise of hyperbole in society.


People could simply buy less shit. Problem solved.


You could eliminate advertising altogether AND PEOPLE WOULD STILL BUY SHIT.

Only now products would have to compete on their own merit instead of billions in brainwashing. No more brand power.


Well, that's not what I said. "less" != "none".


That would be better for the environment. Unfortunately people buying less stuff would cause a recession. The economy moves because people buy stuff.


No, that’s the broken window fallacy. The economy moves because we invent more efficient ways to do things.

Buying and selling stuff we don’t need is not good for the economy.


Buying and selling stuff we don’t need is not good for the economy.

Is that true? It seems that the entire economy is based on people buying stuff they don't need.

Does anyone really "need" a 60 inch 4K HDTV? The average car costs $33K -- do people really need a $33K car, or could they get by on a $12K economy car? Do people need a 2500 sq ft luxury house, or could they get by on a 600 sq ft spartanly furnished shack?


If you ignore food, housing, healthcare, transportation, energy and the government & security sector, sure. But then you're ignoring most of the economy.


The majority of money spend on ads ends up with content creators, who, in turn, use it to produce the information their visitors value. It is therefore not "rent seeking" under any definition of the term.


Any cost required to be paid to a third party to conduct a transaction between two parties is "rent". Any entity attempting to establish or increase such a cost is "rent-seeking". Ad agencies try to encourage companies to buy more advertising. If they are successful, then other competitors will be forced to buy more advertising to maintain their existing customers. Whatever it cost before to have 5% of the market, it now costs more to maintain the same 5%. The additional advertising expenditure required because of the ad agency's actions is very much rent that was being seeked. The fact that the rent may not be paid to the same ad agency, or that ad agencies have costs themselves (such as content creators), does not change the nature of their actions.

Personally, I would like to live in a world where advertising was limited to industry/geographic-specific publications published by the government. A generic list of products, randomized once a day. Listings have a fixed fee and identical formats. Each listing has a description of the product, its price, and one or two photos. You can show people using the product but no faces. No other products/aspirational imagery/language unless it is required to demonstrate the use of the product. Plus curated confirmed reviews.

Or just a law that said that ad-supported business models were illegal. You can sell a product or a service but that's it. No "give it away for free and sell ads".


> geographic-specific publications published by the government

Sounds like product advertising under totalitarian regimes. It goes like: "Register to purchase the national car!” as if you had a choice. Sometimes the choice was between two equally crappy national products.

I don't have a solution to fix advertising, but government published ads are only going to fuel corruption. Maybe regulation of advertising would work, such as the EU's GDPR, maybe not. Government regulation is too slow to react to market challenges and there's always an agenda behind it.


I don't think the government would need (or even want) to limit the number of advertisers for a given product. Its more like the registry that contractors sign up to when they want government contracts. Here's me and here's what I can do.

Having the government control it would at least remove the profit motive behind the advertising service itself. A non-profit could potentially play the same role if having a government do so caused problems.


> The majority of money spend on ads ends up with content creators

Do you happen to have good data on this? I've been wondering how much ends up with various middlemen (including Google) and how much ends up with content creators.

To put numbers to this, according to https://www.statista.com/statistics/237974/online-advertisin... about $194 billion was spent on internet advertising in 2016. Google's revenue in 2016 (not all from ads, but mostly) was ~$89 billion according to https://www.statista.com/statistics/266206/googles-annual-gl... while Facebook's was ~$27 billion according to https://www.statista.com/statistics/277229/facebooks-annual-...

I did check a few other sources and https://investor.fb.com/investor-news/press-release-details/... gives about the same $27b number for Facebook and https://www.sec.gov/Archives/edgar/data/1652044/000165204418... lists ~$90b total revenues for Alphabet.

Cross-checking the advertising number is harder; I see numbers around $70b for 2016 from the IAB, but maybe those are US-only.

In any case, just the revenue for Facebook and Google is already 60% of the total ad spend if the numbers above are right. And that assumes there are no other middlemen. So I don't see how the content creators can be ending up with anything like a "majority" of the ad spend.


Sure - when you run ads on your own website with Google, you get 68% of the revenue share. (https://support.google.com/adsense/answer/180195?hl=en)

It's harder to say with forms of advertising like referral links, since many of those are negotiated directly between the website and someone like Amazon, but others go through middlemen that probably take 20-30%, as Google does for AdSense.

(source: I run ads, and have referral links, on the Pi Searcher for fun, and to pay the hosting bills. And some coffee money. I get paid by Google part-time, but this is based upon my experience as an ad hoster, nothing else.)

But remember that a lot of advertising out there is search advertising (google, bing, baidu, etc.). In which case, Google/Bing/etc. are the content creators -- their content is a search engine -- and they monetize it by advertising.


How is advertising different from anything else in the market? The product can have hidden flaws, short lifespan, etc.


It's not. Advertising is the result of imperfect, asymmetric markets. The person you replied to conflating dark patterns from bad actors to equal all of advertising.

If buyers had perfect knowledge of products/services, then they would instantly know what they were going to purchase. Seeing as they don't, there is demand for distributing market information for products/services to buyers. When there are substitute products/services, the demand is increased further.


Most professionally-produced content on the web is ad-fianced. Quality journalism, for example, is necessary for a functioning democracy. And no, bloggers and other hobbyist cannot replace The New York Times.

While (some) publishers may be able to survive behind a paywall, the average citizen is unlikely to subscribe to more than maybe one or two. Where currently they may get their news from dozens of independent outlets, they will inevitably be restricted to far less diverse set.

You can easily do the following experiment: try not visiting any websites that have advertising for a month or so. Almost by definition, this is will be a loss for you (because otherwise you would not visit any such sites now).

Now, some people will argue that all these creates should simply adopt some other business model. I think that's obviously foolish, considering the sizeable number of failed attempts. But if you believe that, say, half of all publishers can somehow pull it off, the question becomes: Is avoiding ads worth cutting the amount of professionally-produced content in half?

And, if you are wrong and 90%+ of newspapers, literary platforms, trade publications etc. actually die in the process: would we not lose something far more essential than what we gained?


Your response says nothing about the advertisers themselves, which is who the original question is being asked of. We have all heard this explanation countless times, and repeatedly the answer is NOT a nice analogy about how businesses I know and love absolutely must use advertising to survive.

The problem is with the advertisers, and the rotten business culture that has developed around that field. A culture of rent-seeking, as another comment alluded, that cares little for how much it may bother, annoy, rankle, fuck with, or otherwise manipulate the people it seeks to spread its message to.

And it truly is rotten culture: marketeers liken to these daily, unending intrusions as storytelling, and then they couch it in 'love' and 'empathy' not because the message actually contains or needs that, but because it affects viewers' emotional states in a way that makes them more suggestive to 'storytelling'. And this is to say nothing of all the other nefarious things we all know they do!

How can you possibly support such a rotten and corrupt collective of individuals and organizations? Today's marketing gospel/culture/practitioners are one of those things that not only needs the baby thrown out with the bathwater, but also the bathtub, the sink, the toilet -- and everything else 'digital advertising' may have touched.


It's not like I enjoy advertisement. But this description seems extremely hyperbolic.

It's a few images. Some of them move, which is annoying.

Rarely, they have sound, which is unacceptable.

There's apparently a lot of tracking going on in the background, yet I haven't seen any creepy personal ads, nor do I know of any effects outside of the ads themselves this tracking could have on my life.

People often mention security problems, and those may sometimes have occurred. Yet I haven't had any malware infection in 15 years+, and have never installed any antivirus software that didn't come with the OS.

If advertisement is nefariously "manipulating our emotions" I guess we're lucky in that they suck at it.

Personally, I'm far more annoyed by TV advertisement.

It's also nothing like "rent seeking", as I pointed out in a reply to that comment. "Rent seeking" doesn't just mean "economic activity I don't like".

I'm not denying that I would enjoy the world slightly more without ads, all other things being equal. But denying that there's something of a trade-off to be considered is simply intellectually dishonest.

And once you take stock of these competing interests, I believe there's a "bad case scenario" that is more likely than not to become reality, in which the loss far outweighs any gains.


Reductio ad absurdum.

"It's just a bullet obeying the laws of physics. The fact you die is of secondary importance."

See what I did there?


I'm not sure that diversity is what we should be striving for in our reporting. Right now, you can get 50 hot takes from a million different outlets. The vast majority are optimizing their headlines and writing for clicks. They manufacture outrage because it is what will bring people to their site. You can easily find an article to confirm whatever views you have on a particular news event. I'm not sure this is a good thing. There is nothing that requires a digital news outlet to have any journalistic integrity. There are plenty that have had stories thoroughly discredited but are still spread around on social media.

I'm not saying that centralized news is better. I don't remember much of that. I am saying that people have a very difficult time determining what is factual and what is not. Diversity in news may not be a good thing for democracy when we bombard people with information and options and tell them to sort it out.


It’s not possible to survive behind a paywall because the next site provides similar content “for free”. I think it’s hard to say how the competitive landscape in e.g news would look if ad revenue was drastically cut online.

If ads don’t pay the next site’s bills either, then sites would have to compete for paywall customers with quality. Even if a large fraction of news sites died I don’t see a big problem since the quality of the remaining outlets would be higher, and prices lower as more customers choose among more paid services. Clickbait would almost completely be a thing of the past, if there as no revenue in ads, for example.


> And no, bloggers and other hobbyist cannot replace The New York Times.

...because?


Because quality investigative journalism costs a whole lot of money and time and we need more of it.


At minimum, they probably aren't trained in journalistic integrity?


Looking at most of the popular ad-based news sites today, I'm not sure that I can say they are either.


Would you be more worried about whether a reporter was formally "trained" in journalistic integrity, or about whether their reporting was accurate?


The former helps ensure the latter (minus the quotes, of course)


If Apple user visits contribute less to the earnings of a certain class of websites (news sites, for example), then these could lose interest in the visitors and not optimize content for them. This could e.g. lead to websites breaking when visited by Safari.

I believe similar reasons led Firefox to formerly only offer their tracking protection feature in privacy browsing mode. Possibly their analytics showed that it turns out that most people don't activate that feature, so they now offer it in all modes. Privacy-conscious FF users in a way free-ride on the masses who use FF without knowing / caring about the feature.

It will probably go similar for Apple: They make the feature opt-in, most people don't care and leave it off, nobody gets hurt.


I like customized ads. All my life I hated advertising. It was really weird when I started my own business and started to get postcards for things related to my business and I found myself actually enjoying them. Furthermore, I don't get the aversion to tracking cookies. I just don't see a likely downside to it, though I've heard theoretical ones like what if the U.S. becomes a communist dictatorship some day.

That said, my targeted ads online still haven't nailed it. Half the time they're for something I just bought. Like, I just bought a watch on Amazon, so now on Facebook I see ads for watches for three weeks. Too late. (Of course the example is fake. Nobody buys watches anymore.) Anyway, half the time they're too late, the other half they're just too off the mark. For example, I'm thinking of moving. So I research apartments in that city. So Facebook shows me ads for apartments for the city I'm still in.

The best ads for me have been the ones based on AdSense -- that is, the text of the page that I'm on. I'm reading an article about how to use a hammer, and at the bottom is an ad for a hammer. No tracking cookies required, and yet a better match.


I wonder if all those ads that are shown too late show up in some marketing department's data analytics with really good conversion rates...


Not if you've already converted. Those are likely wasted impressions that drag down numbers, not improve them.

Often what can happen is you can have retargeting lists setup that populate automatically, but depending on how they are implemented, how frequently they are updated, etc., they may have set things up as exclusion lists properly (or even just removed people from the retargeting list). Likewise, that data may not carry over super well across devices in all cases.

This stuff can be a headache to setup and maintain, particularly at scale, and I think a lot of people don't realize the complexity of what is involved when they haven't done it themselves.


One of the arguments that ad companies employ to justify their tracking activities is that current ads are not customized enough. It goes like this: hey, do you remember the time when the ads we showed you were so obviously hilariously off the mark? We admit that this is a glaring failure on our part and we would very much like to correct it. To do it we need even more personal information from you! Only then we will be able to show you the ads that are ideally aligned to your interests and needs.

I'd say this is total bullshit. The incentives are just fundamentally misaligned. Perfectly customized ads will just perfectly employ your hidden biases to trick you into buying things you don't need.


Why would this be surprising? Apple has no skin in the advertising game, while it's the core of Google's income.


Advertisers are the core of Google's income. "Ad Companies" are to a large extent their competitors.


Well, they used to with iAd, but they basically axed it a while ago.


"Consumers love free content, hate micro-transactions and subscriptions."

It will will be interesting to see how this pans out away from LaLa Land where people work for free.

Personally I wouldn't be sad if a huge chunk of the internet content industry disappeared and we returned to the halcyon days of amateur bloggers. But many people being sold on the evils of advertising aren't fully understanding the economics of the market that provides their daily fix.


A bit overblown on the reaction to Apple's changes, but this article is generally true. I'd love to serve only high quality ads on high quality inventory. There is a ton of cheap, low quality impressions in the market right now. It can be difficult to /not/ buy these, and this is a step in the right direction. Right now there are 3rd party vendors that analyze sites and block sites with 3+ ads, or certain types of content, but they aren't terribly effective and often block high quality sites too.

My biggest challenge is blocking sites I know are absolute garbage but they use strategies to stop me from blocking them. Fucking topix.com / topix.net is really difficult to block because they constantly create new domains (topixstars.com, topixparenthood.com, etc) so blaclisting their domain isn't even effective.


Am I wrong to think that all of this is trying too little, too late? Why wouldn’t people just use an adblocker st this point? Everyone I know and care about gets them installed by me, and I’m sure that not unusual. Getting uBO is isn’t a technically challenging activity, and it works.

Am I missing the obvious again?


Google is hoping that this will discourage people from going to even the minimal effort to use an adblocker.

The next step will be to mildly then not-so-mildly burden effective adblockers on Chrome.


uBO seems to block ads well enough for me but not the tracking. I can easily see this by turning off uBO. What's a good way to block tracking within chrome?


uMatrix and a random user agent spoofer should do it.


> Why wouldn’t people just use an adblocker st this point?

Because once Google ships their built-in adblocker in Chrome, they plan to start putting up paywalls for users that are using other adblockers (but only on the sites where Chrome itself is not blocking ads). They've made this pretty clear in their communications about the whole thing if you read them carefully.


Can you show me where this is pretty clear? Not completely doubting you, but I am a bit skeptical that they would get into the cat-and-mouse game of ad blocker detection.


See the bit about "Funding Choices" at https://www.blog.google/topics/journalism-news/building-bett... and the documentation for that at https://support.google.com/fundingchoices/answer/7362965?hl=...

[Edit: I guess https://support.google.com/fundingchoices/answer/7074355?hl=... is a better toplevel summary of what "Funding Choices" is about.]


Google, first and foremost, is an advertising company. Their main business are ads and everything else revolves around creating products that attract users to use their services so they be monetized using their ad platform.

The whole purpose being Google's "ad blocker" is to protect their advertising business. They know that ads are starting to annoy a lot of people so they're going to ban worst offenders and try to stop users from installing an actual ad blocker that blocks all ads.

Apple is not an advertising company and they care about their end users and want them to buy their devices. Providing an unobtrusive and private browsing experience is what they care about.


I'm not a big fan of Apple, but this is one obvious side benefit to the company that writes your software being the one that sells you your hardware. User experience extend to more than just the feel of you keyboard.


I've always wondered how much a typical internet user generates in ad revenue. Basically, if I wanted to buy out my ads for a year, how much would it cost me?

I've never seen this number, and it seems highly relevant in the the debate over ad-supported services versus paywalls.


AVG PrivacyFix used to have a (probably biased and inaccurate but still) neat little tool that estimated how much you were worth to FB, Google, Twitter, etc after connecting your accounts. But I can't seem to find it anymore.


To be frank, Apple blocking 3rd party cookies really doesn't make that big of an impact. The Safari market share is small enough where it really doesn't matter, and there are already cookie-less tracking solutions in place that are more reliable than cookies anyways


Does this popup block plan include exit popups and email capture js boxes? If so, some specialized SaaS companies like Sumo could be out of business


Are they talking about PRISM privacy features? (IE: because the NSA doesn't let them tap into the data)


Another reminder that with Apple you are their customer. With Google you are their product.


Finally HTG! Love the website and it is a gem. (Not sponsored)




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