Couldn't agree more, the adtech is where the monopoly lies. I worked for a doubleclick / ads 360 competitor and it was so plain that Google used its dominant position not only to squash competitors like us but also to further obscure the auction mechanisms. Today it's a challenge to specify exactly what you want to bid for a given keyword, in part for the better since it dramatically reduces complexity for advertisers but it does remove a lot of the control and hands it back to... Google. Ultimately the auction is completely irrelevant since Google decides which ads will show and by extension whose ad money they'll pocket. In addition to that, Google charges premium for ad space even in non-competitive markets; I'm talking about what you end up paying for a top spot although there are no other actors in the auction for a particular keyword (even in broader matches). While one could argue that it's up to them as a publisher to decide what a spot is worth, this mechanism is completely obscure and you will only ever find out in hindsight through what you pay for the traffic.

> Google charges premium for ad space even in non-competitive markets; I'm talking about what you end up paying for a top spot although there are no other actors in the auction for a particular keyword (even in broader matches).

Google uses a Vickery Auction, in other words the top bid pays what the second bidder bid so while I agree with your greater point, this is not based in reality as stated.

They are actually first priced auctioned now

https://www.blog.google/products/admanager/simplifying-progr...

The post states that 90+% of google's auctions are still second priced:

> It’s important to note that our move to a single unified first price auction only impacts display and video inventory sold via Ad Manager. This change will have no impact on auctions for ads on Google Search, AdSense for Search, YouTube, and other Google properties, and advertisers using Google Ads or Display & Video 360 do not need to take any action.

yeah that's right, my mistake for not writing that. I only ever used their programmatic product

2nd price auctions have been dead for 2+ years due to header bidding. For anything in which Google has to compete against other SSPs or DSPs, I'd imagine it is the same. If Google owns the content, such that they are the single party SSP/DSP, and header bidding is not possible, then I suppose 2nd price could come in.

What is header bidding? I also thought Vickery auctions were still in use.

I think it’s a way for publishers to simultaneously auction the same bit of space in multiple exchanges. I guess that this means they have to use first price auctions, though I don’t have a super great idea as to why.

I wrote an article on the subject: https://michelenasti.com/2019/10/21/how-internet-ads-work.ht... You may find the answer in the last paragraph. Basically, the browser will ask multiple bidders for an ad, and then an auction is performed in the browser. The result of this first auction may be then sent to google to see if there's a better offer from them. It's called "header bidding" because... in origin.. this stuff was done in the <head> part of the page.

Thanks. That's a very well written article, I enjoyed learning from it.

The auction is performed in the browser? No wonder the web feels pokey these days.

I thought at first this must be due to the privacy requirements around cookies, only the browser can coordinate the different parties because none of them will be sent all the cookies needed to run a complete auction themselves. But it seems like it's really more some kind of hack around a limited (for business reasons) Google API.

Yes, I didn't express that correctly; I know about the second price auction and what I was referring to is that since Google does everything in their power to get you away from keyword level bidding and into their "smart bidding" solutions you have no _direct_ say in what the traffic costs (AFAIK it's still possible to use keyword level bidding but Google will email you very regularly to try to get you off). This fact is even more obvious in non-competitive markets as I was trying to point out.

I manage a decent size Google Adwords account. The Google adwords "strategist" they have call me is always pushing the Smart Bidding endlessly. So I try it on one campaign. Smart bidding increased the click cost from about $20 to $100. The one click converted but I get conversions on that campaign for about $60 so it was a disaster. Turned off that smart bidding and went back to my own eCpc bidding.

Same experience here... I even told them and they continue pushing.

Honestly, how would anyone ever know if Google does what they say they're doing? Is there any trusted third party auditing Google's ad auctions? If Google says $X was the price at auction, how would I ever dispute that?

How would anyone ever know that Facebook hasn't designed it's algorithms for spreading misinformation and disinformation? How would anyone ever know that Apple doesn't use your photos to train an AI? How would anyone ever know that the Amazon doesn't peek into your RDS database?

https://www.nytimes.com/interactive/2019/06/08/technology/yo...

>> Several current and former YouTube employees, who would speak only on the condition of anonymity because they had signed confidentiality agreements, said company leaders were obsessed with increasing engagement during those years.

>> One problem, according to several of the current and former YouTube employees, is that the A.I. tended to pigeonhole users into specific niches, recommending videos that were similar to ones they had already watched.

There are real human beings working on those systems. That's how everyone would know if Google does as it says

If something fishy indeed goes on in a large company, it must be on a need-to-know basis.

But the higher access you get, higher the penalties of sharing company secrets go.

Snowdens come into the picture every once in a while, but most average programmer Joes wouldn’t risk being internationally manhunted for whistleblowing questionable business practices.

So I do not think your argument is valid.

While it’s possible for companies to keep secrets, most companies lack the secrecy and paranoia required to really keep big secrets for long periods of time. These companies tend to leak, both because people move around a lot, and because unlike governments they lack the ability to throw leakers in jail.

If google was actually futzing about with the auctions like that, we’d probably find out eventually.

Snowden is running from the government, not from a corporation.

Google is a client of the Pinkertons, a very old union busting company with a history of brutal tactics [0]. One of their employees was recently charged in a murder during riots in Denver [1].

[0] https://newrepublic.com/article/147619/pinkertons-still-neve... [1] https://www.buzzfeednews.com/article/juliareinstein/security...

That is factually incorrect regarding the the classification of the aforementioned person as an employee of Pinkerton’s.

Pinkerton sub-contracted this person.

My apologies, thanks for correcting me.

It’s not really the same organization anymore; they got bought by Securitas in 1999.

Your comment is irresponsible. You're saying "I'm not saying it could happen here, but it could happen here"

Conversely, a corporate whistleblower at the level we're discussing is in for a payday from media/book deals, etc.

My statement isn't irresponsible. Corporations are universally amoral. If it was in Google's interests to do it, they would. But I think that, right now, those interests don't exist.

That being said, someone that is in that situation, if the stakes are high enough, might be dissuaded just knowing that such things happen.

People make decisions. At some point, all corporate decisions go through people.

Would you (reader) want to bet your life against a conference room full of people with $1M+ worth of stock options you're about to negatively impact? Where a bad outcome for you only requires their silence?

There are many people in the world who value morals over money. There are a few who value morals over lots of money. But that's not a bet I'd take.

Me neither. It's a very small likelihood, but I highly value my life. Just knowing about that possibility would chill me to the bone.

Facebook has designed its algorithms for spreading misinformation and disinformation, because emotion drives engagement.

>> Facebook has designed its algorithms for spreading misinformation and disinformation, because emotion drives engagement.

If emotion drives engagement, then this should apply to positive emotions as well. All emotional posts, positive or negative, will be treated equally by the algorithm according to your logic. Hence it follows, that facebook hasn't explicitly designed it's algorithms to spread only misinformation and disinformation, acc to your logic.

I would like to see some proof that would back up your statement.

Two points:

1. It doesn’t matter what the valence of the emotions are - positive or negative valence feedback loops will spread misinformation and disinformation. Positive emotion is not correlated with truth.

2. If you haven’t heard about this idea before, here is a starting point: https://www.nytimes.com/2019/12/05/opinion/digital-technolog...

>> Positive emotion is not correlated with truth.

I assumed from your previous comment(below) that you are correlating negative emotion with misinformation and disinformation. If that's not what you meant, then I guess I misunderstood what you meant by your previous comment

>> Facebook has designed its algorithms for spreading misinformation and disinformation, because emotion drives engagement

The easiest negative emotion to cause with a post is outrage, which goes nicely with fake news.

The easiest positive emotion to cause are at the result of puppies and wholesome/faith-in-humanity-restored posts, neither are generally related to actual truthful news.

I don’t see how that assumption is implied by anything I said in what you quoted. There is no reference to the valence of the emotion.

If emotion drives engagement and you optimize for engagement, then you will optimize for emotionally-charged posts over emotionally-neutral posts. If you then assume that emotionally-charged posts are more likely to be mis/dis-information, then you have a case.

I don't think this assumption is necessarily true for random misinformation (think common myths), but propaganda is usually designed to be emotionally charged, from PR to state propaganda.

The whole debate isn't even wrong in the first place as the questions are beyond "have you stopped beating your wife yet?" and into adding absurdities as qualifiers like "have you stopped beating your wife with a prized family heirloom yet?".

So bad it arguably qualifies as misinformation in itself. If an algorithim spreads any information and cannot classify it (if you have a general purpose algorithim which can know all truth apriori what are you doing here instead of creating a singularity!). Then /design/ which implies intent and effectiveness. Otherwise if I burn a Trump Voodoo doll I will have designed something with the "intent" to kill the President. Even if Fox News would be very offended by it nobody sane would take it as a serious assassination attempt.

That only makes sense if your voodoo doll didn’t actually kill the president. Facebook does spread misinformation.

As to intent - at some point in the distant past before it became clear what it’s effects were, you could argue that Facebook wasn’t designed to spread misinformation.

Once you know what a thing does and how it works, if you keep operating it, it is by design.

Hang on, you think there are individuals who can reason about how complex systems work with perfect certainty?

Heck, Thinking there are individuals who actually understand such a large system are complex.

Even at organizations orders of magnitude smaller than Facebook, it's pretty easy to have a few systems that are large enough you can only keep so many in your head at a time.

You'd probably need a few dozen of the right people together to begin to understand the complexity of their systems.

If you're truly paranoid, you can certainly encrypt data in RDS with keys that you have and Amazon doesn't.

But yes, the rest they expect us to take on faith. Or trust some boilerplate in their ToS (written by their lawyers, to absolve them of liability).

Yes, and you could do anything else that you want with your app. However, if your application is hosted on their servers you are just a traditional user from their perspective. And as the old adage goes, if you own the server, you own the user.

There is an implicit assumption, that the code that you push is actually the same one that is being run on the VM, in your statement. This brings me back to the point I was trying to make in the parent comment.

The encrypted traffic will be the traffic Amazon will be most interested in, since you took the trouble; they won't peek into the DB but they will be able to infer lots about what's going on if they want. It's the Tor Paradox.

I understand the line of reasoning above and would normally follow it - but Facebook, Apple and Google have all shown that they will do really shady things if they can get away with it. The reaction to Project Dragonfly was pretty nice to see, but you really have to wonder how many things like that make it through without any public outcry - I know real human beings and most of them are pretty awesome, some of them are sociopaths who'd do anything to make a buck though... we're gambling that some moral ones get into the decision making process and, tbh, if the sociopaths have their way the moral ones will remain blissfully ignorant of the shady stuff.

This is a pretty good point. I spoke to a developer from facebook once and they said essentially that there is nothing super secretive happening behind the curtains.

Yes they may be evil and doing all this bad stuff, but we pretty much know all the evil stuff they are doing publicly.

Or that Facebook developer just doesn't know about the super secretive happenings behind the curtains. If they did, they probably wouldn't talk about them. :)

Why would "a developer" have access to every company secret?

Does "a developer" know Facebook's long-term goals, its interim strategies, or details of its relationships with operations like Cambridge Analytica?

I suppose it boils down to buying a service at a price, and the “bidding” process is just a price discovery tool for Google, not the customer. Is there anything wrong with Google charging me double via an “internal bid bot” so long as the big cost is in line with my boundaries?

If I’m trying to buy a car off a showroom floor, and the salesman says “you better take this price, I got 4 more people lined up to buy it,” does it matter if those 4 others are not genuinely interested or even real at all? It’s a bit slimey if a sales tactic, but if you say “I’ll pay nothing more than X,” you’ve lost the negotiating position. If you tell google “I’ll pay $3cpc for this phrase”, well now they should be shopping that phrase with all its might.

At the end of it, google has a primary interest in keeping its adtech optimized in a bang-for-buck sense for consumers vs it’s earnings. If they get carried away with charging too much, customers will start just walking away without a purchase. Just like the car salesman.

Is there any 3rd party auditing what your business or your company is doing? I don't think that's the way business works in the USA unless you have a contract with a company that they can audit your services/products/etc. That's between two companies and not a public service.

Depends on what industry you're in. In the banking world, it's extremely common to have auditors, escrow firms, and government regulators keeping an eye on what you're getting up to.

yes auditing is pretty standard. Thats a big part of the big 4 accounting firms work, since they are preparing tax docs and verifying numbers, they need to peek below the hood. Also, insurance companies will audit their clients to be sure premiums match coverage.

Thanks to anti-trust actions both from the US and EU, we will find out.

"Ultimately the auction is completely irrelevant since Google decides which ads will show and by extension whose ad money they'll pocket."

And which Publishers will receive their share of the scraps.

Wherefore? FB and other such platforms are much better at display ads technology, as they don't care about user privacy at all. User tracking is the only real discriminator when it comes to display ads, where as search queries are very discriminating.

DuckDuckGo claim to make significantly less money per search than Google does, which seems to disprove that search queries are enough of a discriminator on their own.

Source: https://spreadprivacy.com/search-preference-menu-duckduckgo-...

Despite DuckDuckGo being robustly profitable since 2014, we have been priced out of this auction because we choose to not maximize our profits by exploiting our users. In practical terms, this means our commitment to privacy and a cleaner search experience translates into less money per search. This means we must bid less relative to other, profit-maximizing companies.

Could be that DuckDuckGo users just aren't good ad targets. The big thing separating them is "hates big corporations", I could easily see advertisement for big corporations not being a big hit for this crowd.

I'm a DDG user. I do not "hate big corporations". I may dislike some big corporations. I've enthusiastically worked for others.

I hate poverty, injustice, and bigotry. I cannot stir up strong feelings about an advertising company.

On the other hand I am a terrible advertising target, not wholly impervious to advertising but actively resistant, in part having seen under the bonnet of the sector and found little but a morass of grubby lies and folks with broken moral compasses. I intentionally interpret advertising as noise, not signal.

(corollary: attempts to disguise advertising are an irritant and a cognitive burden, so I allocate advertorials, content marketing, and drip-email compaigns to the Brand Damage circle of hell)

Maybe, but one big difference I notice between the two is that a search for <brand> on Google often has the top result as an ad for that brand, whereas on DDG it will be the same result but not an ad. It seems that brands don't have to “defend their turf” on DDG by buying ads on their own name as they do for Google.

I wonder if DuckDuckGo would be more successful if it was easier to find out how to advertise with them. Like, a link on the page that says "Advertise on Duck Duck Go." I've tried to advertise with them in the past a few times and gave up. I posted here before also, as I think Gabriel used to read the pages.

I use them for search as my default, and I would have used them for ads. I still might if they put a link there.

From what I've heard, DuckDuckGo sources its ads from Bing. I searched for "camera" on DuckDuckGo and the ad links have URLs that redirect to Bing, e.g. "https://duckduckgo.com/y.js?ad_provider=bingv7aa&u3=https://......".

Agreed, it took me far too long to find an answer to this.

Apparently you have to sign up for some Microsoft ad platform, and then select DDG as one of the places to show your ads.

Actually I don't believe you can place on DDG. You can only select "Bing, AOL, and Yahoo search syndication search partners"

Wow. So you're really advertising through Microsoft.

Hopefully someday DDG will have its own index.

There's a reason MS and Google have an index and DDG doesn't. It's expensive.

I would like to see data on Google's revenue distribution per user, guessing it would be very lopsided. Some users are clicking ads for 50%+ of their searches. DuckDuckGo users are different because they most likely at minimum know the difference between a search result and an ad.

There's no way that "some users" (implying a significant proportion) are clicking ads 50% of the time after they do a search. that would be a very rare duck indeed.

We've heard of this pattern:

1. Search Facebook login

2. Click first link

This user probably clicks a lot of ads.

I should certainly hope that DDG makes less per search than Google, since they are just repackaging a lot of google searches.

Bing.

Well yes they're getting "their" search data from Bing, but I meant how a lot of people seem to just use DDG to `!g [search]`.

`!g search` isn’t a repackaging - it just redirects you to google.com/search?q=search

Search queries are generally enough for ads, but DuckDuckGo only makes money on selling those ads, while Google also sells your person information connected to the search.

factually incorrect

This isn't true.

the Need Some Anonymity begs to differ

> the Need Some Anonymity begs to differ

I don't know what this means.

But Google doesn't sell data. They let you buy ads against people that match your data or requirements, and that's a pretty fundamental difference.

Yeah, I was trying to figure out how to say that Google further monetizes your search info without saying they sell your data, but gave up. It's still why Google makes more per search.

Still creepy. They still track user behaviour across sites to collate the data, so that they can put you into a neatly packaged silo for advertisers.

Need Some Anonymity == NSA == National Security Agency

But not sure what OP meant by that

Probably true, but antitrust law is based on consumer welfare. Let’s say Google uses monopoly power in the ad market to squeeze advertisers. It’s hard to translate that into direct harm to consumers.

That argument would either hinge on the cost of advertising being passed along to consumers. Very hard to prove. Or the higher cost decreasing the total amount of advertising, somehow harming consumers. Dubious when ad-free products are generally considered premium and desirable

> Probably true, but antitrust law is based on consumer welfare.

I don’t believe this is true. The law doesn’t set that criteria, but rather it’s a standard of interpretation known as the Chicago School. This was established far after, but is not law.

There’s a lot of debate on whether or not we should continue to maintain the standard.

https://www.law.uchicago.edu/news/reassessing-chicago-school...

Antitrust legislation was originally established to prevent monopoly power from giving a company influence that could challenge that of government and harm democracy.

It is an interpretation, but one explicitly endorsed by 30 years of Supreme Court precedent. Given the current composition of the court, it's unlikely that we'll ever see the consumer welfare standard overruled in our lifetime.

> Let’s say Google uses monopoly power in the ad market to squeeze advertisers. It’s hard to translate that into direct harm to consumers.

Almost as if what harms the ad industry is good for consumers ...

Also, "direct harm to consumers" is about the lowest bar you can set. It would be way more responsible to take some preventative action, before the harm to consumers occurs.

The consumers here are the advertisers.

I concur, I think this is when Google really jumped the shark. That said I believe it would be relatively easy to break up the company 1) office/mail/maps service as a pay to play 2) cloud service 3) search service. Obviously 1 would have to go to a rival ad platform or freemium to pay the bills, maybe also keep the "non search" ads platform. 2) and 3) should be able to pay for themselves 3) with related ads to the search.

Also 4) Android.

I suppose Android can make money from % take of sales. Obviously it works for apple :) . Maybe not 30% though

My read on this is they want to harp on the old "they're not showing conservative sites" theme again. Maybe I'm wrong.

Exactly, Doubleclick acquisition should not have been approved. I’m wondering if we still have that same approvers still “doing their job”

the level of understanding in government of how the Internet was shaping up way back then was really really low; I was around then and felt it was crazy but unless the regulators can understand and measure an industry, they won't every stop an acquisition like Doubleclick.