Also, I think you misrepresent Raganwald's point. I don't think he claims that economically a BBC ad would be better than an online game ad, he must be thinking along some other axis, along which it would rank higher.
I agree with raganwald on this. Sure search is immensely valuable, and sure, the things that internet use displaces were worse.
We're better off post-google than pre-google. But can't we improve on this? Is this how it's going to be in 100 years time?
[Thanks, Patrick]
However, if you want someone to bite - I will. Why bother engaging in moralizing if you don't care enough about your values to pay for them? Better yet, how much is your morality worth to you?
"I know that this engine is driven by the money, and the money is in luring people into Google's social thingamajiggy instead of trying to sell someone a book or a course or even a BBC/Discover/National Geographic edutainment special on dinosaurs or natural history.
But you know, the whole point of having values is that sometimes you don't do the most expedient thing or the most profitable thing or the easy thing. That’s what makes them values, you value them more then pecuniarum."
Well, if Raganwald wishes to educate children, why not create a service that serves educational ads instead of selling add slots to the highest bidder? Because it wouldn't be able to compete with Google outside of some tiny niche. Clearly, society as a whole is not willing to pay for this moral value, namely educating children.
It might be tempting to trivialize this by the way of "heartless businessmen" argument, but that would be misrepresenting the point. The point is - in a society where the only over-arching value is money, morality becomes a liability. One could argue that this is an inevitable state of human affairs due to $characteristic_of_human_nature. However, to me this seems to be more of an inevitable consequence of implementation of a universal means of exchange. Not everything boils down to money - true. But most things do. And most things will always be enough for some people. And the rest will ultimately have to follow. That, or find a clever way to monetize their "moral liabilities".
Disagree.
Anytime humans get ahold of a metric, they fuck it up and make it mean something it never did intend to mean. But, hey, animals did it, so we don't need to rise above that.
You're talking past each other.
Especially for former smokers who now no longer have any risk factors from smoking. A lung cancer diagnosis is a perfect "smoke 'em if ya gotta em" moment.
It's more whether it's tricking people to click rather than informing them.
Same way I felt tricked when I gave dustin curtis a kudos (vote up on his site) because he triggers it on roll over rather than a click.
I seem to remember you doing something along those lines on that teacher site. and personally I don't mind these things, it's after all just bits and bytes, but I can't help feeling there is a hidden agenda in your post.
Surely you can see that the aim of the site is not reflected in the way they try to make their money.
It shouldn't sadden us though. We have to protect our children from this crap, the best way is to not let them see it until they are old enough and then to teach then how to distinguish between information and bullshit from someone selling crap.
We can only go so far in asking others to protect our children and our elders, we have to step up to the plate also.
We still haven't figured out how to turn the tables on this and monetize our attention, it is extremely valuable, more so than we think.
really, how?
...which a multinational advertising company which occasionally produces industrial biproducts of advertising...
what?
...which generate non-trivial amounts of value for almost every human alive.
wat? Do you really believe this?
Advertising is not traditionally sold on a self-service basis. It is traditionally sold via Big Enterprise Sales processes, caricatured above as "steak dinners between advertising sales and ad buyers at big brands." This is enormously big business: ever bus ad, every TV ad, most newspaper ads, etc that you've ever seen was sold this way.
Google is the alternative model for advertising, and (as such) is overwhelmingly remnant inventory: that which we still have to sell after the Enterprise Ad Sales is over with. Google makes 97% of their revenues -- read their annual reports for how many billions of dollars that is -- through a) creation of remnant inventory (primarily on their search engine) and b) monetization of remnant inventory (2/3 on their own properties, 1/3 all over the public Internet).
Do you really believe this?
There is a little bit of exaggeration and understatement for comedic effect -- specifically, the words "biproduct" and "non-trivial." I absolutely believe, in my heart of hearts, that Google is primarily an advertising company which makes excellent use of technology, not a technology company which makes good use of advertising. That is easily the most controversial opinion about our industry that I have. I also think that Google has created more value for more people than probably any other company in history. I respect that you may think differently about either or both of these points.
I absolutely agree with that, and don't really see anything controversial in that statement.
I also think that Google has created more value for more people than probably any other company in history.
If they are in fact an advertising company (which we agree) then the value they have created has been extracted from more people than probably any other company in history.
Advertisers don't create value out of nothing, the value comes from distracting people and devaluing their browsing experience. Even traditional "big enterprise steak dinners" advertising companies have worked this way, selling 30 second TV spots and filling your mailbox with junk. Google is able to extract a lot more value than ever before only because the Internet contains so many users and so much content that they can do it in such tiny units that it pretty much goes unnoticed. (Until it passes someone's personal threshold for annoyance, and they write a blog post about it.)
My personal (selfish) opinion is that it is sad, and that the overabundance of advertising on the Internet has made it a worse-off place for me. My browsing is inefficient, and my search results are less relevant, and my time is ill spent (either scrolling past things I don't want to see, or waiting for pages to load, or actively installing ad blocking software). Yes, I know I'm being selfish. Still, I do see it as a necessary evil, and I don't see how things could be any other way.
The 'value' creation is the small web site owners. And they filled the money pot for that eco system with remnant advertising dollars.
I think it's great that small website owners can use AdSense to monetize what they do, but that really doesn't support the claim that "Google has created more value for more people than probably any other company in history."
Even if Google take more value from people than any other company, they can still provide a portion of that value to n other people, and assuming n is larger than any other company's n, Patrick's point still holds.
</pedant>
Also, it is not obvious how much much of Google's ad profit is extraction (via being the monopolistic intermediary running an auction) vs creating genuinely novel introductions between buyers and sellers.
Also, Google's value creation is not just in the money they pay to websites, it is also in their products (search, mail, etc)
They also give people free, massive, email accounts that has allowed many people to communicate, for free, with millions (billions?) of other people.
take a basic economics course. it's not a zero sum game.
This is an exaggeration of how this process works. Most ad sales for publishers runs through an RFP process that is managed mostly by agencies, not the brands. There are a ton of brands looking spend money in this way, but ultimately you have to have someone that is good at closing, as well as maximizing the value of your inventory.
This person, of course, is very difficult to find for a publisher of any size.
My point however, I wouldn't make the mistake of thinking the online ad sales business is a bunch of modern day Don Draper types... it's much, much less interesting.
The real question is, would content quality improve if we paid for it directly, instead of indirectly through ads?
It's not Google's fault that people want to play games any more than it's the sun's fault that it's shining outside of my window on days when I need to get real work done.
As usual it's easier to blame icons and officials in situations where really it's the consumers that drive these corporate decisions with their everyday decisions.
Granted, Google is showing self-serving ads that benefit it... but then again, maybe that site the opinion writer was reading is only possible because Google Adwords funds it. That part is a wash to me.
Sure, there's something sad in all this. It's sad that people want to play mindless games, watch sports, watch reality tv, etc. instead of learning and growing 99% of the time (or whatever) when given the choice. I don't really fault entertainers for providing the entertainment, though.
Yeah, a lot of people will choose a Big Mac over a salad, and a lot of people will scarf down fried chicken before a sandwich - that doesn't make their choices optimal, either for themselves or for society at large.
You're also discounting the enormous effect policy has. We've gone from a nation of chain-smokers to one where I don't have to walk through clouds of smoke to get from A to B, and this has largely been driven not by some phenomenal and accidental change in social norms, but by a concerted effort of government and individuals.
So it's not so much blaming Google, as to say that with Google's money, intelligence, and influence that we can be putting this "remnant inventory" to socially higher causes, rather than try to collect a pittance on it by hawking scams and get-rich-quick schemes.
What Google does is monetize the products of our school system, the school system produces mindless consumers incapable of producing on their own. Google connects these dependents of the state to the people who can produce the goods they need to live.
If you want to change what Google promotes simply transform the school system into an education system predicated upon critical and independent thought. By transforming the school system you'll have solved a whole host of social problems, the least of which will be ads hawking get rich quick schemes.
What hope does this world have when its best and brightest are content with swindling money out of the ill-informed?
What value is there in educating if one can simply purchase social capital when one needs it?
Exhibit A: http://www.facebook.com/BPTeamUSA
Exhibit B: http://www.altria.com/en/cms/Responsibility/investing-in-com...
Plenty of people pay rent and eat well and aren't complicit in scams and get-rich-quick schemes. Plenty of people have jobs that pay well and don't pander to the lowest common denominator and reinforce ignorance...
I am pointing out the fact that within a system of social organization which allows "material capital" to be easily convertible to "social capital" this type of behavior will always exist. Moreover, in most cases it will be a superior social/business strategy.
Consider a hypothetical example. Evil Company X can do a "socially harmful" thing Y and make Z dollars or a "socially beneficial" thing W and make V dollars. Well, if Z - [the cost of whitewashing] > V, why not do it?
Furthermore, should the CEO of ECX opt to do V and forego greater profits, investors of X would be well-justified to vote for his removal at the subsequent board meeting. After all, the CEO was not representing THEIR best interests...
Mostly everyone is a criminal, if you've gotten a city parking ticket you're a criminal.
If you've let your meter run out but didn't get caught it's still criminal. Didn't wear your seatbelt? Criminal.
Were you having a bad day but when you talked to the city clerk you told them it was going well? You're a criminal.
Altria sells a product that is harmful to people's health while providing other benefits, like most other products including car manufactures, coffee shops, etc.
Does Altria break a criminal statute? It's pretty much inevitable that they do.
Would I characterize them as a criminal enterprise? No.
Some people are far more concerned about living life than prolonging death. If you don't like cigarettes don't smoke.
Here: I'm a smoker. Do I know that smoking is terrible for me? Yes, absolutely. Is there any possible way to make a case that I'm "ill-informed" about the effects of tobacco? Not at all. And yet, I live with the fact that, every day, I choose to smoke tobacco. Yes, I'm addicted to it, and yes, I'm going to quit smoking it (because I know it's terrible for me), but... I'm not quitting today :)
In the same way it's not the drug dealers fault that people [who they actively sought to get addicted] want to buy drugs [in excesses that will most likely see them to an early grave].
Clearly you are responsible for taking my advice or not, but am I not also responsible for the choices I offer you?
What right or expectation do I have to assume that you're giving me good homework advice?
Are you a friend of mine? Am I relying upon my past experience?
If I'm not paying you, you're not a friend of mine, you're just some marketer paying sites to show your ads... I expect no real value from them.
I almost never click on Google Ads embedded in web pages, so I don't understand the blame game going on. Some suckers do click on them. They pay for free web content. Who am I do bite the hand that feeds us for free?
I'm reacting mostly to those two words since they have legal ramifications.
You tell me what you mean by "take responsibility", and I'll tell you whether or not I think that there should be a business or binding legal relationship before someone should be compelled to "take responsibility".
That's really a change of subject, though. You said "take responsibility". In our society today, "take responsibility" has connotations, mostly legal. Or the next line of reasoning is if people should "take responsibility", then the government should enforce it with laws and police action.
Yesterday, a married couple emailed me for advice on a condo that they're looking to purchase where I just bought one. I don't know them. I don't owe them anything. I don't even feel any social pressure since it's a vacation area and I likely will never meet or see them. However, I took about 30 minutes to write up a lot of details on what I had experienced in my purchase and gave them my best advice I had.
What I resent is someone telling me that I had some real "responsibility" to do so. I did it because I'm a friendly person and I wanted to. Not because I had someone else's tyrannical view of enforced egalitarianism.
My reasoning all ties back to Google. They have a responsibility to their shareholders. They have a responsibility to keep the contracts that they enter. Their responsibility to their shareholders might include showing useful dinosaur information in their AdWords to someone researching dinosaurs because they want to look clueful. They have no moral responsibility to do so. They have no legal responsibility to do so.
That's why I asked you. What do you mean by "take responsibility"?
Google ads stink? Turn on kiosk mode and load wikipedia before letting your kid on the computer. Or just download some quality content and unplug the network cable, which is probably the best idea anyway.
The Roman satirist Jeuvanal complained (in 100 CE) that modern people only cared for "bread and circuses" http://en.wikipedia.org/wiki/Bread_and_Circuses
That things then swung back upward again is cold comfort to the ancient Romans and does not demonstrate that things could not swing downward for our civilization.
2B) Purchasing intent for a commodity item where the inventory seller can extract a high percentage of the profit.
Apple isn't going to bid up the price of an ad that erodes their profit too much because, at the end of the day, they're the only source of iPhones.
Your local florist will compete against the guy across the street to buy that add even if nearly all the profit goes away because he can't easily differentiate his product.
Inventory (advertiser speak for "a page view plus a slot available on that page which we could sell an ad against") are a lot like cuts of meat. Some are worth a lot of money. Some are not, and end up getting sold to be turned into fertilizer or paste to infect cows with all matter of diseases.
Things that tend to make inventory worth more money:
1) Better matching algorithms. This is, fundamentally, why Google is rich beyond the dreams of mortal men.
2) For contextual ads, being matched against content which suggests immediate purchasing intent for something which has a high customer LTV, high transaction value, and/or high margins.
3) Failing that, for brand ads, characteristics of the inventory suggest a "desirable" person at the keyboard. Ideally, you're a rich white American, male or female depending on which brand is trying to reach you, and this is one of the very few ads you will see today.
4) Within this particular session, this is the first ad you've seen.
5) You're American, Canadian, British, northern European, gap here German, Japanese, big gap other first world nation, titanic gulf anyone else.
6) The page the ad appearing on is itself of high social esteem such that the ad will have the halo effect.
Inventory which matches the above descriptions can be sold to advertisers using dedicated sales representatives. Everything else is remnant inventory -- literally, that which remains after our ad sales guys had as many steak-and-booze meetings with the marketing execs at Audi as they can possibly have.
Options for remnant inventory are: a) backfill ad channels like AdWords, which makes some remnant inventory almost as valuable as brandable inventory (e.g. if I write a blog post about credit cards and you happen to read it you're very nearly as useful as someone reading a post on the NYT about credit cards), b) house ads, and c) backfill from ad networks, such as Google house ads. (House ads are, e.g., "We couldn't sell a commercial for our TV channel so instead we'll show a commercial for another show on that channel or another business affiliated with ourselves.")
So, why is your page view remnant inventory?
1) Because generic Internet news sites generate a metric truckload of page views.
2) Because your user behavior was, sorry to say, probably not seeing that ad as the first thing you saw today.
3) Because algorithmically you don't look like a rich white American.
4) Because there are very poor transactional options for monetizing someone if all you know about them is "Possibly interested in dinosaurs," so direct response marketers are unlikely to bid on that site.
5) Because physorg.com does not have a sophisticated ad sales operation which routinely has steak dinners with ad buyers at Proctor & Gamble or any other large brand advertisers.
OK, so you're remnant inventory. Why are you seeing Google+ game ads?
1) Because Google has virtually infinite funny-money to buy ads on Google AdSense at low, low prices because they're crappy backfill remnant inventory that costs them CPMs below $1.
2) Because Google thinks promoting Google+ is their overarching strategic priority right now (they're wrong) and ...
3) ... because Google thinks that engagement on social networks is in large degree driven by games (they're right)
Is remnant inventory necessarily a bad thing?
No, because remnant inventory will inevitably be generated by attempting to monetize (with ads) any website which can't afford a direct steak-and-drinks ad sales force who can charge stupid amounts of money to brand advertisers. If you perceive any value at all out of physorg.com, you should be happy that Google is underwriting it out of their massive pile of money that they get out of controlling navigation and advertising on the Internet.
There exist non-advertising methods by which you could subsidize the creation of content which you like. Many of them involve paying non-trivial amounts of money, or praying that your interests happen to align with the interests of someone who is willing to subsidize your own consumption.
Remnant inventory also enables the creation of actual value, though you're not seeing it when you see diet pill scams. For example, almost all of Bingo Card Creator's substantial advertising budget is spent on remnant inventory at 3 to 8 cents a click, and while the websites that $15k+ a year goes to are not ones you'd really love your mother to be spending time on, selling BCC to the teachers who happen to be on them does at least help children learn to read and underwrite my quirky online pursuits like writing excessively long comments.
Remnant inventory is also virtually synonymous with Google, which a multinational advertising company which occasionally produces industrial biproducts of advertising which generate non-trivial amounts of value for almost every human alive.