The Digital Advertising Duopoly
This chart from eMarketer really brings it home.
We have a digital advertising duopoly.
The difference between second and third place is massive.
I don’t want nor do I expect any governmental response to this market failure.
I want to see the technology industry adopt new approaches to monetization, ideally not attention based models, to combat this.
I don’t think subscriptions are the only answer here, as many do.
We need models that support free consumption of media for many reasons.
I think the crypto sector has some answers for us but I am also looking elsewhere.
We need new approaches and we need them now.
What’s interesting to me is that you the consumer don’t really get much benefit from the $83B spent. Think about that for a moment. That is $300 for every man woman and child.If you count those over 18 that is $400.I don’t see consumers really getting that type of value for the spend.I’d like consumers to get paid for that type of spend, not just manipulated and gamed. Because if you count the amount of effort that goes into that spend I’d say double it.
consumers are getting a ton of benefit. google maps, chrome, free videos of all kinds on youtube, the world’s information in your pocket, etc.
Fair point. I meant from the advertisers, but you are right there is a ton of value that Google provides, same I guess for Facebook although I don’t use but when I see how much time people spend on it, they must think they are getting value.
Isn’t that fascinating. “Advertiser” -> doesn’t really know if they are getting enough value to spend $300 to $400/buying consumer … but don’t really have a choice”Consumer” -> doesn’t fully want to understand the trade offs they are making. Few of us truly grasp what we are trading in return for allowing SNAP to share our kids locations in real time or facebook building a network for minors where parental consent is an after thought or echo or siri or … But we don’t know how to separate khan academy, wikipedia, google maps, signal, etc. from the rest .. so we dive deeper and deeper”Aggregator” -> They are the true superpowers -> they dole out information and communication crack to the user and tighten their stranglehold on the advertiser. I don’t think alternative monetization mechanisms is the answer. We need better crack dealers doling out higher quality crack than what Facebook, Google and SNAP can dole out … until then this oligopoly/duopoly will not materially be affected
I really worry what these companies are doing. Sure it’s funny when an employee says “Hey Shari” and Siri responds. But what else is it recording?
fun article on that subject….https://www.zerohedge.com/news/2017…govt is already listening, so privacy left us a while back
I know that Google somehow finds and kicks back searches to my work email. I’m sure you are right. But that does not mean we need to accept it.It is like saying……well…..people drive drunk during the holiday season no worries.This is where government belongs. Find that and hand out $B’s of fines. $100 per incident and give it all to the person that was violated.If people were serious that is what they would do.
Here’s how Google search and adtech works and does kick backs. It’s broadly the same for all search.https://uploads.disquscdn.c…To do something different from Google and Facebook, the competitor would need to have a system that:(1.) Does not use Markov Chains —
The time to invest in an alternative system to Google & FB would have been 5 years ago and certainly not anything to do with Blockchain or Ethereum.The problem with decentralized systems is not only the excessive energy consumption, it’s that it makes machine learning very challenging to do.That means they’re not likely to have any teeth to eat away at Google and Facebook’s duopoly.
last I heard Google Search ins’t a markov chain. It;s a variation on a neural network
There’s hidden markov in the NN.https://uploads.disquscdn.c…
Absolutely – the unintended consequences vectors are myriad and impossible to track.Amazon does not hand this data over to developers, The Information says, because such a move would undermine Amazon’s commitment to user privacy. However, because Google, which makes the most popular Echo competitor currently on the market, does give developers access to this data, Amazon’s Echo and Alexa divisions feel they are at a disadvantage, the report states. Google did not immediately respond to a request for comment on its data-sharing policies for the Home speaker.from: https://www.theverge.com/20…That article is 6 months old and I wonder how much has changed with Amazon’s business strategy since then.
Look at what happened yesterday. Apple got caught slowing down old phones. Their apology sounded like somebody who’s hands got caught in the cookie jar: https://www.apple.com/iphon…I know for a fact, I know firsthand, I know the person that worked on it, HP put in a resistor that would break after a certain amount of time so you needed to buy a new printer. They did the same for cartridges so you couldn’t refill them.For each one that gets caught what gets away?
I woke up because you were snoring.. — No, you woke me up because you were snoring…Only Google and Apple know the truth.Subliminal night ads might be round the corner. 🙂
advertisers (especially big ones) actually do roughly know – that’s the whole point of mix media modeling
Well social networks have got us addicted via a dopamine train ride. So getting value from FB is a load of hogwash.
that’s true. nothing is for free. my view of Google has become more balanced :). they do offer a super set of applications. Facebook is a pernicious influence though. not liking that company at all.
I told you to stop chatting with that lady at night, now you have been pixelated beyond recognition. 🙂
A lot of stolen attention and productivity in exchange for interested services.We are in a mindshare economy.
Always have been.
The “benefit” allegedly is in the message, w/ relevancy tied to revenue.
Wanamaker looking good still. Advertisers are still 50% clueless. They gets tons of data about their ads, but still no idea of its impact.My fave: the 2 weeks of placements I get AFTER a purchase, for that product. Duh.
I hope you got to the original Wanamaker’s in Philly. I loved that place their Christmas Show was legendaryhttps://www.youtube.com/wat…
No. I bet it was awesone. He was very good retailer, obv.
You can see it in the Macy’s in Philly downtown (center city), who now occupies the old Wanamaker building. Same show still plays today, along with a trip through Dickens’ Christmas village.
the ice rink at City Hall is great this time of year too.
Well I can tell you that direct mail works and is trackable for sure. And what Wanamaker said relates to generally untrackable things like newspaper advertising (but not coupons). But they did know that is working even back then. Wanamaker was a big advertiser and built a business on those type of ads. I have quoted that statement as well by the way. I am sure many an ad salesman has used it as well (similar to what stock brokers do with the shit that they say..)Anyway with direct mail there was a company with a similar name to ours that was sending out deceptive notices to our customers and to others. At first I was upset. Then I realized that it actually drove business to us. And not only that but after doing it for years and years after they stopped I noticed a drop in business. I couldn’t give you exact numbers but I knew that was one of the reasons.
Yup, direct mail always worked.
Yes. As a consumer, I feel the ads I get aren’t well targetted at all. It seems that all that information they have about us is not being used to great effect, at least, not on me. Even on the most basic concepts, i’ll give an example, I’ve been a happy metromile customer for over a year, and I still get ads for metromile.
I agree. The ads I get served up are utterly irrelevant, and therefore annoying. As I’ve said before, advertising is not native to the web. It’s a virus. It needs eradicating.
I agree. But how will that happen?
That’s maddening. I *am* lurking for specific stuff I want to buy when there’s a sale. Why can’t I register my interest somewhere ? And after the fact I’ll be bombarded with dupes…
“Oath”?! Never heard of it…
Oath is the combination of AOL and Yahoo, acquired and rebranded by Verizon.
The consumers get bits and pieces of that amount in digital services, yet the rest of it the “dupolists” get. I think new tech can make sure that resources spent on advertising can be diverted and provide real benefit and create an actual service that saves money for consumers. I am trying to do that, to take some of that money and give to the actual public(consumers) by providing for them the real service,not just digital one for the first time. check it out at https://advertising-info.in… and inadrive.com.Is there a company that is trying to do something similar? To shift this money to the hands of consumer?
Just as an example, couldn’t Uber and Lyft do this, the same way bike-sharing startups in China can & will? Perhaps there is a cultural aversion to that, but the level of free consumer engagement Uber and Lyft get is massive. Separately, do you think Amazon can use their properties and inroads to cut into this market?
Last CES – I saw promotions from Sprint & Snapchat in Uber’s (then) new UI. Amazon is becoming a strong third alternate to Google & Facebook. They are continuing to pitch advertisers across their owned & operated properties and also the open web.
Ironically, I could support some slight govt regulation here! Why isn’t your data on Facebook totally portable? Linkedin? Google? Yelp? Foursquare?I agree this is why crypto is pretty compelling.
I don’t see how portability changes the dynamic. Google and Facebook have been allowed to gobble up similar companies for years, making them more central. Why advertise on Twitter when I get Facebook, Messenger, Instagram and WhatsApp for one effort and already know how that system works?The only way to weaken the duopoly is for something new to pull attention away from them or the government stepping in to break these companies apart. I don’t see the latter happening.
If I can port my data (which I cannot do now) a competitor could come. Changes the incentives from them having the power over me, to me having control over my data. I can totally see your point of view. I hate government regulation, and only think it should be used as a last resort.And, I just saw this: https://www.wsj.com/article… Google is working with hotels; ‘More than 100 million Americans are expected to travel during the holidays, and many will search for lodging online. But travelers may unknowingly pay more and fail to see all of their options because some major hotels have ganged up with Google to undercut competition.”
Portability in social networks in particular is a very tricky problem, of course. How do port my experience when the person who commented on my post didn’t agree to be ported as well, for instance?I think the second part of your reply is the bigger problem. A lack of competition stymies the options available to consumers. Less competition means less eyeballs which means little reason for advertisers to advertise.(For the record, I believe government regulation is a tool, one like many others, and should be used as a last resort.)
a neutral platform might be able to overcome the porting problem you describe. a user has their own independent ‘platform’ and ‘threads’ it to the access platform of another user by mutual consent.
thanks. is this a blockchain based application?
Why isn’t your data on Facebook totally portable?By ‘portable’ you must mean ‘easily interchangeable to be able to use on a competitive platform’.Why should you be able to get your FB data easily but not Best Buy’s or Shake Shop’s data on you?  How is that any different. FB is a private business that you have voluntarily decided to join. That said they do offer the ability to download your account but to your point it’s not in any interchangeable format. Why should they have to do that and make it easy for competitors? I don’t do that in my business and I am sure you don’t as well ie ‘give me your notes on our meeting so that I can use that with other potential investors and make their and my job easier’.Google is portable by the way. See ‘download your data’. https://uploads.disquscdn.c…Ditto for FB for that matter:https://www.facebook.com/he… So I could take my purchases at Panera Bread or Whole Foods and then prove I am a good customer (easily) and move my business and get discounts.
For European residents it likely soon will be. GDPR (General Data Protection Regulation) coming May 2018 enforces a series of Data Subject rights including the right of ‘Access’ (the firm has to tell you what they have) and the right of ‘Portability’ (they have to give it to you in a useable format).The core premise of GDPR is that the Data Subject (the individual) has total ownership of their personal data. It is illegal to hold or process personal data without explicit consent or another lawful basis. The hurdles for consent are much higher (must be a separate op-in, can’t be embedded in T&Cs etc).GDPR applies to any data held on a European resident irrespective of the location of the firm or DC. Fines for breaches are massive – up to EURO20m or 4% of global turnover whichever is higher.This is more than ‘slight govt regulation’ it is a massive shift in privacy regulation and is likely to provoke significant disruption in the ad market.Watch the GDPR space. It’s coming fast and most of the ad ecosystem, data aggregators etc are not ready.
are there any crypto solutions that can be shared? i know of steemit and brave. to me both seem problematic; i really doubt voluntaryism will work, and i doubt issuing points and relying on speculators to generate value will work either. i suspect serious content producers will want a somewhat predictable paycheck.in the long run i think crypto-economies will give birth to digital nations that sponsor media to generate their own culture. this i think will be the most viable solution. though in the truly long run it will end up looking the same as it does today. the more things change, the more they stay the same…..
No one knows the answer.I think the future is yet to be invented nor nearly known.Touched on some it here as I’m trying to come to grips with tokenizing behavior and so far there are no good answers.http://arnoldwaldstein.com/…
The most unfortunate part is that both Facebook and Google have moved to a traditional advertising GRP model. It means the ideas around building community, engagement have completely disappeared and we are going to end up in a mass media spam world. It’s boring as someone who runs an Agency and it will have some serious impacts for consumer experience in the coming years with AI media machines taking over.
Did not know that but it makes total sense. It’s the only sure way to take your rough home as an ad vendor.Hilarious that they still say they are not media companies.
we’ll see. I think these models can be merged
TV ad spend 2017 projections are at approximately $72.72 billion. When you look at digital ad spend, it needs to be compared to all ad spending, not just digital. Digital only compromises 36.7% of all ad/media spending. The old powers, especially TV still rule the kingdom.This is not to discount your point about a duopoly. I agree that there needs to be some new players or disruptions from some at the bottom from that chart. Disruptors will eventually come to this space. Disruptors always come to all spaces.Data Source: https://www.emarketer.com/R…
Growth of OTT and rich media, and video in particular, is blurring the lines wrt to the consumer’s viewing experience relative to traditional TV. Digital grapples w/ completion rates while traditional TV grapples with DVR and on demand viewing (+7), all in an attempt to circumvent ad exposure. Ads are way too pervasive, and inconsistency of delivery from site-to-site only exarcebates the annoyance factor w/ digital distribution.
Who vets this emarketer data? They are making projections into the future as well. Has anyone actually tracked their past predictions against what has actually happened? (And to my point how would that even be possible). This data is totally analog but everyone is discussing it as if it’s factual. It’s very Mary Meeker to me.If you go to their webpage ‘about’ there is nothing on who runs the place either.https://www.emarketer.com/a…I followed to link to find out about Monica Peart ‘senior forecasing analyst’. Nothing on the link at all. So I went to her linkedin. Nothing big there either more of a management job. The company seems more dedicated to packing and selling data, not integrity of the data or why you should trust what they are saying (you can tell by the site).Compare this with, say, mitre.org which does government funded research.https://www.mitre.org/about…https://www.mitre.org/resea…On emarketer nothing which talks about the integrity of the underlying data. Just a bunch of marketing bullshit:https://www.emarketer.com/c…
Not many people outside of DC and DoD work know about Mitre! They are another example of where the US DoD is way way ahead of the US commercial world. Thankfully for US national security since otherwise we’d all be in really serious, deep, reeking stuff!
Back in the arpanet days mitre was one of the places that I teleneted to. I would go from one arpanet host to another all across the country and then back to Wharton. The sole purpose was just to see the echo delay and for fun. The other thing I did for fun was setup a routine that did nothing and just went in circles. I was called into the computer center office they thought I was selling computer time. Anyway I really like serious organizations like mitre that are filled with people who appear to be doing important things. Because they said my account used 50% of the student allotment for everyone that particular month. DECsystem-1090
They buy the data, including from sources that are vetted by the government (looking at you Nielsen)
Sponsors ship will be the disruptive. Trusted brands will buy media outlets and give them away free as a public service.Think, the Washington Post brought to you by Amazon.
That also has to do with the average age of a CMO right now and the power that the traditional media companies have in the context of making media purchase decisions. With AI Systems, and many Corporations building internal internal creative Teams that is going to significantly change. Too many Millennials are cord nevers never mind cord cutters so these numbers are going to godown. Whether or not Netflix and the like actually start doing ad supported systems vs. subscription is a different opportunity.
TV spend has remained relatively stable over the last decade. Even in 2017, there is no better medium than TV for top-of-the-funnel brand advertising. While the growth in brand advertising is in youtube and internet video, the effectiveness of brand advertising on OTT video is still unproven and questionable. The viewer is in a very different mindset compared to lean-back TV.
I never understood that. Digital should be more, especially as more TV becomes digital content of a different sort…
Resistance to change. You’d be surprised at how many businesses don’t do any digital advertising at all.
Do you think this model in crypto looks like AdEx? Also wonder how much consumer pushback is needed to break the cycle.
Civil, right here in Gowanus Brooklyn, is another org taking a stab at reimagining media, specifically journalism, using the blockchain. https://joincivil.com/
What’s the business model? Went to one of their meetups. Looks like a solution searching for a reason.
There is no need to fear, Jeff Bezos is near
“elsewhere”? – do tell.WPP and Publicis tried to put the squeeze on Foogle earlier this year. It’s difficult to launch a front on assault though. They need to fund startup innovation. Perhaps they are. I’ll try to whisper something encouraging in Martin Sorrell’s ear next time I’m at Davos.
Fund startup innovation?! WPP is a UK plc. Where did they open their tech venture arm? Was it in Silicon Roundabout near Liverpool Street, London? Was it in Edinburgh where there’s strength in AI engineering? Was it in Manchester?Nope. They opened up in Silicon Valley in 2012 and then in Austin, Texas. Five years on, still no plans to support London’s tech ecosystem.Moreover, I personally met Martin Sorrell in May 2011 at London Business School. Even then he was complaining about Froogle as WPP’s frenemies:* https://www.ft.com/content/…He ASKED us to contact him if we had good ideas for how to help WPP stay competitive.I contacted him with a view for WPP to make a strategic investment in my system — which actually is very different from Froogle and the way they classify things.What happened?WPP missed out on the opportunity as far back as May 2011 to build a European version of Froogle is what happened.Oh well.
I will take the over on the estimates for Amazon’s ad revenue for the next few years. I would guess that they are poised to grow significantly more with a new focus on serving up advertising beyond just the Amazon ecosystem.https://www.cnbc.com/2017/1…
this is *Exactly* what i said 3 days ago in a conference where i talked about the future of Ad tech and blockchain.
The irony of DOJ looking at Disney/Fox and TW/ATT for consolidation of power and unfair leverage concerns while FB and GOOG dominate to even greater extremes than any other industry in my lifetime isn’t lost on me. (You can throw AMZN in the mix wrt e-commerce.) Either let the free markets decide or have a level playing field w/ respect to market power control/constraints, but don’t cherry pick. Consistency of thought and on regs is needed, and currently it’s quite subjective.
‘Organic domination’ is not the same as a merger or purchase.
That’s true but those companies aren’t solely organic.
That is a different ‘crime’, say, ala Microsoft and operating systems.But honestly even then it’s not an event noted by a demarcation point like a merger is. Hence there is not going to be the same scrutiny or call to action. Plus (as in any negotiation or selling) with a merger there is a time element. And people tend to act when there is a deadline. A long standing crime appears to be back burner and can be dealt with at a later time.And in no way is what G/FB doing (build a product that people want to use) the same as Microsoft and operating systems.I could see potential for Amazon to get nicked in some way because it’s possible they are doing things using their market power to keep out competition. (If that is the case my point being could happen vs. FB whose arm are they twisting?)
the DOJ has to balance its internal self interests with those of other branches of government. it’s getting to the point where there’s de facto a DOG and a DOF.
“this market failure.”A monopoly is not a market failure unless the monopolist uses position to treat its customers poorly without suffering consequences. (See: the larger cable companies today, AT&T in the 60’s and 70’s, and Microsoft in the ’90s, where customers had no other options)That is not the case with Google, as far as I’m aware. Google knows that if it abuses its consumers, they will start using Bing and *poof* the monopoly (ok, duopoly) begins to evaporate. The only way Google is able to maintain its position is by offering legitimately better products than competitors.If you are referring to Google systematically abusing customers, then please share, and we can discuss that market failure.
I didn’t realize how big this was for Amazon, and how close Snapchat and Twitter are.
AMZN ad revenue is huge, but a pimple compared to company’s e-commerce rev. AWS falls into that bucket too, but with killer margins.
AMZN intrigues me.Their margins are so low on products, but that is what makes them irresistible to buy from. It is their moat. Best Buy has been getting better. But if I’m sitting here thinking about buying Chinese Five Spice Powder to make my own Malatang Soup why do I want to go find that? It will be at my office tomorrow.Their margins on AWS are so high 25% because I believe so many companies just don’t want, can’t find, don’t have the talent to run datacenters. They get startups hooked on that service and then they have you. Not saying that someday that will be like their retail service where you just can’t resist.
The secret sauce is actually immediate gratification. If that wasn’t the case Jeff wouldn’t have built so many warehouses and now his own (shitty for now) delivery network. Add in the security of a known seller as well. I will pay more for something if delivery by Amazon Prime from their warehouse than I will shipped from a third party seller. I am now using Amazon Locker since I am at Whole Foods every few days anyway.When will Amazon become even more profitable? When they start jacking up prices which they will do for sure. Just like Netflix recently raised their pricing. $2 on a $10 sale is a 20% increase straight to the bottom line (Netflix).AWS is the ‘not get fired for choosing IBM’ choice.Plus not doing it inhouse is a good way to protect your job because you can point fingers. In my first business we replaced an inhouse printshop. At first the many that ran the print shop was pissed. Then he was super happy one reason was he had all the glory and we had all the aggravation. And if anything went wrong he could blame us. The execs liked it as well they could use the space for MRI and Cat scan machines.
I would say one thing…..their drivers are not nearly as good as UPS, but many places like us have gone to an open outer door from 9 to 5 with an atrium and a closed inner door. Kind of what is expected.
Back in the day my Dad used to buy used cardboard boxes for shipping out of his wholesale operation. It is amazing how many empty Amazon boxes we put in the dumpster. And they are good brand new boxes. Not like the crap my Dad used to get. If kids had jobs today like they did back then someone would be going around picking up empties from office complexes instead of them going into recycling (and we don’t even do that here they are just trashed full size taking up room (it’s what the office Fraulein do typically).Actually this would be something that ‘Jeff’ could do to put more people to work. Collect used boxes and take them back to the warehouse to re-use. Much more valuable than recycle (which till recently I hear went to China anyway.)
Wow we could not think more alike. I have always thought why doesn’t Amazon pickup the old boxes and packing if you place it nicely and re-use it. The truck just dropped off full boxes, get the old ones from the day before, no extra time, no extra space, really no extra work.I’d even do it if they just said the money went to charity. They could do 50-50 for your delivery fees.
We think alike because we both pay attention to small details I think at least in part. And interact with ‘normals’.A few problems need to be solved. First it creates friction against completing a large number of deliveries the same day by the driver which is the main job they are doing, right? Second the boxes have to be broken flat which does take time (and involves a knife as well). Removal of labels can be done in bulk back at a warehouse.Back in the day I used to have a delivery truck and it’s non trivial to keep that working and making deliveries and so on. Deliveries are time sensitive old boxes are not. They don’t go stale.Which is why I think it’s better handled by a third party contract with separate employees. Not even Amazon employees actually. Otherwise if they have to pay drivers more then the cost of the less efficient delivery employees goes up across the board.I had a place of business once in an industrial park where my neighbor did recycling of old xray films. All the people did all day was remove the films from the paper pockets (with written notes), shred the paper, get the silver from the xrays.I thought of something that Jeff could do to increase delivery efficiency. I thought of this years ago with UPS. I thought ‘why doesn’t UPS give you a signal when there driver is close to doing his pickup at your warehouse?’. Like a 5 or 10 minute ‘heads up UPS is here’. With Amazon deliveries if the person knows Amazon is coming to their home door (or business) they are then not going to have to get up from the couch etc and it will save time. They could do this now with a message on Amazon echo or even a separate device (that way I wouldn’t miss my deliveries like has happened).
The person comes in your office anyway. They can choose to take the boxes and material if it is well stacked or not take it if it is shitty.No extra time. Less space than they just took off.You don’t have to take it to the dumpster and feel “green”They have systems: Say we gave $X to charity Y because Z company gave us back our boxes. They have the systems. Easy. Profit margin? Better than AWS give the charity $.50 on the dollar and everybody feels good. Get people to agree to take a “reused” box to give a child in a third world country water.
I looked into this and concluded I am wrong. Amazon ships 500mm boxes a year. Each box costs about $0.10 so that means it is a $50mm problem. Let’s say by miraculous reuse of boxes you use multiple times you half that cost…..$25mm. For Amazon the cost to do this would have to be well over $10mm if not more,
I agree this is not something that Amazon has to worry about (as mentioned it is a third party opportunity at best).But no way their average cost of a box is .10.Here is ‘full load full retail’ pricing on different boxes from Ulineto illustrate (with profit and for lower volume buyers):https://www.uline.com/Promo…Uline claims to sell 2,500,000 boxes per day. That’s almost a billion boxes a year. I don’t believe the number is anything like that (seems just to high) but my point is if their average box cost was .10 they’dbe making boatloads of money. No way the cost and margin are like that.Boxes are corrugated paper run through a machine (which only goes so fast) and corrugated in volume still costs real dollars. Even if you have the machine and are making the boxes yourself it’s not going to be .10 even at highest volumes. No way.Now what’s interesting with Amazon is that they are trying to shave pennies actually. For example they use to put packing slips in the shipments but stopped doing it. That paper amount and savings were trivial. They don’t even put any promo materials in the boxes.Interesting re this discussion:https://www.barrons.com/art…https://finance.yahoo.com/q…Hard to believe the stock price increase since that article was published reflects the risk of having Amazon as a big customer. You know Jeff could easily play any supplier by starting to pickup boxes just so they think he would do that. This is similar to oil prices and America’s push toward electric in a way. You fake a potential ‘competitor’ if you don’t have a real one.
That’s exactly who I looked at Uline! The average box is $.34. Now realize they have to go to Uline and then get handled and shipped from there. So I figured the cost operating margin is $.20. Then you have to pay for overhead and such (think about how many of those books you get, you do get the yellow page size book several times a year to several people?) So I’d say on a low margin item you need to make 50%, i.e. $.10However your Barron’s article says Amazon’s cost is 8% to 10% of $23B which is $2B. That can’t be right because that would be $4 a box.So somewhere my numbers are off.It is interesting: spiff the driver to incent them to talk it up to customers, tell the customers, you are giving back to the environment (no different than the lead item in the International Paper report where they talk about the environment)I think that was behind the Whole Foods buy. Put lockers in those stores, they must have run the demographics.What’s most interesting to me though is what people will do to save small amounts of money. I am just as guilty as the next person.For instance I don’t know if you have Aldi and Lidl near you. I have both (literally across the street from each other) and that must be also why Whole Foods sold.They have an organic section but their footprint is tiny and their SKU’s are minimal. You get one choice of each item and most are store brands.But they are PACKED and you can see how they save money. Items still in the big box shipped in.Most interesting though is how they save pennies on other stuff.They do the pay for the bag, ok I’ve seen that. People bring in their own.What I find fascinating though is you put a quarter in to unlock a cart and when you return it and lock it back up you get your quarter back.Yesterday for fun I decided to leave my cart in the parking lot and see how long it would take for somebody to scoop up. Literally before I could even start to drive off and watch to see somebody ran to get it so they could get that quarter.Such an interesting study. If everybody left their carts the whole quarter thing wouldn’t matter. But they don’t!I mean think about it…..realistically I waste more food (spoiled) than that.
What’s most interesting to me though is what people will do to save small amounts of money.At the core it’s not about saving small amounts of money. It’s about reduction in feeling guilty for wasting.Example this is the reason people don’t want to throw things out that have value they would rather have garage sales (where you sit all day; something I will never do) and collect trivial amounts for the time spent. Or donate to charity. (Double good feeling ‘no waste’ and ‘I am a good person’).Same reason people tip (many people not saying everyone) the bellman or tip in other places. Avoidance of a bad feeling for not doing it. (In addition to why you tip as you have mentioned).What I find fascinating though is you put a quarter in to unlock a cart and when you return it and lock it back up you get your quarter back.Seriously? I’ve never seen that. How can they do that? I don’t carry quarters around even.how long it would take for somebody to scoop up.Like ‘smartcart’ left in upper levels of PHL etc. If everybody left their carts the whole quarter thing wouldn’t matter. But they don’t!My wife does the supermarket shopping. But when I go to Trader Joe’s I buy bulk water (ionized). And I need a cart. I always leave the cart in the parking lot. Why? I figured (rationalize) it’s better for the employees not worse. Likewise any way to increase the labor and keep people employed is good, not bad is my rational!They built an Aldi in Bensalem around the time I moved my business from there to across the river. I was never in the store. I was lucky at the time I met my wife they had just built the race track. So the office I had became more valuable and I didn’t take a bath selling it.
Totally agree. The recycle bins in my building were stuffed full of amazon boxes this week. So much waste… and such an easy job for a high schooler to do.
The only problem is you have to monitor people in your office. So the delivery person by necessity is allowed in. I mean if I outlawed personal deliveries in my office I would have a revolt. (starting with my wife who gets them shipped there)But a random high school student? Not so much.
Look at Costco, they make their money on membership fees, not product. AMZN could do the same and continue to create and layer in premium subscription upgrades (e.g., music, movies, sports). I think they’ll be creating sub layers, such as Prime, Prime Plus, Prime Platinum as they increasingly invest in content to complement their e-commerce biz.
Don’t understand Best Buy’s relevancy at all any more. Everything they sell increasingly is commodity based. They should be a hybrid retail/digital model, with retail functioning exclusivity as small showrooms and nothing more. Their current overhead and RPSF requirements must be huge.
When you need something last minute their order and pickup in an hour is nice.Their prices are better than Amazon now, I think they tell people if we are going to stock it you pay a slotting fee.I predicted this a while ago. You want shelf space you pay.
Agree. Will add thought that showrooms are even less important because:a) Liberal ability to return online complete with pickup. So if you make a mistake not a big deal.b) Availability of online information to help make a purchase (even if much of that info is bogus).c) Difficulty of comparing online info to things you view in store (blocked or bad wifi, having to use small screen etc.)Honestly it used to be much simpler and less aggravating. I am looking to buy a good coffee maker. If I check Amazon I can easily waste time on reviews and so on. If I go to Sur La Table and pick one out I still have to think about the reviews as well. And much of the reviews can’t be trusted. Now even fakespot.com can’t be trusted. Was easier when I would just see something, like the price and buy it and not look back. (Just like travel was easier with travel agents in the past in a similar way for many people.)
Good and expensive coffee makers..https://us.jura.com/enI don’t own one but have seen working and tasted coffee made in one. Beautiful machines.https://plus.google.com/+Li…
FYI, we’re staying at a relatives house for a few days and they have a $4K Jura machine. At home we have a $1K Delonghi. Honestly, the Jura is sleeker looking and a bit more hi tech, but I’m not seeing a demonstrable difference in coffee quality. It’s mostly about the beans.
Fortunately there is a limit on how much attention you can grab away from human beings, screen space and time are limited.How Google and FB will grow from here, in this mindshare economy, is an interesting question.
I wouldn’t bet on hitting some kind of cap on the amount of attention anytime soon. When the desktop share of attention peaked, we invented a new screen (mobile) and that primarily added more attention time to the equation rather than transitioning it from desktop. Inventing new digital ways to capture people’s attention is still big business and is nowhere near tapped out.
I agree with you in that mobile created new space, but it also sucked attention out of TV time. But my focus is in ad watching time. There is a saturation point and signal to noise ratio in decreasing rapidly.Tell me when was the last time you watched a full Youtube ad in full before skipping. Full / skipped is your signal to noise ratio. Ad marketers are lying.
A lot happens in those 5 seconds before you’re allowed to skip, and they’re very much signal. But overall, my point would be that as we shift our attention to digital, I really don’t believe there is such a cap on how much attention you can grab away, other than the limit of your tactical and executional prowess. Think about it, everything you did on TV, radio, print, etc. can be done much better in the digital world through personalization, targeting, interactivity, etc. and as long as people’s time spent on that list of platforms in the original post keeps rising, the opportunities only grow.
Interesting thought that I had this morning.  The general drop in consumer interest and excitement about cars might relate in part to the growth in cable tv and hundreds of channels and lack of dominance of the big 3 tv networks . They had a concentration of viewers that could be cost effectively brainwashed into wanting to replace autos more often than they needed to.  Back in the day people used to leave the window sticker on their car so that the neighbors could see what they paid for it.A somewhat similar thing happened with businesses that would typically advertise in local newspapers that no longer do that. because people are not reading newspapers anymore and the alternatives are not as cost effective or don’t deliver the same type of captive audience (some examples: Furniture dealers, electronics, appliances) While sitting in my car at a traffic light behind a cheap Chevrolet with that shitty logo (to big any lacking any elegance in design). Many things contributed to this for sure but I am certain this is one of them.
Media fragmentation has only increased the importance of data analytics (wrt alleged efficiencies and targeting).
The Chinese model/s are forcing change. IoT mesh front of till leaders Alexa Siri Alibaba are forcing change. D-Wave will lead to IoT cyber agreements. Long-distance quantum communicationwill force change http://www.ecns.cn/2017/12-… “Time is information we don’t have” [Rovelli] What will CERN discover tomorrow?
Amazon will climb up this ladder in due course.
All this could change overnight.I don’t think Zuck is planning a political run. I think he realized that his empire could crumble if his userbase doesnt ‘like’ him. The irony.
Nice data.For year 2017, the table gives $83.00 billion as the “total digital ad spending”.Well, the numbers for year 2017 and their total is35.00 + 3.88 + 17.37 + 3.08 + 3.60 + 0.81 + 3.60 + 1.65 + 1.21 + 0.72 + 0.64 + 0.45 = 72.01So, the $83.00 billion is another $11 billion.Okay, then the table has $72.01 billion, and all the rest, in all the other Web sites in the world, is only another $11 billion?Interesting.Gee, considering how irritating Taboola is, I would’a guess that they would be getting another $50 billion just on their own!!!My view is that (1) there is a lot of content on the Internet, the total is growing, and for ballpark 2/3rds the “safe for work” content the best means to find desired content are at best poor and (2) there is a lot of shopping to do on the Internet, and the best means are poor.Of course, I’ve designed and programmed a solution for (1), and shopping for parts for my first server computer just re-discovered (2).Success with (1) could do a lot to break the “duopoly”, and success with both (1) and (2) could do a lot more.IMHO, both (1) and (2) can be monetized plenty well enough for now with advertising. Soon both (1) and (2) could do much better with much better ad targeting which is quite doable.For doing something about the duopoly and forWe need new approaches and we need them now. I don’t understand: Sorry, but a huge pile of data I have says that in rock solid, granite hard, iron clad, A+, #1 terms, there is in all the world exactly one (1) person actually interested with anything very new and effective for (1) — me. For (2), so far the number stands to be zero (0).
https://uploads.disquscdn.c… Noticed the same thing yesterday, so I made a little Excel sheet. Either “Other revenue” or “Traffic Acquisition Cost (TAC)” is missing before the total digital ad spending. If it’s TAC, I understand it that 3rd parties will get lower paid for partnering with the big ad players in the market. If it’s “other revenue” it might be some error in the data graphic as the total per centage growth vary?
CONTRIBUTORS:The complaints are abundant regarding the dislikes of the social media services mentioned. But how many of the complainers have an account with FANG? They are monetizing off your information for free with small tokens of apps they convinced you need.Captain Obvious!#UNEQUIVOCALLYUNAPOLOGETICALLYINDEPENDENT
Let’s just re-title this post The Don Quixote Manifesto.Please refer to your dog eared copy of Trout & Ries’ The 22 Immutable Laws of Marketing. All markets end in duopolies of some sort.Tech is singular in the sped of maturation and the winner take all outcomes.More interesting is that each of these listed ad networks is, in fact, a separate category: search, short video, social, still photo social, professional social, etc.There is no Calvary charge coming.
>> Let’s just re-title this post The Don Quixote Manifesto.Or “The Fred Wilson Manifesto of the Week”Fred needs to seriously think about the direction this blog is heading. More and more this blog is has become a platform which Fred uses to shill and complain. He is clearly “losing it.” In part I guess his health has probably declined due to overwork which is making it more and more difficult for him to think clearly. But also, he has become so self-absorbed that the blog now reeks of “it’s all about me (Fred Wilson).”Unfettered competiton naturally leads to winner-take-almost-all, dog eat dog, law of the jungle, etc.Fred often tacitly supports the law of the jungle (when it is in his interest) but is now apparently irked because he is on the losing side. In other words, I suppose Fred is displeased because his horse (Twitter) is not #1 or #2. Twitter obviously needs to be purchased because social media is now in a consolidation phase.
Your comment is both mean spirited and inaccurate: an inauspicious daily double.As VC returns to its less consumer oriented, traditional deep science and infrastructure for large enterprises focus, Fred has fewer accessible topics for neophytes or generalists. It’s the environment, not the author.He is all in on crypto and is right enough, in the sense that it will serve some technical purpose – his instincts are too well honed to be totally off.However, Bill Gates told everyone that IVR was the next interface over 20 years ago and every bet made in that space has been way early and therefore, wrong.Amazingly, Fred will not even be wrong here, as he is shrewd enough to take stakes off the table during he bubble.Shrewd is something you should aspire to be, as opposed to shrill or just plain shitty.Saying those things about others betrays more about your view of yourself than anything else.Perhaps a New Years resolution would help?
The mods have been blocking my responses to you. I have toned down my language in the hope that they will approve this comment.>> Your comment is both mean spirited and inaccurate: an inauspicious daily double.Many of my comments are both justifiably harsh and accurate.On the other hand, your “defense” of Fred was verbose yet feeble.You seem to read from the same playbook as Fred: that is you seem to believe the best defense is a good offense. Fred often shills and his minions play the part of patsies. Herein you have played the patsy.>> As VC returns to its less consumer oriented, traditional deep science and infrastructure for large enterprises focus,Oh yes. Lots of “deep science” on this blog. Sure. Yep. Um. Where exactly is it? And where is this “infrastructure for large enterprises focus” you write of? This blog is in large part a way from Fred to market himself to entrepreneurs and LPs (limited partners). It is easily accessible to thoughtful, reasonably intelligent people who are generally familiar with business and finance.>> Fred has fewer accessible topics for neophytes or generalists.Are you serious? This blog specializes in topics for neophytes and generalists.Furthermore, it seems you are saying, “He is not shill and a scofflaw, you just don’t understand him.” And Al Capone was just helping people provide hospitality. Ok. Sure, he had to bend a few laws and ventilate a few people. But hey. Business is business.>> It’s the environment, not the author.No. It is not. It is the author. Fred is being deceitful. Pure and simple.>> He is all in on cryptoHow you do know? Let me guess. You have a crystal ball. Right?Based on what Fred wrote on this blog, he seems to have dumped much of his crypto recently. Essentially you seem to be asserting, “I read what Fred wrote and therefore I know what Fred did!”I, on the other hand, am basing my attacks against Fred based on the deceitful statements he has posted on this blog. No crystal ball required! See?>> and is right enough, in the sensethat it will serve some technical purposeWhat kind of vague unhelpful assertion is that? He’s shilling for Ponzi-ish scheme. By “technical purpose” do you mean blockchain? That is distinct from persuading people that crypto is a legitimate currency. It is not. Blockchain is an interesting technology but its existence does not legitimize crypto.>> his instincts are too well honed to be totally off.Instincts! Ah yes. I feel your vibes man. Yeah. Man. Like, I really can sense what you are emitting. Groovy. Let’s go hug a tree!I guess your instincts allow you guys to ignore pesky little things called f-a-c-t-s. Right? “Go with your gut man!” That is what fools and liars often say because they either do not understand the truth or they hate the truth.>>However, Bill Gates told everyone that IVR was the next interface over 20 years ago and every bet made in that space has been way early and therefore, wrong.Nice non-sequitur!IVR was a reasonable business to invest it. Largely it turned out to be a flop. But that is the nature of investing. VCs (like Fred) often invest in flops.But, see gambling is not investing. Sure, every day ordinary people leave the gambling tables in Monaco and Macau as millionaires. But they did not become millionaires by investing their money. They became millionaires by gambling.Lying to people to persuade them a gamble is an investment is, well, it is l-y-i-n-g.>> Amazingly, Fred will not even be wrong hereSays who? You? Based on your “gut feeling” perhaps?>>, as he is shrewd enough to take stakes off the table during he bubble.How would you know? Are you privy to Fred’s finances? Of are you just sort of “going with your gut man”?>> Shrewd is something you should aspire to be,I aspire to be wise. I am not. I know that.Would you suggest I become shrewd like you? Your opinion is based on what? Your “gut feeling”? When this whole crypto mess collapses guys like you will predictably disappear or invent all sort of excuses like, oh, say, “irrational exuberance.” Many of the AVC.com literati are like-minded deluded sycophants.>> as opposed to shrill orYelling into a hurricane often requires one to be shrill. Reading many in the forum prattle on like a bunch of brainwashed nitwits is disgusting.>> just plain shitty.Why argue rationally when you can simply use filthy disparaging language? Well played! First comes disparagement, then dehumanization, then eventually murder. Seems like too big of a jump? My rabbis have written about that for millenia.For thousands of years we Jews have dealt with wicked pagans. Thankfully Christians and Muslims have come along to help spread Noahidism around the world. Typically Christians and Muslims have either converted pagans or killed them.Pagans inevitably hate Noahides and Jews.>> Saying those things about others betrays more about your view of yourself than anything else.That ‘aint arguin’ man. That is just a wimpy little smokescreen. I can smell the sulphur.>> Perhaps a New Years resolution would help?Our New Year was a couple of months ago. It is called Rosh Hashanah. We do not go out and get drunk and “happy”. We pray to G-d to amongst other things, convert Pagans to Noahides.Try t-h-i-n-k-i-n-g more and f-e-e-l-i-n-g less. Then you will see how the current crypto currency fad is a dishonest scheme and how Fred is using you and other AVC.com literati to burnish his reputation.
we’re not blocking. I checked.
The mods have been blocking my responses to you. I have toned down my language in the hope that they will approve this comment.>> Your comment is both mean spirited and inaccurate: an inauspicious daily double.Many of my comments are both justifiably harsh and accurate.On the other hand, your “defense” of Fred was verbose yet feeble.You seem to read from the same playbook as Fred: that is you seem to believe the best defense is a good offense. Fred often shills and his minions play the part of patsies. Herein you have played the patsy.>> As VC returns to its less consumer oriented, traditional deep science and infrastructure for large enterprises focus,Oh yes. Lots of “deep science” on this blog. Sure. Yep. Um. Where exactly is it? And where is this “infrastructure for large enterprises focus” you write of? This blog is in large part a way from Fred to market himself to entrepreneurs and LPs (limited partners). It is easily accessible to thoughtful, reasonably intelligent people who are generally familiar with business and finance.>> Fred has fewer accessible topics for neophytes or generalists.Are you serious? This blog specializes in topics for neophytes and generalists.Furthermore, it seems you are saying, “He is not shill and a scofflaw, you just don’t understand him.” And Al Capone was just helping people provide hospitality. Ok. Sure, he had to bend a few laws and ventilate a few people. But hey. Business is business.>> It’s the environment, not the author.No. It is not. It is the author. Fred is being deceitful. Pure and simple.>> He is all in on cryptoHow you do know? Let me guess. You have a crystal ball. Right?Based on what Fred wrote on this blog, he seems to have dumped much of his crypto recently. Essentially you seem to be asserting, “I read what Fred wrote and therefore I know what Fred did!”I, on the other hand, am basing my attacks against Fred based on the deceitful statements he has posted on this blog. No crystal ball required! See?>> and is right enough, in the sensethat it will serve some technical purposeWhat kind of vague unhelpful assertion is that? He’s shilling for Ponzi-ish scheme. By “technical purpose” do you mean blockchain? That is distinct from persuading people that crypto is a legitimate currency. It is not. Blockchain is an interesting technology but its existence does not legitimize crypto.>> his instincts are too well honed to be totally off.Instincts! Ah yes. I feel your vibes man. Yeah. Man. Like, I really can sense what you are emitting. Groovy. Let’s go hug a tree!I guess your instincts allow you guys to ignore pesky little things called f-a-c-t-s. Right? “Go with your gut man!” That is what fools and liars often say because they either do not understand the truth or they hate the truth.>>However, Bill Gates told everyone that IVR was the next interface over 20 years ago and every bet made in that space has been way early and therefore, wrong.Nice non-sequitur!IVR was a reasonable business to invest it. Largely it turned out to be a flop. But that is the nature of investing. VCs (like Fred) often invest in flops.But, see gambling is not investing. Sure, every day ordinary people leave the gambling tables in Monaco and Macau as millionaires. But they did not become millionaires by investing their money. They became millionaires by gambling.Lying to people to persuade them a gamble is an investment is, well, it is l-y-i-n-g.>> Amazingly, Fred will not even be wrong hereSays who? You? Based on your “gut feeling” perhaps?>>, as he is shrewd enough to take stakes off the table during he bubble.How would you know? Are you privy to Fred’s finances? Of are you just sort of “going with your gut man”?>> Shrewd is something you should aspire to be,I aspire to be wise. I am not. I know that.Would you suggest I become shrewd like you? Your opinion is based on what? Your “gut feeling”? When this whole crypto mess collapses guys like you will predictably disappear or invent all sort of excuses like, oh, say, “irrational exuberance.” Many of the AVC.com literati are like-minded deluded sycophants.>> as opposed to shrill orYelling into a hurricane often requires one to be shrill. Reading many in the forum prattle on like a bunch of brainwashed nitwits is disgusting.>> just plain shitty.Why argue rationally when you can simply use filthy disparaging language? Well played! First comes disparagement, then dehumanization, then well, the mods keep blocking this comment, therefore I will let you try to fill in the rest yourself.>> Saying those things about others betrays more about your view of yourself than anything else.That ‘aint arguin’ man. That is just a wimpy little smokescreen. I can smell the sulphur.>> Perhaps a New Years resolution would help?Our New Year was a couple of months ago. It is called Rosh Hashanah. We do not go out and get drunk and “happy”. We pray to G-d to amongst other things, convert Pagans to Noahides.Try t-h-i-n-k-i-n-g more and f-e-e-l-i-n-g less. Then you will see how the current crypto currency fad is a dishonest scheme and how Fred is using you and other AVC.com literati to burnish his reputation.
You are mostly arguing my case re: this blog doesn’t attract a deep science readership but that is where VC is heading, which means Fred recycles a limited topic set. And, he cannot do US politics, as it frustrates him immensely.The idea that I am on Fred’s playbook is pretty funny. I believe I am one of 2 people who were nearly ostracized from the AVC community about a year ago. So, you comments indicate a lot of emotion but not a lot of information.Not a non sequitur, a reasonable comparison. IVR a feature not a product, which very well may be what Blockchain turns out to be (i.e., Brinks selling secure internal transaction platform to major global banks).You are certainly willing to tell me that my argument is invalid and then make the same argument ( IVR v. Crypto ).You accuse me of not knowing things then make statements that have no factual basis either. At least my statements are based on meetings with Fred and a decade of monitoring his track record. You?Fred is already right, He’s made a boatload on crypto already (why don’t you ask him) and he is been promoting taking stakes off the table for over a month. He stills owns a part of his stake in Twitter, but not 80% of it. Arm yourself with publicly available facts.Plus, can you please make up your mind on whether Fred is shilling to cycle up more profits or if he has dumped and is no longer pumping?Arguably, this comment is not rational.Its pretty hilarious that you are ramping up on me being a Crypto shill – I am one of the few voices here that sees no broad adoption path nor do I see a mainstream value proposition.If you don’t like the crowd, find a new place to spend your time.Shrewd is applied wisdom, When you collect some wisdom, you will want to acquire judgment and become shrewd. Trust me, I am further along the path than you.Easy to use wimpy via the internet. Come on down to Houston, let’s get together and see how tough you talk. Again, shrill is easy, especially online. I stand behind my comments – as Chris Rock says ‘Hurt people hurt people.’I am not a fan of religions that have conversion at their core – they are not faiths, they are political movements and should be treated as such.No one has ever accused me of feeling too much and thinking to little. You need to do a lot of homework, on almost every topic.The good thing about AVC is this; if you do your homework and can be rational, more times than not you either learn new things, convince a few strong minded people of your view or just generally stretch your brain. All good results.You should try it.
I like trout and ries, but duopolies aren’t necessarily the natural choice -see for example, water to your house
Your point is well taken. There are some markets that have constraints. That being said, here in TX we have competitive electricity markets and multiple cable providers, but just not very many of either.Tech is almost completely unconstrained, which is why dipoles occur so quickly, IMO ( I always think that you should never have to add IMO, but…).BTW, liking Trout & Ries isn’t the point. They are right!!!!!Happy New Year!
I’m super interested in ideas and thinking around how this entire model could get blown up. It really feels like somewhere in the intersection of blockchain, decentralized networks and apps, platform cooperatives and cryptocoin there’s a new way to return value to the people who make these services valuable in the first place, without making the ROI too small to be interesting to entrepreneurs.Too many of the current efforts that I see right now seem like just a different spin on subscriptions or patronage (“now with cryptocurrency!”).Anybody have suggestions about who I should be following, reading, etc. in order to get a better view into the future here? Thanks for any ideas.
In 2017 american companies invested $83 billion linking people to products. What was the success rate of people doing a transaction after clicking the ad? And all other people that did not buy anything after clicking the ad – how many hours did they waste? How many hours of work is lost because of online distraction? How many seconds do people waste for every webpage being loaded because of ad networks? There must be a better way…
Philip Sugar is getting close to the business model that I trican d to launch, specifically a consumer data union (ourdata.us); think eBates for data but we couldn’t get enough traction.Problems for anyone looking to do it better than we did1. Consumers want to get paid yesterday. It’s only ~$5/quarter but that’s a lot at scale and we don’t have affiliate commissions to make the process smooth unlike Ebates2. Publishers are scared of poking the Teo bears of the duopoly3. Large players at spots 3-15, like Alibaba, Amazon, Microsoft, Apple, etc either didn’t want to upset the “Apple” cart, or I was incapable of communicating the value prop well or the timing was offIf anyone’s interested I’d love to help someone else on this projectUnfortunately I even approached Albert who I personally saw as the perfect sponsor but alas I failed here too. Bringing a consumer data union and the ethos of UBI were our mission
There are a number of clouds forming a ‘perfect storm’ that will disrupt the ad business as we know it. (1) The dramatic growth of browser-based ad blocking (capped by Apple building ad blocking into Safari) (2) The wave of privacy regulations that will follow the EU’s lead with its GDPR and Eprivacy laws. They force companies to explain what private data they capture and who will use it, then get permission from users. Surveys show that when users really understand how their data and activity will be used, less than 10% grant permission. (3) The GDPR has no grandfathering, so all marketing databases that exist today become illegal on May 25 unless users are contacted, told what their data is begin used for, and give their consent. Again, expect single digit opt-ins on this one.So the Ad biz is going to end up with less than 10% of its current data, and an increasing number of browsers are going to stop what’s left from being displayed. That’s what I call “Disruption”! In the long run, lots of bad actors in the ad world will go out of business, and the ads that do survive will be much more functional for both advertiser and user. But the sound of metal grinding on pavement in the ad business will be very loud.
As a digital ad purchaser for many years, you go where the results are. If anyone can produce a platform that (1) delivers a decent cost-per-action, and (2) an easy interface to buy and measure, then the money will go there. The problem, of course, is that these platforms capture 90% of the eyeballs. (For example, I have never been contacted by Duck-Duck-Go. Have no idea what their platform entails.)I personally believe that Google has done enough over the years to trigger investigation. They are simply too powerful and they actually use their “magic algorithms” to fleece advertisers. I have experienced it as well as millions of others. Their “do no evil” philosophy is a crock. At one point I actually spoke to the FBI in Texas about their click fraud issues. (Another long story) I am not a fan of government crackdown – but they deserve some serious attention.
>> We have a digital advertising duopoly.Yes.>> The difference between second and third place is massive.This is predictable.See:https://en.wikipedia.org/wi…https://en.wikipedia.org/wi…https://en.wikipedia.org/wi…>> I don’t want nor do I expect any governmental response to this market failure.The Talmud disagrees strongly with that stance.https://www.torahinmotion.o…>> I want to see the technology industry adopt new approaches to monetization, ideally not attention based models, to combat this.Ah the silver bullet technology to the rescue! That is a fantasy that you and Elon Musk might discuss as you rocket off to a Utopia on Mars.See https://en.wikipedia.org/wi… Lots and lots of new technology with laissez faire led to https://en.wikipedia.org/wi…>> I don’t think subscriptions are the only answer here, as many do.This is fashionable yet irrelevant. The big guys could muscle in on the subscription market if they wanted to with a rollup https://en.wikipedia.org/wi…. Look at Airbnb or Homeaway.>> We need models that support free consumption of media for many reasons.The god of freedom is a popular pagan idol particularly in the USA. Free speech, free consumption, free to be free… leads to paganism (as opposed to Noahidism https://en.wikipedia.org/wi… or Judaism).>> I think the crypto sector has some answers for usNo. It does not.>> but I am also looking elsewhere.You are stumbling and bumbling in the dark. Try some Jewish wisdom. See https://en.wikipedia.org/wi…>> We need new approaches and we need them now.We have old approaches which we have had since Moses and the Jewish people received the Torah at Mount Sinai. The Mishnah and Talmud are two of the main “guidebooks” we have been using since the Romans destroyed the Second Temple.
Well, Jesus told you that! And you ignored the jewish wisdom and that is the reason The Second Temple was destroyed!
As Moses taught us, we Jews suffer when we fail to learn Torah and fail to perform mitzvot. That is true. See:http://www.chabad.org/libra…”Aside for the troubles caused by these external powers, the Jews were also plagued internally by tumultuous politics, and they divided into many factions—a phenomenon that ultimately led to the Temple’s destruction and our nation’s torturous exile.”
Very true! And in that drama jews, failing to follow and understand divine message of the holly book, represent all humanity of that time! And is sad that very few understand that not only jews chose Barabbas at that time, to fight roman empire, but again and again we do that many time after Iisus times!
Well, things is moving on cryptosphere to embrace ads also! We have now the brave browser and the BAT token, BAT = Basic Attention Token:”It is a utility token based on the Ethereum technology that can also be used as a unit of account between advertisers, publishers, and users in a new, blockchain-based digital advertising and services platform. The token is not a digital currency, security or a commodity. To learn more about how the BAT platform is working with the Brave browser, please see below.”
Genuinely curious. In what mental model of the world would this reality be given the label “market failure”?
Post #3967 saying that ‘we need new models’ none of which propose any actual ideas. I’d love to be wrong but it feels like there are two basic choices in the market – either consumers of a service pay for the value that they receive (subs in some form whether Patreon, actual subscriptions, donations etc) or someone else pays to show their product or service to a qualified audience, i.e. advertising.So, let’s either move the conversation past the cliched ‘we need a new model’ exhortation or actually propose some new models, please.
Agree. Someone has to pay and it’s either the end user direct or an advertiser. What other models are there? Co-op type structures where the users buy into the company?I’m a huge fan of Patreon, we’re actually running a campaign there for Horizon: patreon.com/horizonapp
“2016-2019” – these projections are arrived at how?
What examples have you seen where the market will bust monopolistic competition?
.Not since AT&T.That worked out well, no?JLMwww.themusingsofthebigredca…
What about podcasts? I don’t think I’ve bought a single item from a Google ad but the amount of stuff I own from podcast ads is borderline absurd. Though overall am pretty happy with these products.
Interesting point! Podcast ads have my attention far more than anything in search – Maybe I am actively listening to a single stream of information in a podcast versus a barrage of info on the screen.
Podcast ads (many, at least) seem more like content marketing or even joint ventures than traditional advertising. Gimlet’s “ads” (viz. the ones in “Startup”) are really well done, but they put a lot time into them. Most advertisers either can’t or don’t want to invest that kind of time.
Are you SURE you haven’t bought a single item that was shown in a Google ad? Just because you didn’t click the ad doesn’t mean it didn’t influence your spending behavior. (I think I understand your point, anyhow, but if the ad was influential then from the advertiser’s perspective the money was well spent.)
.Not quite correct.The Congress passed the Toxic Substances Control Act and the Paint Hazard Act in 1976, therein creating the obligation for the EPA to promulgate and update a set of rules pertaining to lead-dust hazard and lead-based paint hazard.The Congress also passed the The Residential Lead-Based Paint Hazard Reduction Act of 1992. This dealt with lead paint in Federally owned, assisted and insured housing.Most lead paint is found in pre-1980 housing as it was no longer manufactured thereafter.As part of the normal law-to-rulemaking process, the EPA and HUD were both required to make initial and subsequent rules as science evolved on the subject.Back in 2009, the EPA began to solicit a series of public comments — a requirement any time rules are established by a Federal agency. Such rulemaking commentary delayed the implementation of the JOBS Act for 3+ years.Several public good enterprises sued the EPA because it was, in their opinion, taking too long to promulgate the NEW rules. They contended the EPA had been messing with rulemaking for 8 years. The new rules were necessitated by the findings of required scientific studies under the original laws.During the law suit, the Obama EPA answered discovery by saying it would take six additional years to promulgate the new rules. The complainants said the EPA had been studying the new reports for 8 years meaning the EPA wanted a total of 14 years to promulgate the new rules.The 9th Circuit Appellate Court said it has taken too long since 2009 to promulgate rules and issued a “writ of mandamus” — a court order for a Federal agency to take immediate action.The Order itself gave the EPA 90 days to propose a new rule and one year to issue a final rule.The Obama admin, June 2016, attempted to placate the parties by updating/amending the Toxic Substances Control Act (The Frank R Lautenberg Chemical Safety for the 21st Cengtury act) without in any manner accelerating the rulemaking.The 9th Circuit ruled that the Obama efforts were a charade. All the filings in the case were completed in the Obama admin while the Court ruling was just released.The Trump EPA met its obligations under the revised Toxic Substances Control act in June of 2017. These obligations were set out in the June 2016 revision.The Trump EPA, which inherited this from the Obama EPA, has always said it would have no problem promulgating a rule, but this did not forestall the appeal, which took more than a year to be ruled upon.https://www.epa.gov/newsrel…This is a perfect example of how the entrenched Deep State does not do its work. During the 8 years of the Obama EPA, they promulgated tons of rules, but no rules on lead paint.The lead paint hazard is now, essentially, reduced to the renovation of existing building stock as the paint hasn’t been made since the early 1980s.Lead paint is very easy to identify. Any painter with a little gray hair can recognize it by sight. It can be identified by a field test or a lab test.You have to wear a free breather mask to work on it, but you just sand it off, vacuum the dust up, bag it, and turn it over to a toxic waste handler — no different than how one lawfully disposes of old paint or pesticides.JLMwww.themusingsofthebigredca…
.It seems to me that most healthy competitive struggles end up with a duopoly of winners. Unhealthy competition may deliver a single winner in a field strewn with dead bodies.Even anti-trust M&A concern is blunted by having at least two fierce competitors, so it doesn’t feel like there is much going wrong here.I would even suggest a review of what happened when ATT was busted up because they had a monopoly — not a duopoly, but a monopoly.We created an artificial competitive landscape which then gave rise to subsequent consolidation which essentially returned us from whence we departed.So, color me skeptical as to sending Paul Revere out to alarm the countryside.A quick study shows different routes by which Google, Facebook, Microsoft get into our heads, hearts, homes. And, with different uses.If there is a monopoly/duopoly concern, it is Google owning SEARCH. Hard to get too excited about someone monopolizing a free service, no?As an aside, it is interesting to note that the 2016 Presidential Election saw about $10Billion spent on political advertising with only $1.3Billion going to digital, with 40% of that number going to social media sites.The big winner was cable which saw a 52% increase.Perhaps even more interesting is that the winner, Donald J Trump, underspent his predecessor (Mitt Romney) by $350,000,000 while also underspending his opponent, HRC.The big filler was TWITTER which Candidate Trump used like a boss. Twitter, for free, elected President Trump.If you want to get into the weeds, the Russians, over a 18 month period, are reported to have spent somewhere between $20-80,000 — that’s correct — to turn the election for Candidate Trump. That was spent nationwide. Those were some damn good ads.JLMwww.themusingsofthebigredca…
@JLM:disqus As regards concentration, see my comment about it being unnatural above.But to quote Ygritte regarding AT&T, monopoly and consolidation, “You know nothing, JLM.”Whereas I found your comment regarding lead-based paints and inefficiencies of government oversight quite informative, your interpretation of events around the break-up of AT&T and consolidation 15-25 years later leaves much to be desired.First, the US undertook a vertical or logical or geographic separation (long-distance vs local) of the monopoly. The RoW took a horizontal approach to things (wholesale facilities vs retail). The US model was known as “equal access” to the local and long-distance switches in layer 3 of the “voice stack”. We didn’t touch layers 1-2 at the edge, only at the core, where we mandated resale of AT&T long-lines. The former approach gave a fair advantage to new entrants, while the latter approach left the monopoly in charge.We spawned the internet in the process.Second, the US also made sure that wireless would develop unfettered from govt’s big hand in two ways: a) we didn’t mandate specific protocols in the 5-7 competitive wireless networks (very few countries had more than 4), and b) we provided “free”, junk spectrum with only a minor “power” stipulation. As a result we got the iPhone and 70-80% of all internet access (quantitative) on shared, public, not private spectrum.So US vs RoW, 3-0. And all pretty much unintended with technology that was either developed elsewhere or for government (military) purposes. Fancy that.All of this took place over 60 years until the Telecom Act of 1996 mucked everything up. And that resulted in the FCC undoing the equal access in the early 2000s, which drove the final wave of consolidation in the mid-2000s.And we didn’t end up where we started. We pretty much have a set of broken business models at the edge that are being sustained by inefficient and asymmetric government regulation. The recent net neutrality ruling is perfect example of regulatory capture.
To what extent do you think that something like the Basic Attention Token (BAT) can help solve this problem?
Just for food for thought, I would like to know, what percentage of this ad spend has actually been proven to have a positive ROI? There are a lot of brand advertisers out there, just throwing money at where-ever there are eyeballs. If this is the majority of the ad spend, then it’s just a matter of getting eye-balls.There are even certain types of businesses that so routinely spend money on advertising, they no longer question where it goes: it merely becomes a line item in the yearly budget. NPR did a segment on this.However, for those businesses that can and do justify their ad spend with a proven ROI, an ad platform needs to deliver results, which is a lot more than just getting eyeballs.
There are much better alternative monetization models to ads, which aren’t being explored because of entrenched interests.I will contact you about it. Don’t want to post them here.Will say this: the problem with ads is that they often don’t match user intent when displayed. This is especially true on social media, where users intend to post and socialize online. That’s why Google makes so much more than Facebook, despite FB having much of the user’s interests, friends etc.
“Don’t want to post them here.”Why not?
My startup is still in stealth mode on the new features
I’ll play the role of the socialist French:What about a tax on each Internet connection ($5/month probably), means-tested, paid back to content providers according to some rules (pageviews, time spent, non-commercial…). Minitel worked that way, and worked well, I still remember the humiliation of having to ask the Minitel guys to fund my raffles when I was selling ‘net-TV integrated stuff.I’m sure it’s complex to set up, there’ll be abuse… But there already is.Side benefit: a smidgen of that money could be used to fund a centralized ID/SSO that’ll take our ID info off the clutches of incompetent corps.
Off-topic: now that Disqus is off your hands, can you elaborate on why comment rating systems are so rudimentary and one-dimensional ? I’m always frustrated I can’t “disagree” with “insightful” comments, must +1 jokes same as learned treatises… Is that gross negligence on the pat of the comment systems providers, or are users really turned off by the added complexity ?Also, why no self-rating of comments ? I’m usually aware of when I’m trolling, venting, positively engaging, joking…
Would like to see similar chart based on overall worldwide advertising revenues.
BAT is trying to solve this problem
Marketing worldwide is a trillion dollar business (~ 1% of global GDP). Strangely enough, it has stayed at the 1% level for the last several decades… Of course, the composition of the spend has been constantly changing through the decades (print, tv, radio, digital, etc.) depending on where consumers are spending their time.Within digital advertising, we need to distinguish between pull that is initiated by the customer (search) vs. push that is initiated by the advertiser (web display ads and native ads on FB and Twitter). Push and Pull have very different characteristics.Advertisers know digital advertising is broken at multiple levels (fraud, flawed measurement, wasted impressions and clicks, etc.), but they still see it as better than other more opaque alternatives.So, when will the status quo be replaced?When consumers have better tools to express intent and connect them with experts, brands, and providers, thereby making demand more transparent.These tools and systems that provide the customer agency and connect them to the world around them are yet to be built. The hope is that the blockchain will accelerate the development of these systems.
I think those estimates depict a very low estimate with respect to Amazon’s potential. If you are looking for new advertising models, I’m sure, AMZN will deliver that to the marketplace as well. When I evaluate capabilities and resources, along with market growth and execution, they stand top on my list.By 2019, I would expect Amazon first, Facebook second and Google third. The most relevant consumption platform will win this sector.
This reveals a breakdown in the normal pareto distribution we find throughout nature. The 3rd player should be ~$12bn and the 4th, $6bn, with a healthy long-tail consisting of dozens to hundreds of other smaller (typically more generative) players. Instead we see a very rapid drop-off in the pareto frontier towards the origin and a short tail that approaches zero rapidly. Why is this? 2 reasons: a) the internet lacks an inherent settlement system and b) inefficient or asymmetric government regulation elsewhere in the informational stack (including access, address portability/ownership, individual privacy, etc…).
Problems in 2018:1)advertising space is shrinking,consumers exclusively present on smartphones 2)consumers irritated by ads presence and skipping all ads,including the ones they enjoy 3)advertisers do not have any other alternatives to reach consumers but through least transparent duopoly platforms mentioned. Solution is bringing more enjoyable content to consumers and rewarding(motivating) them. I have developed an innovative App, platform where I implement new patented method of watching video ads, matched with consumers profile. Reward for seeing the content is alternative ridesharing service. So basically a number of advertisers pay to present their Ad on consumers smartphones and in exchange consumer(now rider) has a payment free(promotional) ride. We believe this can revolutionize marketing world and ridesharing as well. IT IS TIME TO PUT TO AN END TO THIS DUOPOLY! Here is more info to who might be interested https://advertising-info.in… and inadrive.com
I think part of this is how things are shipped. If you had to find tiny boxes in a truck it would be tough.Still though it bothers me to see how many boxes and packaging we throw away at the office. Take away the prime tape and stack and fill the others with the inflatable protectors.I think a ton of “green stuff” is crap. See how that battery for your Tesla got made: https://www.wired.com/2016/…