mfioretti: google* + online advertising*

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  1. Mark Zuckerberg also launched Facebook with a disdain for intrusive advertising, but it wasn’t long before the social network giant became Google’s biggest competitor for ad dollars. After going public with 845 million users in 2012, Facebook became a multibillion-dollar company and Zuckerberg one of the richest men on Earth, but with only a promise that the company would figure out how to monetize its platform.

    Facebook ultimately sold companies on its platform by promising “brand awareness” and the best possible data on what consumers actually liked. Brands could start their own Facebook pages, which people would actually “like” and interact with. This provided unparalleled information about what company each individual person wanted to interact with the most. By engaging with companies on Facebook, people gave corporate marketing departments more information than they could have ever dreamed of buying, but here it was offered up free.

    This was the “grand bargain,” as Columbia University law professor Tim Wu called it in his book, The Attention Merchants, that users struck with corporations. Wu wrote that Facebook’s “billions of users worldwide were simply handing over a treasure trove of detailed demographic data and exposing themselves to highly targeted advertising in return for what, exactly?”

    In other words: We will give you every detail of our lives and you will get rich by selling that information to advertisers.

    European regulators are now saying that bargain was a bad deal. The big question that remains is whether their counterparts in the U.S. will follow their lead.
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  2. Quando Facebook dichiara un miliardo di utenti, il mondo non sarà mai più come prima: ogni azienda deve esserci, attratta dall’idea di poter mandare messaggi gratis ai propri fan. Ben presto non più gratis, bensì pagando, per la gioia degli investitori.

    Il confine fra contenuti e pubblicità sembra ormai un ricordo del passato.
    Il futuro è la televisione

    Google e Facebook continuano la propria corsa, all’apparenza inarrestabili. Negli Stati Uniti, il duopolio porta a casa 3 dollari su 4 della “pubblicità” (si fa per dire: è direct marketing) su Internet, e addirittura il 99% dei nuovi investimenti sul web.

    Il problema è che questo filone aureo (si fa per dire) si è ormai esaurito.

    Google e Facebook hanno un rapporto price per earning che è il doppio di quello di altre aziende media americane, ma non hanno più praterie davanti a sé da conquistare e facili e prevedibili guadagni futuri che possano giustificare un elevato rapporto P/E.

    Per difendere il proprio titolo in Borsa, devono attaccare la pubblicità di tipo brand.
    E la pubblicità di tipo brand non va sui banner, non va sui social e non va sui video delle Mentos, bensì in televisione, su programmi come serie TV, film e sport.

    Google o Facebook dovranno reinventarsi come produttori di contenuti di qualità, come ha già iniziato a fare Netflix. Ma che vantaggio competitivo possono vantare Google o Facebook su Disney (ABC), Comcast (NBC), Viacom (CBS) o Time Warner (HBO)?
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  3. d (and turned down) syndication offers from two different newspaper syndicates, including one of the biggest in the business, because I wanted full control of True’s publication rights — including its online presence. And as of today, I’ve turned off Google’s “Adsense” service on this site for the same reason: to assert my control.

    Weekly Weird News

    Subscribe Free to Randy's weekly weird news newsletter. Your privacy is his policy.

    Your e-mail address:

    Optional: Where did you hear of This is True?

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    Because I’m sick and tired of Google sending me warnings that my content doesn’t “comply” with their “program policies” — such as their ban on “strategically covered nudity” (um, isn’t all clothing a strategic way to “cover up nudity”?!),“content that may be sensitive, tragic, or hurtful,” or “descriptions of sexual acts.”

    Which may sound perfectly reasonable until you realize just what kind of editorial material it is that they’re sending me these warnings about.

    First, realize that every actual story featured in This is True is a stylized, rewritten summary of an article from a “legitimate, mainstream news outlet” plus our editorial commentary — not tabloidy garbage but real news articles, mostly from daily newspapers and TV news stations reporting about real issues.

    The money Google pays out for showing their ads is just not worth it to continually go through this back-and-forth hassle. I’m giving up on these battles, but I’m declaring victory in the war by the action I took today.
    Declaring Victory

    Actual ad Google has shown on this site.Well, I’ve had it. As of today, I’ve removed all of Google’s ads from this site in favor of sponsorship from companies that have the guts to support True’s thoughtful exploration of the human condition — even if the topic is, at rare times, “sensitive” in nature.

    Note I’m not demanding that Google not have standards. It’s their product, and their name, and I’m sure there are sites trying to make money with Google’s ads on actual sexually exploitive content. But this sure as hell isn’t one of those sites, and they don’t seem capable of discerning the difference between sexual exploitation and actual editorial discussion of real-world issues, nor do they follow their own rules when they put objectionable images on my site.
    In Google’s Place: Sponsorships

    Actual ad Google has shown on this site.Rather than continue to fight this battle with an unthinking, undiscerning 800 lb. gorilla, I’m soliciting sponsorship from companies who appreciate my frank discussion of thought-provoking issues.
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  4. According to the paper, this wireless exec is considering a plan that involves blocking Google ads on millions of mobile phones “in an attempt to force the company into giving up a cut of its revenues.” His carrier would snuff Google’s ads “just for an hour or a day,” the exec tells The FT, saying this would be enough to bring Google to the negotiating table.

    It’s a ridiculous plan. Blocking ads in this ham-fisted way would spark an enormous uproar among public advocates and in the press on both sides of the Atlantic. After all, it would violate the idea of net neutrality—the notion that all internet traffic should be treated equally—and it may even qualify as censorship. But this is almost beside the point. The bigger issue here is that this plan has exactly zero chance of bringing Google to the table. The web’s most powerful company is not
    about to negotiate away the business model that drives its entire online empire

    “People pay for mobile internet packages so they can access the apps, video streaming, webmail and other services they love, many of which are funded by ads,” Google said in response to The FT story. “Google and other web companies invest heavily in developing these services—and in the behind-the-scenes infrastructure to deliver them.” Google would fight this in court, not at the negotiating table.

    The more realistic possibility is that this European carrier—and others like it—will install ad blocking tech in their data centers and then give smartphones owners the option of turning it on. In terms of net neutrality, such a thing sits in a (slightly) grayer area. The FT says this is on the way as well, reporting that several European carriers are set to deploy ad blocking tech from an Israeli company called Shine. Shine says much the same thing. “The story is accurate,” company spokesman Roi Carthy tells WIRED.
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  5. The natural order of the universe was disrupted yesterday when BuzzFeed, NBC News, the New York Times and a number of other prominent media companies shockingly ceded to Facebook the marketing and monetization of portions of their valuable content.

    The move, which represents a further step in the transfer of power from the media tribe to the technology tribe, means that some of the biggest names in media have conceded that they are neither large enough nor strong enough to thrive as independent digital publishers without the help of at least one of their fearsome frenemies in Silicon Valley.

    In addition to Facebook, the other frenemy, of course, is Google. Although the media companies like to think that the quality of their work speaks for itself, Facebook and Google referrals steer the preponderance of the traffic to almost every news site.

    The Facebook deal institutionalizes as never before this long-running dependency.

    Difficult as the decision may have been, it was inevitable, given the several critical capabilities that Facebook has developed. These are its not-so-secret superpowers:

    Superior mobile prowess. In addition to the sheer size of its audience, Facebook has mastered the art and science of mobile publishing better than almost anyone. In the first quarter of this year, the company reported, 65% of its traffic and 73% of its ad revenues came from such highly optimized mobile sites as its Paper app.

    Superior audience engagement. Based on the amount of time people spend on Facebook, it is fair to say its users are considerably more passionate about the service than the visitors to a typical news site. According to Alexa.Com, the average user spends 18.4 minutes per day on Facebook, as compared with 9.5 minutes at the New York Times, 6.4 minutes at NBC News and 5.4 minutes at BuzzFeed.

    Superior customer data. Because enthusiastic users frequently and liberally update the site with a plethora of personal data, Facebook knows more intimate and accurate details about more people than any company in the world. The information is updated dynamically in real time, as people report everything from their favorite new song to the jeans they want to buy to the fact they will have a baby in six months.

    Superior ad intelligence. Facebook enables advertisers to target messages with heretofore unprecedented precision, thanks not only to the rich information supplied by users but also by analyzing information captured from the friends in their networks.
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  6. we know for a fact that companies like Google are giving corporate advertisers access to users based on the personal data they control -- and many of those advertisers are targeting individuals with the express intent to rip them off, sell them deadly products, and financially impoverish them.

    Some advertisers are just trying to help customers find a product they might like, but the dark version of online marketing is that it can facilitate what economists call "price discrimination," selling the same exact good at a variety of prices in ways unknown to the buyers. Researchers Rosa-Branc Esteves and Joana Resende highlight how with the low costs of online advertising, such online price discrimination systematically shifts wealth from consumers to corporate profits. One implication of their models is that "average prices with mass advertising i.e. without the discrimination allowed by targeting individual users online » are below those with targeted advertising," which follows the idea that firms will target certain consumers with promotions while enjoying higher prices paid by consumers kept ignorant of lower prices offered to others.

    Early Internet visionary Jaron Lanier, who pioneered ideas like "virtual reality" two decades ago, has noted that such access to behavioral targeting has even more appeal to the "tawdry" kinds of firms than the "dignified side of capitalism", since "ambulance chasers and snake oil salesmen" among the capitalist class thrive on such targeted access to their victims.

    Google isn't usually identified as a big player in the subprime mortgage debacle and its aftermath, but a significant portion of Google's profits in the mid-2000s were coming straight from subprime mortgage lenders advertising on its site. As Jeff Chester of the Center for Digital Democracy said back in 2007, "Many online companies depend for a disproportionate amount of their income on financial services advertising, with subprime in some cases accounting for a large part of it."

    Companies enticed customers with unrealistic "teaser rates" -- heavily advertised online -- that burdened borrowers with toxic terms and unmanageable obligations that exploded in later years. And as the racial and exploitive aspect of the mortgage meltdown was endemic with what some scholars described as reverse redlining, "the practice of targeting borrowers of color for loans on unfavorable terms." This offering of differential rates based on the characteristics of the borrower constitutes the most damaging price discrimination inflicting consumer harm in American history, for which Google played an integral (and profitable) role as an advertising intermediary where it was earning billions of dollars a year in that role.
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  7. It’s true what Ben Thompson of Stratechery says: Google today is very reminiscent of Microsoft in the 90s. They too were the beneficiary of a seemingly endless, unassailable, firehose of money. But instead of spending that money on moonshots, Microsoft became a much-loathed corporate predator that wasted colossal amounts of time and money on infighting and horrors like Microsoft Bob and Windows Vista. Why has Google apparently taken a few steps down that cursed primrose path? Why is Mountain View in danger of becoming the new Redmond?

    Why indeed. It turns out that Google is literally the new Microsoft:

    (And we’re not just talking about low-level engineers here. Vic Gundotra, the former head of Google Plus, was a former Microsoft executive; which kind of explains a lot.)
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  8. Google revenues will slip.
    2. Wall Street will punish the stock.
    3. Analysts will blame Google's "failed social strategy."
    4. Google will respond by making a bid for Twitter. The combined stock-and-cash deal will probably top $40 billion, yet will be seen by some as cheap.

    Along the way, there will be layoffs. Google's R&D and G&A spending are out of control.
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  9. Retargeting is another recent trend in ads. Rather than just targeting ads based on what you do on a service, sites can track the cookies left by other sites you’ve visited around the web. That means if you almost bought a flight to Hawaii on some travel site, Hawaiian Air might pay Google, Facebook, Twitter, or LinkedIn to show you an ad for a discount on that same flight in hopes that you’ll pull the trigger.

    But now, it’s not just your data being invisibly used to target ads. Your content and identity are being used as ads.

    Screenshot 2013-10-11 at 12.10.17 PMGoogle is doing it in the most respectful and responsible way. You can completely opt out of having your content used as ads. Facebook lets you opt out of being used in “social ads” that display your name next to ads, but you can’t opt out of Sponsored Stories that use your content as ads. Twitter doesn’t offer any way to opt out of your name being used in ads (though you can opt out of being shown personalized follow recommendations and retargeted ads).

    Companies have to choose between the health of their business and the freedom of their users. If they let people opt out easily, their ads will be less effective, and they’ll make less money to spend on building their products.

    So in some ways, by not opting out of being used as social ads, you’re being generous. You’re saving your friends from irrelevant ads for things they don’t care about.

    Maybe everyone should follow Google’s lead and give you the freedom to opt out of having your name, face, and activity turned into ads — even if it hurts the companies providing free services and your friends who use them. If you want to utilize the opt outs offered, go right ahead. Update: It’s your right to say you won’t have your identity leveraged and that these companies can find another way to make money. Maybe they should. »

    But before you opt out, remember, you can choose to make ads better for everyone else.
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  10. Frédéric Filloux reports at Monday Note that two groups of French publishers, the GESTE and the French Internet Advertising Bureau, are considering a lawsuit against AdBlockPlus creator Eyeo GmbH on grounds that it represents a major economic threat to their business. According to, EYEO, which publishes Adblock Plus, has developed a business model where they offer not to block publishers' advertisements for remuneration as long as the ads are judged non-intrusive (Google Translate, Original here). "Several criteria must be met as well: advertisements must be identified as such, be static and therefore not contain animation, no sound, and should not interfere with the content. A position that some media have likened to extortion."

    According to Filloux the legal action misses the point. By downloading AdBlock Plus (ABP) on a massive scale, users are voting with their mice against the growing invasiveness of digital advertising. Therefore, suing Eyeo, the company that maintains ABP, is like using Aspirin to fight cancer. A different approach is required but very few seem ready to face that fact. "We must admit that Eyeo GmbH is filling a vacuum created by the incompetence and sloppiness of the advertising community's, namely creative agencies, media buyers and organizations that are supposed to coordinate the whole ecosystem," says Filloux. Even Google has begun to realize that the explosion of questionable advertising formats has become a problem and the proof is Google's recent Contributor program that proposes ad-free navigation in exchange for a fee ranging from $1 to $3 per month. "The growing rejection of advertising AdBlock Plus is built upon is indeed a threat to the ecosystem and it needs to be addressed decisively.
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