Presumably because the ads are already hyper targeted, because the site is written in Dutch! Now imagine you run an English ad for say, a local micro brewery in LA. It's totally obvious that you don't want to waste money on people who don't drink, don't live in America, or are 12 years old.
Clearly there's significant diminishing returns to how specifically you target, but it's completely ridiculous to claim that untargeted ads are even a fraction as good.
I think the implication is that using the context of the page to serve ads to users (i.e. you're reading an article on beer, so I'm serving you an ad about beers) is better than using context about the user to serve ads (i.e. you're reading an article about beers, and I'm serving you ads about that one item you've searched on Amazon last week).
> I think the implication is that using the context of the page... is better than using context about the user
I think this is largely true. My favourite ad-supported site is The Online Photographer, a blog on photography which has ads about... camera equipment. No tracking or 3rd party script required.
You don't need to chase the user, retarget them to death, etc. Cool, you're tracking your user and showing them shoe ads over a tech blog, a news website and a pet care website. Doesn't this sound weird to you?
Micro-targeting is good money for the ad brokers, not the advertisers nor the publishers
One of the advantages of tracking users is to optimize your spend, taking into account your reach and the frequency a user see's your ad.
The result could be during one month you're seeing a Guitar Brand Ad in your favorite music blog, and you're a saxophone player. Yet the ad was shown to you 30+ times, when in reality it could have been capped to 10-12 times.
Some brands can afford this wastage, and factor in for it - hell some brands thrived with wastage (like those who grew in TV golden age, for example P&G) - but for a lot of them, this is too much.
Is it really wasted though? Back when I still bothered to watch TV with ads, I felt like seeing the same ad for the same product dozens of times per day had a brainwashing effect. It gets into your head.
At the very least it creates brand awareness and you're unlikely to forget about the company or the product. It also forms a strong association between the subject (in the parent's case, professional photography) and the brand/product.
Even if it doesn't result in a direct sale it might still be highly beneficial for the brand.
I mean if it wasn't, would we see so much product placement in movies and TV? Those are not proper ads, there's no call to action, the viewer has to go looking for the product if they like it. But it does wonder for brand recognition and prestige.
>Is it really wasted though? Back when I still bothered to watch TV with ads
The world was a very different place back then. Where the majority of "housewives" (as in the person who makes the decisions - and bought - all house purchases) were actually the wives, and ad jingles was part of the soundtrack of our existence. Attention was less split and focused mainly on TV, and fewer players had access to it.
And you're right, it did have a brainwashing effect, and I bet to this day you still know the lyrics or you can hum songs from jingles, or you know brand claims by heart. People underestimated that.
But still like you, hundreds of million of people never consumed, became customers, recommended or influenced any decision for a lot of those brands - but for those brands it was still worth it. It was part of their business model - mass media + a big share of shelf in large retailers. Coca Cola Company, P&G, Mars, and many other mammoths grew with this.
>I mean if it wasn't, would we see so much product placement in movies and TV?
The problem is that TV is different from the Internet, still to this day. Just because they share the same type of media (video), it's different how you watch and how you manage your attention.
A banner in a website is very different from a spot in break on a TV show. Even a preroll on youtube is different from a tv spot - because if you're not watching the tv spot and you're fiddling with your phone, the sound is there, and it grabs your attention for a fraction of time.
I'm not saying that high frequency doesn't work - it does work very well! Does wonders! But wastage makes it expensive, and it works differently depending on the media..
There are no primary exchanges for targeting content.
You can't 'put your ad near an article for beer' at any real scale.
In the old days, if you were paying $$$ for a spot in a magazine, you might be able to control where your ad was going to be placed, and certainly today, if you want to do that, you can find ways. Certainly you could buy ads on a 'beer blog'.
But by and large, this doesn't exist at any meaningful scale where you can just go out and buy 'a bunch of ad spots in articles about beer'.
Second - it's something, but still arguably not more effective than individual targeting. Most products and service have baseline demo. targets and that's quite important.
If you're L'OREAL you really don't want to be hustling your new eyeliner to middle aged men, that's pretty much a 'first order concern'.
Targeting does mostly work, we should not be in denial about that.
> and I'm serving you ads about that one item you've searched on Amazon last week)
As a side note, Amazon is not that big yet in the Netherlands so it would probably be something searched on Bol.com.
The problem I'm having with ads nowadays, besides that they are indeed often out of context, is that they are far to late and outdated. Because most times advertisements for a product start to appear when I already bought said item. So for me if they do tracing in a sense I'd rather have them double down on it and provide real 'value' to me in their ads. But I still prefer no tracking at all.
But they can’t predict the future so the ads will always be bad.
Targeted ads would probably work best in categories of things that you buy regularly, like snacks. I’m not sure how they’d get that sort of information though.
> Targeted ads would probably work best in categories of things that you buy regularly, like snacks.
If you show me an ad for something I already buy regularly, are you hoping it will cause me to increase my habitual amount? That doesn't really sound like an effective ad.
Nearly every beer drinker in the US has heard of Budweiser, yet they still spend millions on advertisements. It may not work on you, but they are definitely getting a return on that investment or they wouldn't keep doing it.
It will be partly to attract new (young) customers to their brand and also to reaffirm the brand image with existing customers.
You see this a lot with car commercials. You won't buy a car after seeing the average car commercial. Most of them don't even explain why you should buy a specific car over another. They focus more on the aesthetics. They sell you the idea of being part of something by driving a car of this brand. And even if you have already bought a car for that brand, seeing a commercial again reenforces your binding with the brand (given you feel positive about the commercial message). This works really well with cars as for most people they are emotional irrational purchases.
Maybe the core competency of advertisers is to convince businesses their services have value, not to convince consumers that products have value. The later is done only insofar as it's necessary for the former.
Also if I were to see ads for something unrelated in my city on a small LA brewery web site I would feel a bit suspicious. Instinctively I still consider websites as publishers of their own ads, so if they show ads for things completely unrelated to their service/page I judge them negatively for it.
If top HN comment completely misses the point on targeting and shows zero understanding what does it mean, and also considers "site is in Dutch" as "hyper targeted" what chance have an average marketer to properly set targeting goal for an ad?
Average site can profit more from untargeted ads than from the wrongly targeted ads set by the "ad experts", especialy after saving the costs of hiring such "experts".
Funny or not, you have to take into account HN context (ah!), where the great majority of users thinks marketing is a scam and hate advertising (here comes the downvotes...) - and they have reasons to feel like that. We've been flooded by bad professionals that give a bad rep to the craft.
They can profit more because they don't need any third party tech provider that take bites out of their inventory margin, or are not being forced into bidding their inventory and they set the prices they want.
It's smart on the publisher part, but they end up falling into 3rd parties because of the times they have inventory not being monetized (money lost).
For centuries publications sourced ads to finance them just by themselves. But suddenly we got those worldwide ad auction houses that monopolize the market, and now nobody can source their own ads anymore, because the buyers are all on the auction houses.
They shouldn't have more unsold inventory than if they got the alternative.
You make a good point about the marketplace dictating the market.
In my hometown there is a weekly newspaper that is still going strong, that can support a half dozen employees, etc. All with direct ads for B2C and B2B local businesses and legal notices.
It's interesting, as that business model would absolutely not work with an online platform, as it's a general interest publication that's highly local. There's no way for the local high-tensile fence contractor or well digger to generate ROI on Google. Ditto with the supermarket -- the weekly ad in the Sunday paper is very effective IMO, and superior to the online presentation in almost every way.
I think a lot of publishers preferred short term gains over a long term position... For some it was a conscious decision (as a strategy, or out of need), others thought of it as an easy cash grab.
Google, Facebook, they all gave credits/financed publishers to give them a perception of more reach, but the end result was the dilution of publisher brands and gradually lost their leverage.
Maybe Google, Facebook and Amazon were always going to be unstoppable forces in the market... but maybe, just maybe, if publishers stood their ground we would have a different narrative. Probably the cost would be too big, and many would fall... Who knows.
I guess it was just too easy and too good, free money, a way to convert inventory automatically without the need for sales teams and the pressure to have it maximized.
HN has poor understanding of ad-tech. If you aren’t in the industry, a quick coherence check is “if you’re right, you could be a millionaire next year by starting an ad agency this year, so why aren’t you doing it”.
Ads are like politics, sociology, or parenting. Everyone has what they think is an informed opinion but very few are informed. If one were to ignore every statement on ad tech posted on this site they’d be more informed than I if they read any.
Except that Mani Gandham fellow, who anyone else in ad tech will recognize as knowing the industry. I don’t know him personally except through his posts here.
But don't forget the FANGS are regulated by the USA and 18 year olds "drinking beer" (even serving troops) will lead to some serious necklace clutching by senators and congress persons.
Makes a good point not all countries regulate alcohol in the same way.
Most might not know this but brand x in the USA may be different to Brand X in the UK they may also have different names or even totally different brands - makes geo targeting really hard
I was talking about Belgium (note how that site is in Dutch and the number of 6 million approx. matches the number of people speaking Dutch in Belgium, while it doesn't match the number of people speaking Dutch in the Netherlands at all).
Why would it be a waste of money? If the market is such that there is an ROI for telling a global audience about your microbrewery, why not?
Most of the tracking issues are IMO about making more inventory available to platforms and have little to do with advertiser needs. I'm not in the business, but I remember in the olden days, the content-centric nature of Google AdWords was the magic.
In a perfect world, I'd see ads for brewpubs in my town. The reality is usually some sort of lame Amazon/Ebay/etc retarget attempt. These ads are low value and low revenue -- they are the equivalent of the Karate Dojo in a rundown stripmall.
>It's totally obvious that you don't want to waste money on people who don't drink, don't live in America, or are 12 years old.
This is a problem when you're trying to advertise in the garden of the advertiser's own making (ie Facebook). Otherwise, you're not going to be advertising your microbrewery on a children's blog.
>but it's completely ridiculous to claim that untargeted ads are even a fraction as good.
Advertising has never been truly "untargeted". I think the onus is on the targeted marketers to produce the data that their results are orders of magnitude better.
There's a pretty significant difference between tracking and targetting. It's pretty easy to limit an ad to a geographic area and target audience (to some degree of accuracy), you don't need to store any personal information to achieve this. However that is very different from tracking someone's identity to figure out their date of birth, nationality, and whether they drink alcohol.
You need to take into account what Google charges for giving you the opportunity for somewhat accurately targeted ads. Clearly, it can be cheaper to just show ads for everyone if Googles fees are to high for the value Google provide.
Clearly there's significant diminishing returns to how specifically you target, but it's completely ridiculous to claim that untargeted ads are even a fraction as good.