iOS 14 tracking changes sees big ad spending drop, tumbling prices

https://www.imore.com/ios-14-tracking-changes-sees-big-ad-spending-drop-tumbling-prices

by CharlesW • 5 years ago

231 209 5 years ago

imore.com

marvel_boy• 5 years ago

Well done Apple. A little step to improve privacy.

ArkanExplorer3• 5 years ago

It will decimate the ecosystem and have no impact on users.

Meanwhile a world of premium-priced alternatives or subscriptions remains out of reach because of Apple's 30% commission and $0.99 minimum charge, and lack of support for upgrade pricing (although Apple will happily launch competitor apps and take 100% of the proceeds, as well as giving itself premium search positioning).

Some of the biggest companies (eg. Facebook) might just buy carrier user data directly, actually worsening privacy.

an_opabinia2• 5 years ago

It will decimate the ecosystem

I agree it's hard to say how reducing income for app developers of free apps helps users.

scarface742• 5 years ago

Well, on the other hand, we have an existence proof that there are plenty of subscription based offerings in the App Store like Office 365, Adobe’s suite and smaller players who force you to get a subscription outside of the App Store where Apple doesn’t get a cut.

tinus_hn• 5 years ago

It will decimate the ecosystem

If 90% of the ecosystem survives just fine I would call that an unqualified success.

willis9362• 5 years ago

It will decimate the ecosystem and have no impact on users.

This reads like a very big win for users if "the ecosystem" is adtech.

baby3• 5 years ago

Why didn’t they just turn off the feature though? The wording they use “tracking” is so negative no user will ever reply yes to it. Maybe to educate users about privacy?

Ar-Curunir3• 5 years ago

The blame is not with Apple if they choose to truthfully describe what these apps are doing

vorpalhex2• 5 years ago

The usage of the word "tracking" is true.

Apps can still display ads. They may not build a user profile and attach it to your identity across apps.

AgentOrange1234• 5 years ago

It seems somehow just right that an article about this has a super annoying video playing above the content, scrolling with you as you read.

bilal4hmed8• 5 years ago

This is awesome news. We need the web to not be reliant on ads and also build the expectation amongst users that they need to pay for articles/services etc. just like how they would in the real world. This is the first step in doing both

baby3• 5 years ago

Can’t wait for gmaps, gmail, facebook, twitter, hackernews, reddit to have paywalls

bilal4hmed8• 5 years ago

if you want privacy, you gotta pay. Thats how ads disappear. People have to charge for services and people have to pay to access them.

Marsymars• 5 years ago

I would gladly pay monthly to receive Google Maps without ads.

beagle32• 5 years ago

OpenStreetMaps doesn’t have paywalls. In sone things it is worse, in my day to day use it is better, the only thing I use gmaps/Waze/Amaps is for live traffic.

HN has neither paywalls nor ads.

Fastmail has a paywall compared to gmail - and I gladly pay it. There’s no ad supported option ttbomk.

The only two that don’t have a real alternative are the metcalfed Twitter and FB (and the live traffic feature in maps)

majewsky2• 5 years ago

Can't wait for [...] gmail [...] to have paywalls

With my mail service, I pay 1€ per month for my mailbox (on a pre-paid model where I deposit 20€ at a time into my account and get reminded when the balance runs low). That's a price that I gladly pay for the benefit of knowing that I'm actually the customer.

armagon• 5 years ago

"A new report says that iOS 14 tracking changes could cost the advertising revenue billions if an early trend in spending decline continues."

Does it not follow then that advertisers are saving billions of dollars?

Now, admittedly, the advertisers aren't going to be getting now what they used to get, but this Freakonomics Podcast episode, "Does Advertising Actually Work? (Part 2: Digital) (Ep. 441)" https://freakonomics.com/podcast/advertising-part-2/ makes me wonder how much it'll really impact the people who pay for advertising.

bpodgursky• 5 years ago

Does it not follow then that advertisers are saving billions of dollars?

No — if the targeting is less effective, the advertisers are not getting the same incremental value from the ads.

The ads are cheap, but draw in less total revenue for the company, saving nothing. The bid prices are just lower on untargeted ad slots, adjusting to the lower CPM / lower lift.

Edit: Truly, the best part of HN are the Dunning-Kruger programmers who once read a substack post about advertising, and now believe they have deep hidden insight that a hundred thousand marketing professionals, running marketing campaigns as their job, every day, have not figured out — aha, internet advertising doesn't work!

thehours• 5 years ago

Given how rampant ad fraud is in programmatic, I wonder how much revenue actually drops for these companies, relative to the decreased ad spend.

Uber’s [1] experience is one example:

“We turned off two thirds of our ad spend – $100m out of annual spend of $150m – and basically saw no change in our number of rider app installs. What we saw is a lot of installs we thought had come through paid channels suddenly came through organic.”

[1] https://mackgrenfell.com/blog/how-did-uber-waste-so-much-ad-...

chmod7753• 5 years ago

No — if the targeting is less effective, the advertisers are not getting the same incremental value from the ads.

I mean... No again. Kinda. Advertising isn't magically gonna make money appear in the pockets of your customers.

Advertising influences how people distribute their income, influencing them this way or that (at least that's the goal).

If advertising becomes worse for everyone, which it did, those weights are just scaled by a fixed amount, arriving at the same end result.

The only winners are those who didn't advertise at all and only competed only on value. Those may see an uptick.

danShumway• 5 years ago

Maybe you're right. But if less advertising means that less money is going into businesses, then ads don't make products free, because they increase consumer spending and decrease the efficiency of consumer spending. If what you're saying is true, then advertising has a tangible cost for consumers.

There are three possible theories about how advertising works:

A) Advertising increases consumer spending and makes consumers spend dollars less efficiently based on attributes like branding that are unrelated to quality. In which case, all of this "advertising makes apps free" talk has been really deceptive, because consumers who are viewing ads are spending more money for worse/inflated products to compensate.

In this world, it's worth asking what the costs of advertising are and whether we want it to be the primary way of funding the Internet.

B) Consumer spending/efficiency doesn't change, consumers are smart enough to buy the best product anyway, and the only thing that changes is which companies get that money and have brand recognition. In which case, it starts to become difficult to argue that consumers opting out of ads they don't want to see is particularly harmful. In the world where advertising is just making people aware of new information and helping them make informed purchasing choices, then it's probably a good thing that across the board everyone is being forced to cut down on the pointless noise that amounts to companies trying to scream over each other and increasingly hyper-target people in creepy ways.

If advertising does not increase consumer spending, and if everyone is reducing spending and effectiveness by the same amount on iOS, then this should be good for advertisers -- they'll spend less money on ads, and consumers will still spend the same amount of money themselves. The only reason that wouldn't be the case is if highly targeted ads actually changes consumer behavior and spending habits in meaningful ways -- but if we admit that, we need to admit that the advertising industry is a lot more problematic and a lot less "free" for consumers than it likes to claim.

C) Advertising is a public good, and consumers actually want to know about these products, and ultimately people want targeted ads.

But this is obviously not the case for the majority of advertising. If it was the case, than iOS's changes wouldn't be a big deal. If consumers want targeted ads, they have the option to keep allowing them in iOS. The whole reason we're in this situation is because consumers have overwhelmingly demonstrated that they do not want targeted ads.

So at best, the advertising industry can position itself as a kind of metaphorical "vegetable", claiming that everyone hates them but ultimately the world would be better if more things were commercialized. But it's just not a realistic theory, the data is pretty clear that consumers don't like ads and it's very hard to argue that unrestrained commercialism and forced targeting is good for society. There are more efficient ways we could be doing this if our goal was really just to make it easier for people to compare products and learn about new solutions to their problems.

stingraycharles• 5 years ago

On the other hand, for the publishers this may be a net win. I’ve always argued that very narrow targeting mostly benefits the advertisers, and the publishers are left with a very small audience that yields a lot, and a very large audience that is difficult to sell.

Of course, this may not be the case for Facebook et al, but it’s definitely the case for a lot of apps and websites that live off advertising. Now, without super narrow targeting, they are suddenly able to sell a lot more inventory.

dillondoyle5• 5 years ago

It annoys me beyond belief that every single digital ads HN thread this is the most upvoted hot take and it rarely comes from someone working in buy side let alone ads in general.

Good or bad or neutral, FB's targeting specifically works amazingly well and better than anything else for many buyers. Especially for direct response ads.

If you can't make money selling your product from digital ads, you're not saving dollars you're losing revenue. This is true especially for 'internet only' upstart products, for example everyone who gets stuck in for instance a $60 athletic short ad loop as an example!! Sometimes you hear examples here about a new product or kickstarter who pre-this type of digital would probably not be able to launch or it would be much harder.

Brand advertising is different and targeting can definitely argue doesn't matter as much.

But these changes has already changed how we spend money, and we're tiny in the grand scheme.

The other point that always gets thrown out: It's also incredibly simple to measure effectiveness or lift.

Staying with FB as an example, if you are selling a product it can be as simple as using a unique link for your FB ads. ROI = Purchases with that link / FB spend. FB also has a large set of conversion tracking JS and offline like loading your retail conversions to the platform to match.

But given the new rules FB is now 'modeling' ROAS and it has decreased accuracy for us from something like previously capturing 80-95% of conversions to sometimes less than half. This makes a big difference in auto-optimizing on their end and thus our ROAS.

And again sure, it gets complicated and definitely more snake oil to buy some 3rd party ad tech which claims to model across all your channels online and off. A lot of times that's gamed or just a bunch of BS.

But another way to measure is say you're a larger brand buying TV, digital, OOH etc the works. You can simply control by making only one single change segregated to a control and treatment geo/group before and after, measure delta.

rubyfan• 5 years ago

I’m not deep in this space but was thinking something along the lines of your response. If I understand it right, advertisers will lose efficiency here but I’m skeptical that it’ll cost ad networks much because advertisers will still need to reach an audience but will now suddenly be less effective at targeting.

nojito7• 5 years ago

Good or bad or neutral, FB's targeting specifically works amazingly well and better than anything else for many buyers. Especially for direct response ads.

A recent study says otherwise.

https://pubsonline.informs.org/doi/pdf/10.1287/mksc.2019.118...

Do you have any studies supporting your claim that it "works amazingly well"?

karlp• 5 years ago

As someone who doesn't work in advertising but is insterested in the space, I find your comment interesting but it doesn't help you are not providing much data for your hot take either. You mention Kickstarter, but looking at the list of crowdfunded projects, most of the successful ones were quite a while ago, if anything the most recent ones looks like scammy crypto coins, which would suggest advertising works rather for bad projects, a net negative.

https://en.m.wikipedia.org/wiki/List_of_highest-funded_crowd...

morelisp3• 5 years ago

You can simply control by making only one single change segregated to a control and treatment geo/group before and after, measure delta.

Because nothing else is going on in the world besides your ad campaign, right?

Like you I find the comments about the ad industry here on HN largely ignorant, but I also think most advertisers and agencies are dumb as rocks, or at best high on their own supply. Like, a piece of analysis I saw recently had some claimed weirdass causation along the lines of, X days is the optimum period between first indication of intent in a product and showing an ad for that product, if the user didn't convert immediately. They had run an experiment like you suggest with varying intervals for audiences. But, the way better correlation was with stimulus payouts. That wasn't in their model, because their model only had the inputs they controlled, before and after, and measured delta.

Everyone is selling snake oil because every advertiser is demanding snake oil. It's so fucked up.

alkonaut5• 5 years ago

Perhaps I’m naive but my view is that online advertising should have targeting no better than bus stop ads (coarse geographic) and conversion should ideally not even be measurable. When I buy shoes I prefer to not even say which campaign made me do it (just like the bus stop ad).

I find the whole jargon of this post dystopian.

clairity• 5 years ago

in my experience, fb ads are a mixed bag. they tend to give you the illusion of control without the commensurate results, converting at a noticeably lower rate. sometimes prices are low enough to compensate for the lower conversion, but not usually.

though it might be changing with the normalization of the fb marketplace, folks aren't usually looking for the things that require advertising inducement on facebook, so there's a significant intent/context mismatch.

tomjen34• 5 years ago

If Facebook ads are so good, why is it that I basically only get shitty, general ads?

I am a single geek with disposable income, why is my feed not filled with ads for cool tech products? I just checked and the only Facebook ad was for cancer awareness.

eschaton• 5 years ago

Advertising is cancer and it’s a good thing when less money is spent on it and less of it is thrown in peoples’ faces.

The ideal system is one where people pay for services and see no ads on the services they pay for and nobody can monetize their data.

rkagerer• 5 years ago

I come from the user side and I am extremely pleased to hear this news. Advertising on my device has gotten completely out of hand, I never asked for it and I don't want it.

yohannparis• 5 years ago

I agree with you, I hate when news report as "cost", a loss of revenue they never going to get is not a "cost". They just need to adjust to the market.

tormeh4• 5 years ago

The blanket statement "Advertisement does not work", which I really hope is a strawman, is trivially wrong. If you start a new B2C business the only way to do inbound sales is advertisement, as by definition no one knows about your company/brand/products/services. Outbound sales is (usually) impossible in B2C for cost reasons. Almost every successful B2C company is evidence that advertisement works. There are some exceptions like banking and utilities, where the LTV of a retail customer is high enough to do outbound sales, but most B2C companies can't afford this.

iwitaly• 5 years ago

amelius3• 5 years ago

Only under the assumption that no alternatives to advertising exist.

Ban advertising, and suddenly this statement is not true anymore: "If you start a new B2C business the only way to do inbound sales is advertisement, as by definition no one knows about your company/brand/products/services."

... for the simple reason that people will look for other means to find products online. For example non-biased search engines, product catalogues, review sites, etc. etc.

And no, listing your product with objective info is not the same as advertising.

ayewo• 5 years ago

If you start a new B2C business the only way to do inbound sales is advertisement, as by definition no one knows about your company/brand/products/services.

This is not strictly true. Inbound sales is one tactic, there is also inbound marketing (aka SEO). The tactic or set of tactics available to a new B2C business largely depends on what trade offs they are willing to make between time and money. A cash-strapped B2C could invest time in SEO, while a decently-funded competitor could invest money in paid search ads. A well-funded rival could do both while also investing in social media ads. The tactics that will prove effective will largely depend on how clear the messaging is relative to more established competitors.

Outbound sales is (usually) impossible in B2C for cost reasons. Almost every successful B2C company is evidence that advertisement works.

Again, not totally correct because you are using terms in a non-standard way. For instance, you refer to ‘advertisement’ when you really mean ‘marketing’.

Sales and marketing as human activities, have existed from the beginning.

Advertisements, the thing so derided on HN, only became feasible (and widespread) with the help technology. In other words, all ad forms depend on a enabling technology for their existence.

The spread of printing presses eventually made one of the first ad formats—handbills—economically feasible when compared to the traditional practice of shouting to draw attention from patrons to the market square. The telephone made telesales/robocalls economically feasible at a scale that far surpasses doing cold calls on foot (i.e. door-to-door sales). Same with radio, television and ad formats enabled by the modern Web.

megaman821• 5 years ago

I wonder what this means for free apps.

  * Will they simply disappear from iOS?
  * Will new subscription options appear?
  * Will they remain free but require users to enter a 20 question demographic survey to continue?

bilal4hmed8• 5 years ago

You simply start charging a subscription for your app

lwansbrough• 5 years ago

Which is subject to a 15-30% fee, unlike ads. And assumes users want to have a subscription to my app (they don’t.)

muro• 5 years ago

Subscriptions to apps to will work about as well as subscriptions to news sites.

eddieroger• 5 years ago

For uninteresting reasons, I had to wipe settings on my iPhone this weekend, which meant re-approving everything, including the do not track setting mentioned here. When 14.5 came out, I updated faster than apps like Instagram could, so I missed their "please approve" screens that I got to see now. It's not strange to see an app explain why it is about to prompt for permission to do something, but posing for better personalization in the ads I'm going to see anyway really didn't land with me. I fully admit that I was never going to approve this setting, but I still find it surprising that they think I would be happier with more specific ads. Does that work for some folks? I guess I can understand that if I have to see ads at all, may as well make them personalized, but I'd still rather not see ads, to the point of blocking them when possible.

peterhi• 5 years ago

I've never found a benefit in "Personalized ads" because they have never been something that I am interested in, it seems to really mean "we can charge the brands more for this ad". There is a ton of stuff I would willingly pay for but it never seems to be what people want to advertise to me

lanstin6• 5 years ago

This was always true for me until recently the Instagram ads (I use Instagram to see what my kids and their friends are up to). Those ads are all very much in the sweet spot of my weaknesses. Haven’t bought from them, but I still watch more than halfway in fascination before I realize consciously what has happened.

_game_of_life• 5 years ago

I opt into personalization and am constantly getting ads for tampons (not a woman), essential oils (yuck), iced tea (I only drink water), chinese clothing (lol), and then sporadically...

100k+ metal 3d printers and other industrial engineering equipment. I am a disabled, unemployed student.

I also have serious doubts that "personalized" ads even really exist. It's like they're trying to show me the least applicable products to my life.

superjan• 5 years ago

No, but it’s the best argument they can make to make it sound like it’s advantageous to you.

anamexis2• 5 years ago

All else being the same, I would prefer to see personalized ads over not. It's not worth the incursion of privacy to me, but that said, I'd prefer to see ads for, say, clothes I might wear rather than perfume or prescription medicine.

Terretta• 5 years ago

Do you read articles or visit sites having to do with clothes? What about perfume or meds?

Context adjacent ads have worked fine on TV and in magazines for quite a long time. NYT claimed their ad revenue went up by getting back to that.

malka• 5 years ago

I am more interested in LESS relevant ad. They will be less succesful at manipulating me.

baby3• 5 years ago

It’s interesting because I believe everyone would choose to see personalized ads if asked. But the wording Apple employs is “the app is asking to _track_ you”, which is negative wording and thus has no chance of being accepted. They pretty much turned off the feature but made it look like the user still had a choice.

Ar-Curunir3• 5 years ago

Er but that’s the truth, no? And if the truth is damning for Facebook and Instagram and Google, well that’s what those companies chose as their business model

f1refly2• 5 years ago

It's interesting you believe that, because every pc or laptop I helped anyone who asked me for advice buy had its native microsoft ad targeting turned off by the respective buyer during setup. People understand that "personalized ads" means "allow us to stalk your every move to try and coerce you into buying garbage you don't need". This is for m$ windows 10, so the wording is as abusive and deceptive as possible, not as plain as apples.

fpgaminer• 5 years ago

I guess I can understand that if I have to see ads at all, may as well make them personalized

I think this is the greatest lie the ad industry has foisted on us, and unfortunately I see a lot of people fall for it.

We hear the word "personalized" and we think "relevant" or "interesting". That if you _have_ to see an ad, at least let it be one that tickles your fancy.

Yet interesting and relevant is _not_ what ad tech is optimizing for. Rather, ads are optimized for _conversion_; the likelihood that a user will be converted into a "sale" (where "sale" can range from simply clicking the ad, to buying a product, to subscribing to a service, etc. Whatever is most important to the ad buyer and measurable.)

Optimizing for conversion is _not_ the same as optimizing for being relevant or interesting. Instead these ads are being optimized to exploit whatever weaknesses you, the targeted user, may have. How can they _trick_ you into converting.

It's the same problem we see with social media. Social media companies optimize for engagement, which means they get filled with the baser human emotions in ways that get people addicted, regardless of its cost to the user or society as a whole. Ad tech is doing the same thing, and in many ways "engagement" is synonymous with "conversion". Ad buyers are paying ad markets to do absolutely whatever it takes to engage a user in the ad buyer's desired activity. Come hell or high water, those ad markets will convert you and they will consume as much data and processing power as necessary to find a way to do that.

All this to say that ad tracking is not about making ads more interesting to a user, more palatable, like many seem to believe. It's about using _your_ personal data to _manipulate_ you.

Ad tracking is finding ways to tailor a drug to the specific user to maximize the seller's profit.

kstrauser2• 5 years ago

I’d much rather have unpersonalized ads, because then I won’t be tempted to buy yet more stuff I don’t need. I might get suckered into picking up some new widget that I’ll play with once and then forget about. There’s zero chance I’d get talked into buying, say, a box of tampons.

If you substitute “predatory” for “personalized” whenever the subject comes up, it better represents my thoughts.

poundofshrimp2• 5 years ago

To folks that are complaining of being manipulated, I always felt that if you can be coerced into impulse-buying something voluntarily, and then regretting the purchase, there is probably not anyone to blame but yourself. Putting aside the existence of ads for a minute (I hate ads too), why do you feel that voluntarily purchasing something based on an ad is “manipulation”? If you resent such purchase afterwards, seems to imply you made a bad decision (rather than anyone manipulated you).

EDIT: care to elaborate the downvotes?

lanstin6• 5 years ago

Many humans struggle to stay on the path of activity that their best rationality and knowledge of a fulfilling life recommends. If you ever stay up too late, drink too much, struggle with a bad relationship or smoking or you know too much Free Flow, you have to chance to be aware of some of the weaknesses in our nervous systems. Perhaps you are so far away from the human norms that you don’t find anything tempting that is not also beneficial, but is it quite common I promise you.

vorpalhex2• 5 years ago

Homo economicus. Man may be a free agent on paper but most decisions we make are driven by easily hijacked heuristics.

kstrauser2• 5 years ago

There are literally psychologists working to use our brain’s design to their benefit. It’s not entirely fair to criticize someone for being manipulated by highly trained experts who labor to manipulate them.

benhurmarcel• 5 years ago

Of course it's manipulation. Ads are made in order to modify your behavior in the benefit of the brand. That's literally the definition of manipulation: to control or play upon by artful […] means especially to one's own advantage; controlling someone […] to your own advantage […].

why do you feel that voluntarily purchasing something based on an ad is “manipulation”?

There's nothing in the definition of manipulation that says it has to be involuntary.

tomjen34• 5 years ago

I would prefer more specific ads. Maybe they will finally show something worthwhile?

I mean I am not holding my breath, despite all their tracking facebook can't show me relevant ads and google kept showing me ads for things I was interested in (I have since changed to DDG).

bigyikes• 5 years ago

This will bring only good things to the ecosystem. Your app can’t support itself without tracking, and your users don’t want to pay? Maybe your app doesn’t provide as much value as you think. Advertising is a race to the bottom, so kudos to Apple for raising the bar for everybody.

wccrawford• 5 years ago

Another comment here suggested that non-free social media would see rich people getting wider distribution.

And I think that's exactly what would happen.

Freemium dating sites let you use the most basic features for free, but to actually reach more than a few potential dates, you have to pay.

Freemium social media might also do the same. For free, maybe you get sent to just a few of your closest friends. For money, you can be sent to all your friends and random strangers.

And perhaps you have access to flashier messages and better icons. Perhaps meme/picture posting is limited for free.

It's easy to think that the users would just go elsewhere, but if Facebook can't afford to operate without tricks like that, smaller sites have even less chance.

And once that door is opened, it quickly gets wider and wider. Look at DLC and IAP in games now. It used to be non-existent. And then "horse armor" appeared and sold like hotcakes, despite all the protests. From there, we ended up with gacha games that absolutely abuse people with certain mental instabilities, often when they have money to burn, but often even when they don't.

As much as I hate ads, I'd hate to see social media get worse.

manquer• 5 years ago

LinkedIn has this setup for years . It has not impacted anyone all that much.

Only professional influencer would need to pay in this kind of model that doesn't seem all that bad to me.

xwdv• 5 years ago

Stop conflating someone paying for digital goods as being a “rich person”.

If you’re serious about dating, you could afford to spend $10 a month. Most people can make $10 in less than an hour of work. You could probably afford $40 dollars a month easily. Don’t worry, your actual dates will probably cost you more than that and often you’ll get nothing in return...

People have been sucking on the teet of free social media for so long that the thought of even paying a couple dollars for something makes them feel they are buying a luxury good, when you are literally just giving up some pocket change.

Meanwhile, they buy $5 lattes and $10 burgers a few times a week and pay god knows how much for a myriad of streaming services, without a second thought.

criddell3• 5 years ago

For many of us, the ads aren't necessarily the problem, its the surveillance.

krrrh• 5 years ago

if Facebook can't afford to operate without tricks like that, smaller sites have even less chance.

It could be the opposite.

The ambitions of social media operators need to be downsized. One of the most salient data points is that WhatsApp served a half billion users with 50 employees when they were acquired by Facebook. And reportedly they were profitable at that point by charging $1 per user per year after the first year. By 2018 Signal had already made a substantial entry into the messaging market with [only 2.3 FTE engineers on average](https://signal.org/blog/signal-foundation/) (I'm not sure on the current headcount but I'm guessing it's still on the order of magnitude of the WhatsApp numbers), and it is self-sustaining based largely on a $50m endowment provided by one individual (Brian Acton, not ironically the co-founder of WhatsApp).

It's totally conceivable that for the type of social media that people prefer (no algorithm in the timeline, no tracking, etc.) a very small organization could provide it.

Could the Signal foundation develop a competitor to Twitter or Facebook, or could the social features and groups in apps like Signal or Telegram (also a relatively small team) continue to chip away at the jobs that people hire Facebook for? I don't see a strong argument against this.

Andrew Carnegie decided to put libraries in cities all across America because he thought he could make a major contribution to the needs of the day through improving access to literacy and self-education to those who otherwise couldn't afford it. From what I can tell [Brian Acton](https://www.forbesindia.com/article/special/i-am-the-david-g...) is doing the same by ensuring that private communication is free and available to even the least amongst us. Why would we assume that we'll see less and not more of this sort of thing?

Acton: In some ways, I'm the David going against the Goliath that I created. I think that I stand on my principles the most, having been in the industry and seeing how the industry has developed around advertising and behaviour-tracking and user-tracking, I’m here to stand on my principles and present alternatives. I’m not going to just say the world should be a different place. I’m actually going to try and build the world a better place and that’s why I wake up every morning. That’s why I go to work every morning and that’s why I don't sit on a beach and sip cocktails.

tomjen34• 5 years ago

Or better. You could take the CS:GO model and only sell skins. Seriously skins can sell for a fortune and they do absolutely nothing.

slver2• 5 years ago

It's very convenient to conclude "bad things happen to you? maybe you're a shitty person", but that's not how reality works.

Users may not want to pay for myriad of reasons, like unfair competition, or competition of lower quality where the user can't clearly determine the quality they receive, preconditioning and other existing biases, and so on.

How do you think our media found themselves in a continued decline over the last few decades? They were paid, but they had to focus on online presence and ads as low-quality blogs and fake news replaced them. People don't want to pay for quality journalism, because they can't tell the difference. This doesn't mean quality journalism doesn't provide value.

Furthermore, ads by themselves are not a bad service in our world. It's basically a business saying "hey I'm here, I have this to offer, if you want it". Is that such a bad concept? Of course there are scams, and so on. But that's not INHERENT to ads right? It's one thing to fight for higher quality ads, another to hate ads entirely.

alkonaut5• 5 years ago

"hey I'm here, I have this to offer, if you want it"

As always there is a loud but tiny minority that thinks all ads are bad. Most of us (I assume) think ads are mostly fine but tracking is bad.

willis9362• 5 years ago

"hey I'm here, I have this to offer, if you want it"

This is a lie to children. It's like saying the decision to drop nuclear bombs in WWII was made to bring Japan to surrender and not a show of force to Russia. It's simply a false dichotomy.

Ads exist to maximize profit and its done by pushing individual rights back. Nobody voted to give up privacy to the government or private sector.

The answer to your burning question is simple: people don't give a shit about your product or your ad. Sheep are shaped by what they see. You're paying for a stake in the perverse attention economy.

kevinventullo• 5 years ago

There’s a sense in which free ad-supported apps are “redistributive”. Whether you’re rich or poor, Facebook costs the same and the experience and features you have access to are identical. Effectively, the rich users are subsidizing the app for the poor users (the rich users’ eyeballs being worth much more). I personally view that as a strong upside compared to paid models.

I’m not sure where I’m going with this. What does paid social media look like? Perhaps more like traditional media: only deep pockets will have access to “virality” and wide distribution. I could certainly see a market for that with the Instagram crowd.

supernovae• 5 years ago

It's been years since there was organic viral videos... that ship sailed - we're at the point of pay for play, sex or extremely high risk/danger/endangerment content for eyeballs..

hedora• 5 years ago

In the past, we had paid social media (kind of) with services like CompuServe, AOL, etc.

People tended to self-segment by demographics. Also, there was more than one network to choose from, since things were segmented by which internet connection you had. (This was also the heyday of BBS’s and Usenet, which probably wasn’t a coincidence.)

Maybe having N vertically integrated communities with different norms is better than what facebook, twitter, etc built via their horizontally-integrated services.

specialist• 5 years ago

Most (all?) prior mediums were initially pay to play. Print, radio, telegraph, TV, cable, fax, ATMs.

Then there's some kind of phase change. Like maybe when costs reduce enough for Metcalfe's Law to kick-in.

[I don't quite recall what some other theorists have said. Shirky's observations about cost of coordination. McLuhan's distinctions between passive and active engagement (aka push vs pull).]

Apple's privacy power play may be the first time someone manages to put the toothpaste back into the tube, for an entire medium and by extension ecosystem.

Some mediums, like rail and phones, manage to remain pay to play. Maybe there's something to be learned by compare and contrast.

banach• 5 years ago

These are not the only alternatives. Messaging apps allow people to stay in touch with each other without any of the timeline corporate surveillance society nonsense.

arkadiyt• 5 years ago

DuckDuckGo has advertisements and is profitable. Nothing about the free-ad model for apps requires tracking users.

adrr2• 5 years ago

Search ads you don’t need user targeting. You target on the search term and most likely it will be relevant for the user. Only standard display ads need targeting to be able to show relevant ads to the user.

have_faith• 5 years ago

the rich users are subsidizing the app for the poor users

That would only hold if the majority of paid ad placements on a social media site targeted rich people. As is evident by the ads that appear surrounding elections, the ads targeting average people to dump their savings into crypto and all of the gambling (might as well be gambling...) gaming ads that doesn't seem like a safe assumption to make although I have no data to support either assumption.

howinteresting2• 5 years ago

It is well established that the ARPU from richer demographics (income levels, countries etc) is much higher than that from poorer ones. The redistributive effect is real, though perhaps there may be other ways (e.g. reparations) that have less harmful side effects.

brundolf• 5 years ago

Maybe some room in the market will be made for federated and/or nonprofit social-media?

msoad• 5 years ago

This is something I thought about too. The dilemma for Facebook and Twitter to offer paid service is interesting

Wealthy eyeballs worth more (a lot). Wealthy people most likely to pay to not see ads. A super high price to justify not showing ads to wealthy people will make the whole offering moot.

I don't have the numbers but if it's anything like the rest of the economy, top 10% is probably spending something like 60% of total spent. So removing the top 10% from the targetable population for ads can be a huge hit to ad revenues.

phh• 5 years ago

I totally agree with you. I wouldn't necessarily say that rich people subsidize poor ones, other one we wouldn't see Facebook racing for Brazil and Google racing for India. But yes, one major property of ads is how it adapts to the user's revenue.

I believe that anyone who wants to take on ads, need to understand this first. And to accomplish an ad-free realk, one needs to somehow have people pay differently based on their incomes. And I can't see any way without tracking on how to do that.

One company who managed to do that, to some extent, is Netflix. Their price range from 3$/month (lowest tier in India) to 20$/month (highest tier in France), for pretty much the same service. It's still only one order of magnitude of adaptation. While ads scale from pretty much 0 (poor people who can "mis"spend only 5$/month), to I think maybe 100$ for some clicks.

Basically, from my point of view, ads are a way to raise money based on what people can give, while removing the free-rider problem that doing it directly would raise. Can we make a useful crypto money that fixes this? (you're allowed to a big computation budget, since ads have a very expensive global budget)

crvdgc• 5 years ago

Whether you’re rich or poor, Facebook costs the same and the experience and features you have access to are identical.

Or you can say, the amount of work that's extracted from the user is the same. Because the major "service" of social media isn't the webapp that has a feed timeline, or a fancy UI, or availability (which can be easily copied by competitors). It's the network effect that comes from user's participation. It's very possible there's a net profit for the majority of users (either from clicking the ads, or from simply using the social media), so the "subsidized" users' loss is not a primary concern here.

tfang17• 5 years ago

New change has been a huge pain for developers. Apple makes these new privacy announcements and takes all the credit, but pushes work to iOS devs to actually implement.

schleiss• 5 years ago

Meanwhile, Google's and Facebook's market caps are near all time highs. The invisible hand dictates that the impact may very well be insignificant for those two.

llIIllIIllIIl• 5 years ago

Excellent

OrvalWintermute• 5 years ago

While I am not a big fan of advertising in some cases it may be a necessary evil. If I was going to see ads, I would prefer that they are:

A - generic as to my identity attributes B - Not personalized in any way, except to the site

Basically, much closer to the ads back in the 90s.

If it works for TV for decades, it can work for the web.

zenyc• 5 years ago

I’m the opposite. I hate ads that have nothing to do with me. I value my time and I prefer that if I’m going to see an ad, then that ad be something I would find interesting.

doobeeus4• 5 years ago

Follow the money - Apple's "privacy" initiative is just about Apple ensuring that every dollar spent in an iOS device sends 30 cents to Apple. That isn't the case with ads not served by Apple. So Apple is making themselves the only viable way to serve ads on iOS (https://support.apple.com/en-us/HT205223) and encouraging in-app purchases for everything else - problem solved.

Also, isn't it convenient that Apple is only concerned about their customer's privacy for business conducted outside of China and Russia?

vmception2• 5 years ago

As it should and I don’t care. Advertisers and data brokers get no sympathy from me. An Apple ad venue allows for some more uniform controls as well, such as tracking revokable consent of a user’s data, even if you found a way to pay the user for their data at some point.

doobeeus4• 5 years ago

I agree Apple has the right to run the lawful aspects of their business as they see fit but I'm a little concerned about those that think Apple has their back with this privacy scam.

adrr2• 5 years ago

This change will really hurt them. The biggest effect is on paid app installs since you no longer have access to the advertiser ID which makes it extremely difficult to measure performance and tracking app usage on the device. I’ll take a bet that some of this gets rolled back when it hurts Apple’s App Store revenue.

bryan_w2• 5 years ago

Also didn't they just hire one of FB's former ad execs to head up their ads effort?

vmception2• 5 years ago

Now allow us to share only some contacts!

And don’t approve apps that use our phone numbers as authentication and to build a social graph with people that uploaded our contact prior.

nchrys• 5 years ago

I am really puzzled by the negative sentiment around adtech on Hacker News, especially since I would guess that a lot of people here have a salary that depends directly or indirectly on advertising. "Tracking" gets a lot of bad press, so much so that I sometimes wonder if this is not organized by the tech giants (Apple, Google, Facebook) who have access to their own first party and who thus have much less to lose when cross site tracking disappears. Adtech providers only have access to products you buy/see, for a limited time and without any personal data, meanwhile Google and Facebook know everything about you, your friends, your center of interests the places you go to, along with your name but somehow everyone seems hell-bent on abolishing 3rd-party cookies. Apple's own apps are not subject to this change, and as noted by other commenters this will probably shift budgets to subscription of which Apple takes its cut. All this will further the supremacy of walled-gardens and big tech, at the expense of smaller independent players.

I'll be honest, there is a creepy feeling when being tracked cross-site, and adtech providers have collectively failed at providing explanations, and a transparent account of how this works and why this is useful. They have also relied on fingerprinting, which has hurt the credibility of the field. The issue is that the replacement that are currently in the works (https://github.com/WICG/floc and https://github.com/WICG/turtledove/blob/main/FLEDGE.md) are extremely complex, will still dramatically impact adtech performance and only improve privacy for a very contrived definition of the concept which incidentally benefits once again big tech vendors...

As to the effectiveness of advertising, removing tracking will have a huge impact. And this affects all players in the value chain, not only adtech providers but also publishers and more importantly advertisers which will see their return on ad spent severely impacted. There is a real of loss "social welfare" (I mean in a game-theoretic sense, but also for real if you believe in capitalism) if tracking is disabled. The freakonomics article gets cited a lot but the industry as a whole is moving forward with a greater emphasis on proving incremental sales. Advanced clients (who can spend billions per year) have real statisticians doing permanent randomized control trials proving that every dollar spent is providing incremental sales. I work for an adtech company and we have automatic RCTs for every single client, and guess what, advertising works for most clients. This is on top of fact that we are measuring the effectiveness of dollars spent on us, in addition to the dollars spent on competitors/other channels on which we have no control of course. The fact that Uber could see no impact when going from 150m to 50m is a testament to the incompetency of their CMO, which could not be bothered to actually measure and pilot the campaigns correctly, not the effectiveness of adtech as a whole. Thoughts are my own not my employer's.

doobeeus4• 5 years ago

Well said. What if Apple's popup said "personalization" instead of "tracking"? Advertising works well for most of us, most of the time. Ironically, Apple is spending significant sums on advertising that touts how they are crippling advertising to protect your privacy.

iOS 14 tracking changes sees big ad spending drop, tumbling prices

Related Stories