HACKER Q&A
📣 in_vestor

What is going on in the ad-tech market?


The NYT ran a story this week about deterioration ad quality.

It’s obvious to everyone here that services like google search, social media, and YouTube have had user experience vastly degraded in the hunt for ad revenue.

Apps and sites that should have long ago perished are able to linger on like ghosts, endangering user data (MySpace still exists).

And yet this earnings quarter, we learned that companies are doing better than we expected. Meta is growing its user base and google is increasing its clicks. Despite the wishes of the media, twitter is doing OK. Dilapidated app companies continue to raise funds.

What is going on? What would cause the ad-funded ecosystem to fundamentally change?

Looking for insight from people on the front lines.


  👤 tacosbane Accepted Answer ✓
ads are essentially noise. some high-nines number of ads have no effect. to counteract this, demand-side providers came up with ways to fake an effect to look valuable. they then discovered clients couldn't tell the difference between real or fake, or didn't care because the clients also want to say their ads worked. then the race to the bottom began: buy the absolute minimum quality for as little as you possibly can. that put pressure on the supply side because their revenues fell.

examples of faking: - the search "companyname" takes credit for "companyname.com" - "we promise we didn't show you the one positive result from running 1000 tests"


👤 cm2012
Every comment here is wrong, which is typical for an advertising related thread on HN. Here's the actual reason:

1) Apple made a change last year (in ios 14.5) that neutered the ability for platforms to track results from mobile advertising.

2) This fucked ad targeting for pretty much everyone that relies on mobile web and apps (fb, tiktok, snap, etc)

3) Products that require good targeting to be profitable became harder to promote (like all b2b advertising, niche needs and hobbies ,etc) so more ads are ones that appeal to the average person, which means more teeth whitening strips, weight loss solutions, etc.


👤 vmoore
> What would cause the ad-funded ecosystem to fundamentally change?

I don't have the stats, but AD blockers & tracking blockers are a real spanner in the works for AD-Tech. I imagine blocker popularity exponentially increases as each year passes, meaning at some point they will make a substantial dent in AD-supported sites who rely on income from ADs to stay online.

Google has so much data on people they can essentially read people's minds, so they are doing fine in regards to targeting people properly. They have a tight ship and it works (For now). Same for Facebook, although Apple's tracking opt-out apparently is hurting their business.


👤 jeffbee
How did you figure that Twitter is "doing OK"? Reports from this morning suggest they have lost two thirds of their revenue since October.

👤 red-iron-pine
> It’s obvious to everyone here that services like google search, social media, and YouTube have had user experience vastly degraded in the hunt for ad revenue.

In a nutshell: capitalism gonna capitalism.