That isn't what "fraud" means in this context. Ad fraud is when you have something other than a real user loading or clicking on ads. For example, I could stand up a headless browser to click on the ads on my site. This would get me more of a payout from my advertisers, but would also be fraud.
A stable identifier makes identifying this sort of behavior much easier.
(Disclosure: I work on ads at Google, speaking only for myself)
Ad fraud... How exactly is this my problem as a consumer? This sounds pretty much like a "you" (ad networks and advertisers) problem... So why should you be allowed to spy on me - who never defrauded any advertisers - to fix your problem?
When you use a service that is funded by advertising, the service only gets that funding because the advertisers trust that they are getting their ads in front of real users. Some advertisers are able to precisely measure the quality of their traffic, for example by seeing whether the traffic they get buys things, but most are in businesses where that's not possible (no one clicks on an ad for Coca-Cola and then places an order for Coke). Ad fraud means that advertisers are less willing to pay to be shown on the service, so the service's funding decreases.
Very likely, less funding for the service hurts you as a consumer: they are probably spending their funding in support of the site. For example, I believe that the ads here fund the moderators.
> why should you be allowed to spy on me - who never defrauded any advertisers - to fix your problem?
Then I suppose businesses will need to adapt, as businesses have for hundreds of years, either away from relying on advertisements or going back to old-school, non-intrusive, manual ad placements that don't rely on clicks, targeting, and tracking.
Much of the adaptation will be disappearing, including a large number of sites that contribute articles that pop up here on HN. Another way would be getting more invasive, like requiring login, before the content gets displayed.
Many of the sites that are featured on HN are not even the actual source of information, which often gets linked in the comments. As for going more "invasive", it's that exact reason that ads are being attacked, so I wouldn't bet on that working out long term either. I also fail to see how logging in inherently leads to revenue, unless we're talking about a subscription service in which case it'll live or die by the quality of the content....or else no one is going to pay.
This is certainly possible - I am terrible at predicting the future! To clarify the logging in comment: site is free, but they require you to login to view content (what Medium is doing) and now you have a unique identifier that can be used track you across sites when shared locally ("login with Google" effect)
I like the second part of your answer. Indeed, if you wanted something like a way to id bad actors, you could do some scheme where the OS (or browser or even secondary service) could do some form of attestation that isn't trackable and has even stronger guarantees than some unauthenticated unique id has. If Apple and Google can make their Corona Tracking APIs untrackable by third parties, then untrackable "valid device" APIs should be possible and feasible as well.
But you cannot make this my problem by saying "let me spy on you. or your shit gets more expensive, or sites have to close". That sounds too much like "an offer you cannot refuse". I will not surrender my privacy for failed business models.
The coronavirus exposure notifications are only "safe" because we assume no single actor can put Bluetooth receivers every square meter, thus rotating the IDs every so often is an effective defense against potential tracking.
The same couldn't work with the internet because essentially every ID would be known to potential bad actors, as they'd be tracking every single one of them (among other data points) and can easily defeat the rotation of those IDs based on other data points which don't change.
In general I'm not a fan of advertising, but one of the most important things it does is level the playing field across income levels and countries. $5/month would be outrageously expensive for a very large number of people, most of whom are not on Hacker News, and any discussion of replacing advertising with a subscription model has to start from that basic fact.
Sure. We're not talking about Facebook here, they'll be fine. We're talking about random sites and apps. How many apps on the Play/App Store actually implement differential pricing by region?
This cannot be an afterthought—it must be the central question all advertising skeptics must start with.
If ad companies manage to set up international ad networks that show relevant ads to the user according to their home country and interests, I wonder if all that effort and hard work couldn't have instead be spent building a platform for collecting payment internationally
I'm not justifying anything, I'm merely stating what I think is an unequivocally positive side effect of advertising-based models: they have automatic price discrimination built in. Subscription models do not have it built in—developers have to do extra work to introduce price discrimination. I think this is a demerit of subscription models, though not one that outweighs the demerits of advertising models.
> an unequivocally positive side effect of advertising-based models
Democracies are bought on advertising.
Hiding the price of the user's attention is not a positive side effect to the user. Hiding who buys the user's attention is not a positive side effect to the user. Hiding how many other people's attentions are also being sold is not a positive side effect to the user. All of these are detriments to the user.
Since you seem persuaded by ends justifying means, realize that better business models are impractical because online surveillance is so easy and lucrative. One of the biggest changes correlated with the rise of web toxicity was the rise of online advertising. Maybe coincidence, but I'd love to see what happens if surveillance becomes the exception not the norm.
This all presumes that the advertising business needs this level of granularity to succeed. It doesn't. Advertisers can purchase fixed display ads on reputable sites by contracting directly with the site owner. They can also sponsor content creators and provide them with an affiliate code which the viewers can use to receive a discount. These mechanisms do not expose the advertisers to fraud.
> Advertisers can purchase fixed display ads on reputable sites by contracting directly with the site owner.
But what is a fair price? That depends on the traffic, but we are positing that detection of "is this a real user" is not possible, right?
Traditionally, advertisers have gone by Nielsen style ratings for broadcast media (pay people to track what they consume, extrapolate) and circulation numbers for print media. In our hypothetical world the former would still be possible but the latter wouldn't. Unfortunately, in addition to being really inefficient, if you pay people to track what they consume you will essentially never compensate niche publications. This strongly promotes centralization.
Privacy Pass / Trust Tokens / etc seem much more promising to me?
> But what is a fair price? That depends on the traffic, but we are positing that detection of "is this a real user" is not possible, right?
Couldn't the price just be based on the actual payoff the advertiser gets (aka increased product sales)? The publisher is incentivized to set the maximum price that the advertiser will pay, and the advertiser is incentivized to get the most bang for their buck, so at the very least they would never pay more than what the ad brings them in terms of revenue.
Over time, this should reach an equilibrium. Niche publications may have to charge low prices at the start as they build their reputation among advertisers, but I think that's a worthwhile price to pay if it means better privacy and eliminating a problematic advertising model of CPM/CPC (where fraud is possible and tracking is required to battle it).
As I wrote in my response to rndgermandude [1], only some advertisers work this way. If you put up pictures of standing desks, people click through those ads, land on your site, and purchase desks, then it does not matter how scummy the publisher is because you can accurately measure the quality of traffic you are getting from them. On the other hand, if your ads aren't expected to lead to an online purchase (beverages, cars, political ads) this model doesn't work.
> Ad fraud means that advertisers are less willing to pay to be shown on the service, so the service's funding decreases.
Ok I agree that ad fraud is hurting publishers, as a secondary effect hurting consumers but the damage consumer getting in this current system is much much bigger. This is like saying you continue taking 5x damage, cause 1x damage to your publisher will effect you negative.
When you use a service that is funded by advertising, the service only gets that funding because the advertisers trust that they are getting their ads in front of real users.
Ad spend as a percentage of GDP has been surprisingly constant for the past century. IOW, companies do not spend more on ads just because they can better target their potential customers, nor will they spend less if they lose that ability.
I would be thrilled if online advertising became unviable as a business model. Most of what makes the web suck today (megabytes of javascript on every page; clickbait articles; outrage-driven social media; warehouses of PII waiting to be bought/sold/stolen) is because of advertising. Yes, I do want to pay for the services I use.
This. So much this. But there is hope. It seems that people are starting to realize the "price" of free content and are more and more willing to pay for it.
It could be microtransactions/in-app purchases-as-a-microtransaction, it could be subscription based models, it could be "media flat rates" (cross publication subscriptions), or something else entirely.
A lot of content, especially newspaper/magazine articles, at least here in Germany, already are paid-only, either through subscriptions or both subscriptions and alternatively microtransactions (mostly more in-depth reporting). The UK Guardian and the German taz employ voluntary payments/subscriptions with some success last I heard. US media seems to be pushing a lot more for subscriptions now ("you got free 3 articles this month")
Creators on patreon and on OnlyFans (NSFW) seem to be making good money off of subscriptions, on a smaller scale (and if they sell a product that has some demand, of course).
Relatedly the greater independence of creators from advertising would in turn mean fewer ads, which in turn means potentially more competition for the available ad space again and thus potentially higher prices.
Microtransactions are difficult legally, due to taxes.
If someone in state/country X buys something from a site in state/country Y, both X and Y may levy taxes on that transaction.
Many have thresholds for small businesses, where you don't have to collect taxes if your total business volume is below some threshold. For US states, the threshold is often of the form "more than $T total sales OR more than N sales".
With microtransactions, it is easy to exceed N sales even though you are not actually collecting much money, and then the costs of preparing and filing your quarterly sales tax reports can exceed your revenue.
Advertiser supported sites don't suffer from this problem. If someone in X visits a site in Y and Y gets payed by an advertiser for showing an ad to that person, the site does not have to worry about taxes in X, and in Y the ad revenue will just be income that gets dealt with on their income taxes.
Until we can get microtransaction-friendly cross jurisdiction sales tax reform microtransactions are going to have limited viability, at least for sites that want to operate legally.
But there there are people that intentionally bypass paywalls. Almost every article posted on HN behind a paywall has a user “neonate” who posts a paywall circumventing link. Then we collectively complain about advertising and paywalls. There is a large number of people that seem to think that all content should be free and that the people creating it are somehow a charity. I am ok with paywalls, but I don’t like to subsidize free riders. Apple News+ as a concept is a pretty good one, hopefully we can see more innovation in that sort of model.
I pay for a few paid news but I'm not fine with paywalls. It blocks non-subscriber's access, that's the problem. Obviously no one can subscribe all subscriptions, a few is max for most people. Ads is far better in this time. I wish Apple News' approach is getting popular.
Advertisers would put stupid banners on my page because they cannot do anything else but still want to advertise. Maybe they spend less because they get less return. I actually think it would increase quality of content.
Most content I consume is, like your comment, already shared by users without them receiving any compensation for it. It is usually someone who is not the content creator that profits from content on the internet.
I honestly want to see evidence for this claim. Sounds to me it makes running an ad network harder and therefore probably more expensive, but it is far from a certainty that this translates into advertisers' willingness to pay more (and pass it on to consumers).
Personally, I use ads as a signal to avoid buying certain products. If the ads are too prominent and omnipresent, it's an indication for me that I would be paying quite a premium on their marketing. But that's just me.
Let's say you're a startup trying to advertise on Google, and somebody has paid a bot network to fraudulently click on your ads. Now Google can't detect that those clicks are fraudulent, so you're billed for them.
Your channel efficiency unavoidably goes down, which increases your cost of customer acquisition because your other channels cannot pick up all of the slack.
Increasing the cost of customer acquisition is going to be bad for your business. You will either need to reduce costs (by hiring less, for example), or increase your prices.
This is a pretty status quo biased view. Maybe stronger privacy protection enables a startup search engine (or whatever) with a more privacy oriented funding method which wasn't thought viable before.
It's certainly possible new channels emerge to restore equilibrium, but I don't see Neeva (or whoever) replacing Google as a customer acquisition channel any time soon.
I think people are misconstruing me here. I'm not saying Google advertising is somehow fundamentally necessary to the economy. I'm just saying that it is straight up incorrect to think that there aren't legitimate downsides to removing their ability to police fraud.
I think there is a more charitable view of how people (I, at least) view what you are saying. There is a certainly a disadvantage to existing ad-revenue funded companies to not being able to identify their audience at the most specific possible level.
But there are also (potentially huge and beneficial) opportunity costs. We will never see alternative business models which are not viable in the existing ecosystem.
Agreed. Entrepreneurs always see opportunity in disruption, because you can always rebuild something better. Just don't @ me too hard for pointing out that the disruption is real and will affect the ecosystem (including startups!) as it is today.
There are alternatives to fight ad fraud than unqiuely tracking users everywhere.
The tracking part isn't necessary for fraud detection not even for conversation tracking. It's only necessary for "personalized ads" aka spying on users.
Products/services are typically priced according to what the market can bear. If advertising costs become cheaper for a given company, for whatever reason, who's to say this decreased expense is going to be passed down to consumers in the form of lower prices?
Living in an advertising-saturated and/or privacy-deprived world is also a "cost" borne by members of society.
> who's to say this decreased expense is going to be passed down to consumers in the form of lower prices?
Because economics. I know this intimately. I have a product we manufacture and sell on Amazon along with other channels. And if I am saving $1 on a customer acquisition, I am lowering my price one dollar because that would mean I can sell more at the same profit. Because if I try to keep that extra dollar, my competition will lower their price. Basically the cost of keeping that saved dollar is more than the gain from lowering the price a dollar. That’s how competition is supposed to work.
I know my cost of goods sold and my cost of sales down to the penny and have a pretty good idea of the elasticity curve for my product: if I lower my price by $1, I would sell x more bottles. However if I lower my price by $1 right now, I would decrease in profitability unless my costs also decreased by $1. There is a point on the curve that represents the optimal price.
It would seem that fundamental microeconomics is something not taught in many schools and that’s tragic because you get statements like “who’s to say this decreased expense is going to be passed down to consumers.” Because competition is what makes this statement silly in principle.
If consumers are desensitized to targeted advertising it could make products cheaper as they'd seek out other sources of information that don't require paying Google a hefty tax.
I don't really think that the students are the ones being "helped" when google gets paid $90 a click on student loan refinancing queries. They end up paying that $$ in the end.
A stable identifier makes identifying this sort of behavior much easier.
(Disclosure: I work on ads at Google, speaking only for myself)