<story><title>As YouTube traffic soars, YouTubers say pay is plummeting</title><url>https://onezero.medium.com/as-youtube-traffic-soars-youtubers-say-pay-is-plummeting-30dc1ba444db</url></story><parent_chain><item><author>pembrook</author><text>I&amp;#x27;ve noticed HN often has two opinions about advertising depending on the day of the week:&lt;p&gt;1) It&amp;#x27;s an unchecked, all-powerful evil, making people buy or believe in things they don&amp;#x27;t want or need by hoarding their data&lt;p&gt;or&lt;p&gt;2) It&amp;#x27;s a giant ineffective scam that stupid companies who aren&amp;#x27;t led by engineers waste VC money on&lt;p&gt;The two are diametrically opposed, yet, I&amp;#x27;ve seen the same person argue #1 on Monday when it fits the narrative, and then on Tuesday start arguing #2--blissfully unaware of how both cannot be true at the same time.&lt;p&gt;Could it be, that both 1 and 2 are wrong, and that advertising spend is simply reduced during recessions in reaction to the reduction in spending by consumers? Why pay money to acquire customers when the customers aren&amp;#x27;t willing to spend money on new products?</text></item><item><author>tmpz22</author><text>OR ads aren&amp;#x27;t that effective in the first place and the whole industry is a house of cards propped up by middleman making their fat margins convincing people ads are necessary...</text></item><item><author>finiteloops</author><text>There&amp;#x27;s no long term risk to google and other ad exchanges because the advertisers are in a prisoners dilemma.&lt;p&gt;If the advertisers collude or trust that the competitors won&amp;#x27;t increases ad spend, the relative market share stays the same and all companies participating enjoy increased margins.&lt;p&gt;The first company to break gains market share, so as a result they all &amp;quot;overspend&amp;quot; and google is the only one that benefits.&lt;p&gt;The worst part is the cost of google&amp;#x27;s margin is baked into product pricing, so the end result is we pay more to have the companies compete to advertise to us.</text></item></parent_chain><comment><author>AnthonyMouse</author><text>It&amp;#x27;s possible for both 1 and 2 to be &lt;i&gt;right&lt;/i&gt;.&lt;p&gt;Suppose that if you&amp;#x27;re peddling cheap junk and snake oil, advertising is effective, because nobody will have heard of your product by word of mouth (no one would recommend it and previous victims are ashamed to admit being suckered), but if you spam enough people you&amp;#x27;ll reach enough suckers to exceed the advertising expense.&lt;p&gt;But if you&amp;#x27;re peddling a popular and quality product, everyone has already heard of it and additional advertising has low marginal utility because you were going to get most of the sales anyway.&lt;p&gt;This furthermore doesn&amp;#x27;t get you out of the prisoner&amp;#x27;s dilemma, because even if buying advertising is only break-even rather than profitable, your competitor is doing it so you have to do it too or they gain a volume advantage over you and use that to kill you on unit pricing. But then you all do it and all that happens is that everyone pays money to cancel each other out.</text></comment>
<story><title>As YouTube traffic soars, YouTubers say pay is plummeting</title><url>https://onezero.medium.com/as-youtube-traffic-soars-youtubers-say-pay-is-plummeting-30dc1ba444db</url></story><parent_chain><item><author>pembrook</author><text>I&amp;#x27;ve noticed HN often has two opinions about advertising depending on the day of the week:&lt;p&gt;1) It&amp;#x27;s an unchecked, all-powerful evil, making people buy or believe in things they don&amp;#x27;t want or need by hoarding their data&lt;p&gt;or&lt;p&gt;2) It&amp;#x27;s a giant ineffective scam that stupid companies who aren&amp;#x27;t led by engineers waste VC money on&lt;p&gt;The two are diametrically opposed, yet, I&amp;#x27;ve seen the same person argue #1 on Monday when it fits the narrative, and then on Tuesday start arguing #2--blissfully unaware of how both cannot be true at the same time.&lt;p&gt;Could it be, that both 1 and 2 are wrong, and that advertising spend is simply reduced during recessions in reaction to the reduction in spending by consumers? Why pay money to acquire customers when the customers aren&amp;#x27;t willing to spend money on new products?</text></item><item><author>tmpz22</author><text>OR ads aren&amp;#x27;t that effective in the first place and the whole industry is a house of cards propped up by middleman making their fat margins convincing people ads are necessary...</text></item><item><author>finiteloops</author><text>There&amp;#x27;s no long term risk to google and other ad exchanges because the advertisers are in a prisoners dilemma.&lt;p&gt;If the advertisers collude or trust that the competitors won&amp;#x27;t increases ad spend, the relative market share stays the same and all companies participating enjoy increased margins.&lt;p&gt;The first company to break gains market share, so as a result they all &amp;quot;overspend&amp;quot; and google is the only one that benefits.&lt;p&gt;The worst part is the cost of google&amp;#x27;s margin is baked into product pricing, so the end result is we pay more to have the companies compete to advertise to us.</text></item></parent_chain><comment><author>mywittyname</author><text>Well, we are a collection of people with our own independent thoughts and feelings on subjects, so it shouldn&amp;#x27;t be a surprise that some people feel the opposite of others are a variety of subjects.&lt;p&gt;Though, to be honest, I don&amp;#x27;t think I&amp;#x27;ve heard #2.  I think any rational person understands that advertising has some degree of effectiveness.  After all, many bright minds from a variety of hard sciences have spent decades of their lives, and extraordinary sums of money studying human behavior for the explicit purpose of selling more shit.  Many of the largest companies in the world are advertising companies; before Google and Facebook there was the TV and Radio giants, who were massive, in spite of pretty serious regulations.&lt;p&gt;None of this would have happened if advertising wasn&amp;#x27;t effective.  At some point in time, people would have realized it didn&amp;#x27;t work and spent their money elsewhere.&lt;p&gt;There are two big issues that I see:&lt;p&gt;1) More views have driven down bids for ad views.  The ad industry is largely driven by companies bidding for views, so without a large influx of cash, the spike in views was going to depress ad impression prices.&lt;p&gt;2) Consumers have less discretionary money to spend, even if they wanted to, so the ROI on each view&amp;#x2F;click is going down.&lt;p&gt;Each of those alone would be cause for concern, but combined, they do pose a significant issue for Google, Facebook, and smaller content creators.</text></comment>