Mark Zuckerberg cooly plunked down $19 large last week for a SMS-like app that most Americans had never used, probably never will. The move was labelled bold, brilliant, strategic. Zuckerberg branded a badass, a visionary, the next Steve Jobs. I suspect had Zuckerberg offered, say, a mere $5 billion, the echo chamber would have suggested he foolishly overpaid.
One particularly interesting aspect about Facebook’s WhatsApp acquisition, beyond the fact that it generates roughly 0.001 the revenues of Apple’s iTunes group, is that it’s ad-free, unlike seemingly everything else in our expansive digital world. Which begs the question: how will Facebook ever make back that $19 billion?
A better question: how has Google already made so many billions from advertising? Or, better still: who are all these people making Google so much money by clicking on Google ads?
Maybe WhatsApp and Zuckerberg are ahead of the curve. After all, do you ever click on an ad? Ever? Do you know anyone who does? Haven’t you long since trained your mind, your eyes, to not even see the ads? Don’t you count down the seconds until you can SKIP AD on YouTube?
An interstitial takes control of your screen and you immediately click it shut. For those ads that make you watch before you can access your desired content, you sheepishly, guiltily, countdown a second or two, hoping the site owner can make a penny, then click again to get to the actual site. It’s only after shutting down your computer do you realize there were pop-under ads, which you hastily close. You open several tabs in your browser, then frantically search for the one tab where some automatic ad is playing, annoying you to no end.
It’s worse than spam.
This is how we fund the Internet? Still? Perhaps WhatsApp, should it ever come close to returning its investment, will lead us toward some grand new method of funding our digital lives.
Even if Google ads are better than every other ad network — a debatable position — the fact is that almost every single Google-based ad is of zero relevance to my life, an assault on my eyes and ears, a clear barrier to what I actually want. Yet the company continues to generate billions in profits off this digital flotsam.
Is it you? Who are the people still viewing these ads? Who are clicking on these ads? And how is it even remotely possible that after 15 years of gathering every scrap of information about everything I do online, plus many of my activities off-line, that Google ads are still so wildly untargeted to every single thing about me?
I buy a plane ticket to Atlanta, say, and for the following week after that I’m shown offers for plane tickets to Atlanta. They’re worse than the colleague who discovers you just bought a car and tells you he could have got you a deal.
I fly to Atlanta, dine out, meet colleagues, conduct business, take in a few sights, return home. Go online. Where I’m then inundated with display ads, served by Google, for things to do in Atlanta. This lasts for days, at least.
While writing this article — fact — I was blasted with Google ads advertising Google ads.
What more of ourselves — our personal information, our likes, our shares, our time, our attention, our eyes, our ears — can we give so that Google et al finally get digital advertising to be merely remotely useful to us? Google knows us, our location, our friendships, our searches. They know our intent, allegedly, yet ad after ad after interminable ad is rarely anything more than digital trash.
Last week — true story — I searched for an app that might help me find and pay for parking in San Francisco, for that day only. Gmail now insists on showing me ads for “parking deals.” This all seems rather inexcusable. All that money, all those brains, all those machines, a billion smartphones, a billion plus web users, and nearing the mid-point of the second decade of the 21st century and Google advertising doesn’t understand that I needed that parking spot last week despite my explicit intent.
How can a company worth over $400 billion, that inspires so much awe and fear not only in Silicon Valley but in China, Europe and beyond, be so bad at what it should be great at?
To be fair, when I go to Google.com to search for a very specific item, the topper most ad and the first five or so non-ad results are usually, though not always, sufficient for my needs. As for Gmail and YouTube, ads there are so consistently irrelevant as to be comical — some sort of meta-joke the Google singularity squad are playing at our expense, I imagine.
Maybe getting advertising right is like finding the cure for cancer. The more money we spend, the more time and resources we devote, the more we realize just how far away we are from the end goal.
I haven’t seen much of an improvement in ads now that most of America and a good portion of the world has migrated to smartphones. These devices know where we are. They know what we are doing, what we are searching for, what we are seeking on a map, what we are texting our friends, where we are checking in to — yet I am at a loss to recall even a single instance when a tiny Google-served ad at the bottom of my smartphone screen was even remotely worthy of clicking on.
What is Google doing with all our information?
Forget for just this moment any privacy implications surrounding what Google does and instead think of this: someone else, a complete stranger, has full access to your photo library, your entire search history, your movements and locations throughout the day, everyday, a record of all your app purchases, book downloads, pirated television programs. Don’t you think they would have a near-100% better idea of what you’re interested in than Google does?
Almost never right but at scale has magically made Google king of the Internet.
When I search on Google Maps on my desktop — the smartphone screen is too small for this — and when using a generic term, such as pizza, that ad, to be fair, is typically semi-relevant, though has yet to ever be my first choice. That’s the very best I can say about Google’s ads.
Nonetheless, in 2013, Google had an astounding $60 billion in revenues and a profit of just under $13 billion. They had a per-employee profit of $270,000.
I have no answers for this.
I do my best to stay abreast of high-tech, including, grudgingly so, ad tech. Not just pop-ups, pop-unders, banner ads, etc., but the actual technologies and platforms powering these. There is contextual advertising, native advertising, search ads, mobile search advertising, platforms that enable spot-buys in near real-time, technologies that seek to integrate our interests, our location, our friendships across all our screens, all in the hopes of offering better, higher-margin ads. I follow how Google is aggressively pushing Google+ to ensure that all the various services of theirs we use, Gmail and search, maps and more, can all be linked back to us, individually. That Google is making less per ad on mobile than on desktop is a topic I’ve become quite familiar with. I read that Yahoo is trying desperately to re-take control over its search and advertising functions.
But the big question remains: how is it these all work so very badly?
Somebody, anybody, please disrupt this industry.
Is this why Larry Page is spending so much money on Nest, on robots, driverless cars, Internet balloons, fiber and so much more — he knows the whole web advertising ecosphere is ultimately doomed? It can never be right enough, timely enough, personal enough to make any appreciable difference in our lives? Unfair? Ask yourself: Did anyone really believe even for a moment that digital advertising would be so bad come 2014?
Despite my keen awareness of the breadth and scale of the global Internet I am simply amazed each and every quarter to re-discover that so many people around the world are clicking on ads. Yet Google’s earning statement confirm just this. Google even continues to lead the industry in limiting ad fraud. The company recently purchased Spider.io, a start-up that seeks to limit fraudulent clicks. Per Google:
Advertising helps fund the digital world we love today — inspiring videos, informative websites, entertaining apps and services that connect us with friends around the world. But this vibrant ecosystem only flourishes if marketers can buy media online with the confidence that their ads are reaching real people.
Sounds well and good, but such acquisitions mostly only fuel my suspicions that digital advertising is a convoluted, confusing and inexplicable mess, the web equivalent of America’s healthcare system. Probably why at times, and despite how super-rich Google has become, I confess I think of digital ads as a con, a grift pulled not just on content creators, but on us users as well. We are bombarded with ads, companies base their business plan upon ad revenue dreams, ads litter nearly every public website on the planet, and yet in almost every single case and for nearly everyone I know they are a nuisance, an eyesore, almost always irrelevant, rarely of value, and quite possibly a calculated means of ensuring no other business models can thrive on the web.
Information wants to be monetized. Ads are middling succor. Funding the Internet went down the wrong path many years ago and we attempt to right it now simply by throwing in still more ads. Our shared loss.
Perhaps I should say nothing. Fact is, thanks to those billions of clicks and the billions of ad dollars they generate, we now have YouTube, the best search ever, free and accessible maps, a mobile operating system ready to power the world, even Gmail is probably still the best email service for most people. Nonetheless, I can’t help but take note that this is the year 2014 and we are still buried in meaningless, useless, annoying advertising and it doesn’t seem like it’s getting better, despite everything Google, Yahoo, Facebook and others have tried. Perhaps our best minds, our brightest engineers, should focus their talents elsewhere.