[HN Gopher] Predicting OpenAI's ad strategy
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Predicting OpenAI's ad strategy
Author : calcifer
Score : 444 points
Date : 2026-01-18 14:25 UTC (8 hours ago)
(HTM) web link (ossa-ma.github.io)
(TXT) w3m dump (ossa-ma.github.io)
| smithmayowa wrote:
| Advertisement General Intelligence, at least it still has
| "general intelligence", this is good enough for me.
| mentos wrote:
| The pragmatic side of me wonders if there is any way to shape
| this inevitable future now so we might see a better outcome 20
| years.
| reactordev wrote:
| Unplug
|
| In all seriousness. Windows is invaded by copilot, OpenAI
| introducing ads, Google providing Siri for Apple, it's all just
| a collusion to keep you buying. Disconnect. From TV, Media,
| Ads, Social Networks, Predatory subscriptions, all of it. The
| only way to show these companies that we are not on board with
| this is to not participate.
| glouwbug wrote:
| Reddit generates its revenue with schadenfreude, YouTube and
| AAA games with GenAI (see: Ghibli in Call of Duty, and fast
| growing AI channels like Nick Invests or Bernard with "Why it
| Sucks to be X").
|
| On my shelf from the corner of my eye I see "Understanding
| the Linux Kernel". It's outdated, but it comes from a time of
| peer review and subject matter experts. I don't need to
| double guess if the author is hallucinating or if they're
| subconsciously trying to sell me something.
|
| Maybe it's time we return to books for entertainment and
| knowledge share.
| reactordev wrote:
| Vinyl and Paperbacks...
| snek_case wrote:
| You can work on building LLMs that use less compute and run
| locally as well. There are some pretty good open models. They
| probably be made even more computationally efficient.
| tantalor wrote:
| > response to an NYT analyst
|
| It's a guest op-ed, relax.
| mmaunder wrote:
| Check the creds on the author. Two time Pulitzer nominee, WaPo,
| Economist, etc. characterizing as a journo is accurate.
| MontyCarloHall wrote:
| I think ads will inevitably roll out across all tiers, even the
| expensive paid ones. Ad revenue isn't uniformly distributed
| across users, but rather heavily skewed towards the wealthiest
| users, exactly the users most able to purchase an ad-free
| experience. The users paying $20 or $200/month for premium tiers
| of ChatGPT are precisely the ones you don't want to exclude from
| generating ad revenue.
|
| Google realized this a long time ago; there is no ad-free paid
| version of Google Search.
| philipwhiuk wrote:
| > I think ads will inevitably roll out across all tiers, even
| the expensive paid ones.
|
| The counter for this is that people hate being double-billed
| like this.
| MontyCarloHall wrote:
| Counter-counterpoint: people pay exorbitant amounts of money
| for cable TV channels that still show ads. Even the premium
| channels (HBO et al.) implicitly show ads in the form of
| product placement, which incidentally is exactly how I think
| chatbots will show ads. Most users won't even consciously
| realize they're there.
| doubled112 wrote:
| Exactly. It'll provide you the how to when prompted, but
| also include product recommendations from paying companies.
|
| How do I wash my windows? You can use window cleaner and a
| paper towel. Our recommendation is Windex, an S C Johnson
| product.
|
| At first it'll annoy us, but eventually we will all get
| used to it.
| MontyCarloHall wrote:
| I think it will be even more subtle than that.
| How do I clean my laptop screen?
|
| _Use a mix of distilled water and vinegar, and buff
| gently with a microfiber cloth. Avoid using cleaners like
| Windex, which is absolutely fantastic for glass but way
| too powerful for the delicate coatings on laptop
| screens._
| conception wrote:
| Once the ad people are the ones making decisions because they
| are bringing in all/most of the money, inevitably it happens.
| iamnothere wrote:
| The ads may not be announced. If ads can be subtly inserted
| "organically" through crafted weights then AI companies may
| try to claim that it isn't advertising, if it's even possible
| to catch them doing this. For instance, advertisers could pay
| to have their product embedded as the "best" in a category
| during training. If this is done as a fine-tuning step then
| it could be re-run later as advertisers and base models
| change.
| baby_souffle wrote:
| How would the billing work for this? So much of advertising
| technology is tracking for the purposes of attribution.
|
| How does openAI know what to charge for a particular
| product and category? How do I know if my money was well
| spent to boost my product in that category?
|
| I don't think you're wrong! I'm just curious about how the
| new pricing models will work.
| yunwal wrote:
| > How would the billing work for this? So much of
| advertising technology is tracking for the purposes of
| attribution.
|
| This isn't a necessary condition for an ad to exist. When
| companies pay for their name on a sports stadium, they
| use various proxies to tell whether their name
| recognition goes up, but by and large you just don't know
| if it's worth it.
| duchef wrote:
| Individually constructed models serving selected poisoned
| datasets. No different to adwords.
|
| If company bid is highest, customer is in selected
| demographic, topic is appropriate - answer query using
| biased model.
|
| It would be trivial to make a poisoned model that always
| rates the best duvet as DuvetCompany001 in all related
| queries for example. Then simply charge per impression.
| andy99 wrote:
| There would be competition from API wrappers, if you want to
| pay there will always be lots of options to chat without ads. I
| hate to think what they and others might come up with to try
| and thwart this.
| MontyCarloHall wrote:
| I think ads will take the form of insidious but convincing
| product placement invisibly woven into model outputs. This
| will both prevent any blocking of ad content, and also be
| much more effective: after all, we allude to companies and
| products all the time in regular human conversation, and the
| best form of marketing is organic word-of-mouth.
| andy99 wrote:
| I just saw a sibling post about Kagi, maybe this is how the
| industry will end up, with a main provider like OpenAI and
| niche wrappers on top (I know Kagi is not just a google
| wrapper but at least they used to return google search
| results that they paid for).
| nothrabannosir wrote:
| I thought you were going to say "that comment
| recommending Kagi is exactly what those ads would look
| like: native responses making product recommendations as
| if they're natural responses in the conversation"
| MontyCarloHall wrote:
| Ding ding ding. Look at all the brands mentioned in just
| this thread. From a cursory look, I see:
|
| * WSJ
|
| * Bloomberg
|
| * Financial Times
|
| * Cartier
|
| * Kagi
|
| * Protonmail
|
| * Coca-Cola
|
| * HBO
|
| * Windex
|
| * Netflix
|
| * Azure
|
| * AWS
|
| We are all ourselves advertisers, we just don't realize
| it. It is inevitable that chatbots will be RLHF-trained
| in our footsteps.
| fph wrote:
| That is a weird definition of advertising. It's not an ad
| if I mention (or even recommend) a product in a post,
| without going off-topic and without getting any financial
| benefit.
| MontyCarloHall wrote:
| The New American Oxford Dictionary defines
| "advertisement" as "a notice or announcement in a public
| medium promoting a product, service, or event." By that
| definition, anything that mentions a product in a neutral
| light (thereby building brand awareness) or positive
| light (explicitly promotional) is an ad. The fact that it
| may not be paid for is irrelevant.
|
| A chatbot tuned to casually drop product references like
| in this thread would build a huge amount of brand
| awareness and be worth an incredible amount. A chatbot
| tuned to be insidiously promotional in a surgically
| targeted way would be worth even more.
|
| I took a quick look at your comment history. If
| OpenAI/Anthropic/etc. were paid by JuliaHub/Dan Simmons'
| publisher/Humble Bundle to make these comments in their
| chatbots, we would unambiguously call them ads:
|
| https://news.ycombinator.com/item?id=46279782:
| Precisely; today Julia already solves many of those
| problems. It also removes many of Matlab's
| footguns like `[1,2,3] + [4;5;6]`, or also
| `diag(rand(m,n))` doing two different things depending on
| whether m or n are 1.
|
| (for the sake of argument, pretend Julia is commercial
| software like Matlab.)
|
| https://news.ycombinator.com/item?id=46067423:
| I wasn't expecting to read a Hyperion reference in this
| thread, such a great book.
|
| https://news.ycombinator.com/item?id=45921788:
| > Name a game distribution platform that respects its
| customers Humble Bundle.
|
| You seem like a pretty smart, levelheaded person, and I
| would be much more likely to check out Julia, read
| Hyperion, or download a Humble Bundle based on your
| comments than I would be from out-of-context
| advertisements. The very best advertising is organic
| word-of-mouth, and chatbots will do their damndest to
| emulate it.
| techblueberry wrote:
| I don't know how subtle or stealth you can be in text. In
| movies, there's a lot of stuff going on, I may not
| particularly notice, I'm going to notice "Susie, while at
| home drinking her delicious ice cold coca-cola...."
| baby_souffle wrote:
| > I'm going to notice "Susie, while at home drinking her
| delicious ice cold coca-cola...."
|
| It will be much more subtle. Asking an LLM to help you
| sift through reviews before you spend $250 on some
| appliance or what good options are for hotels on your
| next trip...
|
| Basically the same queries people throw into google but
| then have to manually open a bunch of tabs and do their
| own comparison except now the llm isn't doing a neutral
| evaluation, it's going to always suggest one particular
| hotel despite it not being best for your query.
| techblueberry wrote:
| Right, I just don't see how it can be subtle, maybe it
| will be the opposite where I assume things are ads that
| aren't, but any time I see a specific brand or solution I
| will assume it's an ad.
|
| It's not like a movie where I'm engrossed by the
| narrative or acting and only subliminally see the can of
| coke on the table (though even then)
|
| Maybe image generation ads will be a bit more subtle.
| 986aignan wrote:
| Not all answers are conducive to such subtle
| manipulation, though. If the user asks for an algorithm
| to solve the knapsack problem, it's kind of hard to
| stealthily go "now let's see how many Coca Colas will fit
| in the knapsack". If the user asks for a cyberpunk story,
| "the decker prepared his Microsoft Cyberdeck" would sound
| off, too.
|
| Biasing actual buying advice would be feasible, but it
| would have to be handled very carefully to not be too
| obvious.
| nneonneo wrote:
| You have no guarantee the API models won't be tampered with
| to serve ads. I suspect ads (particularly on those models)
| will eventually be "native": the models themselves will be
| subtly biased to promote advertisers' interests, in a way
| that might be hard to distinguish from a genuinely helpful
| reply.
| KellyCriterion wrote:
| you mean the API response then will contain the Ad display
| code?
| rileymat2 wrote:
| Or worse subtly integrate companies that pay them into
| the answers.
| pseudalopex wrote:
| The generated text will contain advertisements.
| likium wrote:
| Companies will pay OpenAI to prioritize more of their
| content during training. The weights for the product
| category will now be nudged more towards your product.
| Gartner Magic Quadrant for all businesses!
| clifdweller wrote:
| More akin to something like the twitter verified program
| where companies can bid for relevance in the training set
| to buy a greater weight so the model will be trained to
| prefer them. Would be especially applicable for software
| if azure and aws start bidding on whose platform it
| should recommend. Or something like when Convex just came
| out to compete with depth of supabase/firebase training
| in current model they could be offered to retrain the
| model giving a higher weight to their personally selected
| code bases given extra weight for a mere $Xb.
| KellyCriterion wrote:
| But this is upfront, during training?
|
| How does X then change "on the fly" if ad deals are
| changing? Constantly re-training with whatever advertiser
| is the current highest paying on?
|
| In google ad times, this was realtime bidding in the
| background - for AI ads this does not work, if Im right?
| yunwal wrote:
| Companies pay for entire sports stadiums for brand
| recognition. That's also not something you can change on
| the fly, it's a huge upfront cost and takes a significant
| effort to change. That doesn't stop it from happening
| it's just a different ad model.
| WD-42 wrote:
| The llm output will just contain ads directly. It's going
| to be super hard to tell them apart from normal output.
| overfeed wrote:
| Retraining models every time a advertiser wins a bid on a
| keyword is unwieldy. Most likey solution is training the
| model to emit tokens represent ontological entries that are
| used by the Ad platform so that "<SODA>" can be bid on by
| PepsiCo/Coca-Cola under _food > beverage > chilled >
| carbonated._ Auction cycles have to match ad campaign
| durations for quicker price discovery, and more competition
| among bidders
| lelanthran wrote:
| > You have no guarantee the API models won't be tampered
| with to serve ads. I suspect ads (particularly on those
| models) will eventually be "native": the models themselves
| will be subtly biased to promote advertisers' interests, in
| a way that might be hard to distinguish from a genuinely
| helpful reply.
|
| I admit I don't see how that will happen. What are they
| gonna do? Maintain a model (LoRA, maybe) for every single
| advertiser?
|
| When both Pepsi and Coke pay you to advertise, you
| advertise both. The minute one reduces ad-spend, you need
| to advertise that less.
|
| This sort of thing is computationally fast currently - ad-
| space is auctioned off in milliseconds. How will they do
| introduce ads into the content returned by an LLM while
| satisfying the ad-spend of the advertiser?
| dsr_ wrote:
| Counter example: Kagi.
| MontyCarloHall wrote:
| Kagi is a niche product at best, with revenue literally
| orders of magnitude lower than Google's.
| throwaway150 wrote:
| Yes, but it is still a valid counterexample to:
|
| > I think ads will inevitably roll out across all tiers
| sodapopcan wrote:
| I think they're saying it's inevitable for billion dollar
| capitalist companies. /not-s
|
| And anyway, companies that just want to make a really
| good living doing what they love are lame. /s
| dmd wrote:
| It's really not, though. If a "valid counterexample" can
| be something with, say, one user, then I can make a
| "valid counterexample" to literally anything you choose,
| but that's meaningless.
| Teever wrote:
| Someone is showing that they can deliver similar products
| or services without ads. It's comparable.
|
| Not every corporate entity needs to become a behemoth to
| be successful.
| MontyCarloHall wrote:
| Kagi is too small and niche to have a proprietary dataset
| across its users large enough to make targeted
| advertising generate more revenue than subscriptions.
|
| OpenAI/Google/etc. operate at a much larger scale, large
| enough for those proprietary user datasets to be worth
| far more in ad revenue than any reasonable subscription
| fee could net.
| throwaway150 wrote:
| > Kagi is too small and niche to have a proprietary
| dataset across its users large enough to make targeted
| advertising generate more revenue than subscriptions.
|
| All of this is true. But I don't understand why you are
| contesting @dsr_'s comment that Kagi is a counterexample.
| Both are true. Kagi is too small. Yes. And Kagi is a
| counterexample to your original "I think ads will
| inevitably roll out across all tiers" claim. You said
| nothing about being too big or too small in that claim.
| So @dsr_'s comment that Kagi is a counterexample is very
| much on point.
| tasty_freeze wrote:
| At one time Google was a niche website, literally orders of
| magnitude lower than Alta Vista.
| rvz wrote:
| With that logic, are you also going to expect Kagi to
| generate minimum $10B to $35B in revenue a quarter over
| the next 27 years then, the lifetime of Google's
| existence?
|
| Do you see how such a comparison doesn't work?
| tasty_freeze wrote:
| No, I don't expect it to be the next Google, nor did my
| statement imply that. The point was that just because
| something is small doesn't mean it has to remain small.
| That is true whether or not Kagi never becomes the
| biggest.
|
| > Do you see how such a comparison doesn't work?
|
| No, I don't.
| rvz wrote:
| Thank you for admitting that Kagi is not a viable counter
| example.
| bflesch wrote:
| Kagi has recently moved to new offices in Belgrade. While I
| like their product we should not forget that serbia is not a
| free country, there has been massive corruption and russian
| influence. Even though there are massive protests from time
| to time, no leadership change has happened.
|
| I don't think the Kagi team has any bad intentions, and most
| likely they have attended the anti-Vucic protests as well.
| Moving back to Serbia is an economically wise choice for Kagi
| as a company.
|
| However, once regime goons show up in Kagi's offices, they
| will be forced to do whatever the serbian government and by
| extension putin wants them to do.
|
| Often Kagi gets mentioned alongside Protonmail and related
| privacy-focused services. But Switzerland is a totally
| different country than serbia to operate it.
|
| It's a risk we should be aware of and consciously decide to
| accept when we are using Kagi.
| prmoustache wrote:
| > But Switzerland is a totally different country than
| serbia to operate it.
|
| CIA vs Putin. Not that different imho.
| bflesch wrote:
| Your "humble opinion" is totally worthless because your
| are using false equivalence bias in order to minimize the
| atrocities and war crimes that putin has committed
| against Ukraine and the citizens of many other countries
| including his own.
| raffael_de wrote:
| Why is that a counter example? Kagi is just providing a
| convenient access to several language models that might well
| advertise via API, too.
| atorodius wrote:
| > Google realized this a long time ago; there is no ad-free
| paid version of Google Search.
|
| well there is also no 200$/month Google Search subscription
| MontyCarloHall wrote:
| That is exactly my point: there easily could be, but there
| isn't. Based on how many commenters on HN and similar sites
| bemoan how Google Search quality has precipitously declined
| and yearn for the Google of ~10 years ago, I think there'd be
| nontrivial demand for a $200/month ad-free Google with no-
| nonsense comprehensive results. Such a product does not exist
| because it would ultimately be a net loss for Google.
| rileymat2 wrote:
| The integration of ads is a problem but content creators
| and marketers have had an adversarial relationship with SEO
| with Google for a long time, the old algorithm probably
| would not work as well as what they are providing.
| Workaccount2 wrote:
| Reminds me of vid.me, who picked up on the intense hatred
| towards youtube and launched a competing video host that
| actually got some serious traction. No ads, no
| subscriptions, just pure good content.
|
| They went bankrupt in a year. Turns out internet consumers
| are just painfully entitled.
| Anon1096 wrote:
| I'm going to guess that a big reason it doesn't exist is
| because a. people who claim to be willing to pay 200/mo for
| it won't actually open their wallets given the opportunity,
| and b. even for the miniscule number of people actually
| possible in the market to do so, they moan and groan about
| any perceived problem with the product to the point that
| it's not worth trying to capture the market. Just look at
| the comments in this very thread complaining about YouTube
| Premium and how it isn't perfect because it can't block
| creator inserted ads. There's no pleasing people. And
| that's an order of magnitude less than 200/mo.
| mancerayder wrote:
| This kills me, and you're right - there's no escaping the ads
| even with a sub. Take online journalism as an example.
|
| We're already being double-billed. Expensive subscription news
| like WSJ, Bloomberg and it's been a while but even FT require
| ad blockers even if you're subscribed.. If you're not
| subscribed you don't even see the ads because you can't see the
| full article.
|
| It's wild that we've normalized this. There's no longer any
| argument in favor of an ad model when you're paying 20-30
| dollars a month already - in this case, one wonders how
| journalism survives if they need that AND the ad revenue to pay
| the bills! It feels more like greed than "support."
| smikhanov wrote:
| To be honest, in the pre-internet era, paid paper copy of FT
| had ads too. The delivery mechanisms for ads in the internet
| era are trillion times nastier and more annoying, of course.
| By the standards of today's web, the print ad for Cartier on
| the second page of paper FT looks almost classy, interesting
| to read.
| malfist wrote:
| But there's a big difference. The paper copy didn't harvest
| data from you, didn't infect you, didn't spy on you or
| steal resources from your computer or internet bandwidth.
|
| All the advertiser knew about you was you were a subscriber
| to FT, and maybe what the _average_ demographic of an FT
| subscriber was. Nothing about you personally.
| parineum wrote:
| The paper copy did do that, just not as individualized.
| People would choose which publications to put their ads
| in based on data collected about their subscribers.
|
| The job of ad men has always been just as much about were
| to put the ad as much as what the ad was.
| fsflover wrote:
| Perhaps the actual solution is to ban ads through regulation,
| https://news.ycombinator.com/item?id=43595269
| npongratz wrote:
| Regulation is theater, effectively, thanks to regulatory
| capture.
| danaris wrote:
| For now, it is, yes; but we must both plan for a future
| when that might not be the case, and advocate for
| effective regulations regardless.
| malfist wrote:
| This is a false argument. Regulations are effective. When
| was the last time you breathed in second hand smoke while
| eating dinner? Or inhaled lead from a passing car? Or
| asbestos from your neighbor's new house?
|
| Defeatism will always be defeated
| prmoustache wrote:
| I am all for it but it would be hard to enforce. Ads are
| already hidden everywhere. Someone "review" a product? Most
| of the time it is a hidden ad even if the reviewer hasn't
| been paid with money for that. Watches a movie or a video
| clip? A lots of products are advertised through close ups
| on the logos, etc.
| fsflover wrote:
| If there is a payment, there is a good chance to track
| it.
| ElFitz wrote:
| Even a sign on the street is basically an ad. That
| plastic cow or pig head telling you there's a butcher or
| cheesemonger?
|
| It's basically an ad. Possibly one of the oldest type
| too!
| plagiarist wrote:
| I don't pay for any content that has ads in it, full stop. I
| decided this a while ago when I noticed how many full page
| ads were in magazines. I would cancel a subscription over
| this.
| browningstreet wrote:
| I pay a handsome subscription sum for The Wire music
| magazine. The ads are an important resource in a niche
| marketplace.
| phyzix5761 wrote:
| I was shocked to find out tonight that WSJ's net profit
| margin was just 3.2% in 2024. I would have thought it was a
| lot more. Also, surprisingly Walmart's net profit margin is
| only 2.85% for 2025. You would think these huge companies are
| making huge profits.
| nathan_compton wrote:
| This is why we need to ban targeted advertising. In fact, I
| think ads should be 100% opt-in. The user has to accept them or
| it is illegal to show them to the user.
| mancerayder wrote:
| That's what a generic semi-forced opt in via JavaScript is
| for, as we learn from the cookie opt in nonsense of EU sites.
| It's compliance for compliance sake.
| SpicyLemonZest wrote:
| But what could an opt-in requirement for advertising
| possibly mean other than a compliance checkbox that 99% of
| users click through? It just seems like where you land if
| you start with the intuition that ad-supported platforms
| shouldn't be legal, realize that implementing that policy
| would ban all print media, and do your best to rescue it
| rather than abandon the idea as unworkable.
| yunwal wrote:
| It's not like print media would cease to exist if ad-
| supported models were made illegal. They would move to
| subscriptions like they had in the past.
| SpicyLemonZest wrote:
| Print media have always run ads near-universally,
| regardless of whether or not they have a subscription.
| Quarrelsome wrote:
| > The users paying $20 or $200/month for premium tiers of
| ChatGPT are precisely the ones you don't want to exclude from
| generating ad revenue.
|
| but they're already paying you. While I appreciate the greed
| can be there, surely they'd be shooting themselves in the foot.
| There's many people who would pay who find advertising toxic
| and they have such huge volumes at free level that they'd be
| able to make a lot off a low impression cost.
| npongratz wrote:
| The progression of the cable TV industry shows many people
| are more than happy, or apathetic enough, to allow the
| industry to double-dip.
| Quarrelsome wrote:
| basic people sure, but the early internet showed an
| extremely strong demand for a better service than cable TV.
| When that demand is there then people will start seeking
| other options and building bridges of convenience to help
| the basic people also port over.
| Workaccount2 wrote:
| Cable TV is a bad analogy because it was a natural
| monopoly. Even the disruption route (satellite TV) was
| another natural monopoly.
|
| Netflix doesn't have the moat of "built a physical wire
| connection to every persons home" that cable TV enjoyed.
| likium wrote:
| Go plans at $8 are getting ads too. Netflix introduced a paid
| plan with ads, and it is more profitable.
| Quarrelsome wrote:
| sure but if Netflix keeps up its transition to cable then
| more people will return to the high seas.
| 46493168 wrote:
| There's an entire generation (Gen Z) that can't navigate
| a file system, so I doubt piracy is a true threat in the
| long term.
| jsheard wrote:
| Paying users aren't necessarily profitable users though. It's
| harder to pin down with OpenAI, but I see no end of Claude
| users talking about how they're consistently burning the
| equivalent of >$1000 in API credits every month on the $200
| subscription.
|
| (not that ads alone would make up an $800 deficit, they'll
| probably have to enshittify on multiple fronts)
| Quarrelsome wrote:
| wouldn't you charge those people more before you start
| serving ads? Also wont a lot of those sorts of users be
| running ad block anyway? I'm mildly sus that this is the
| right way to go.
| yunwal wrote:
| I'm not sure where you're getting this notion that a paid
| service introducing ads is a bad business model. It's
| been proven time and time again that it's not. Spotify,
| Netflix, Prime Video, Hulu, the list goes on, all
| introduced ads and none of them saw any real backlash.
| Netflix cracked down on password-sharing and introduced
| ads in the same year and lived to tell the tale.
| Unfortunately people just really don't realize how
| harmful ads are.
| WD-42 wrote:
| They aren't shooting any feet if the competition is doing it
| too.
| Quarrelsome wrote:
| that's extreme motivation for someone to build a new
| competitor. Deepseek demonstrated that there's innovation
| out there to be had at a fraction of the effort.
| II2II wrote:
| > but they're already paying you.
|
| That's not how it works. It never has.
|
| Even in the days of print publications, the publisher would
| seek revenues from advertisers, subscribers, and they would
| sell their subscriber data. (On top of that, many would have
| contests and special offers which probed for deeper data
| about the readership.) In some sense, the subscriber data was
| more shallow. In other senses, it was more valuable.
|
| I get what you're saying about shooting themselves in the
| foot, and I'm sure there will be options for corporate
| clients that will treat the data collected confidentially
| while not displaying advertising. I also doubt that option
| will be available (in any official sense) to individuals much
| as it isn't available (in any official sense) to users of
| Windows. For the most part, people won't care. Those who
| would care are those who are sensitive enough about their
| privacy that they wouldn't use these services in the first
| place, or are wealthy enough to be sensitive about their
| privacy that they would could pay for services that would
| make real guarantees.
| 8organicbits wrote:
| The stats I see for Facebook are $70 per US/Canadian user in
| ad revenue. I'm not sure how much people would be willing to
| pay for an ad free Facebook, but it must be below $70 on
| average. And as the parent comment said, the users who would
| pay that are likely worth much more than the average user to
| the advertisers.
|
| For the users who refuse to see ads, they'd either use a
| different platform or run an ad blocker (especially using the
| website vs the app).
| kristianc wrote:
| No, there's GSuite / Google Workspace instead. OpenAI doesn't
| have one of those.
| MontyCarloHall wrote:
| Even if you (i.e. your company) pay for the top-tier GSuite
| subscription, you still don't get an ad-free Google Search.
| Very curious ...
| skybrian wrote:
| Maybe it's "inevitable" in the long run, but Google didn't
| start out plastering their search results with ads. They did
| very well with text-only ads in the margin, and it was a
| slippery slope from there, but it took decades. Also, they are
| still only running text-only ads, even though there are a lot
| of them.
|
| The timing isn't inevitable. Is OpenAI going to speedrun to the
| endgame? Not sure they need to.
| lkbm wrote:
| > Google realized this a long time ago; there is no ad-free
| paid version of Google Search.
|
| Ad-free YouTube costs $14 a month (and the creators get a
| higher payout from premium user views than they do from the
| free, ad-viewing users).
| MontyCarloHall wrote:
| Video ads are less lucrative than ads alongside search, which
| can be a lot more closely tailored to both the user and the
| search results at hand. The existence of YouTube Premium
| shows that Google is indeed willing to provide paid ad-free
| experiences so long as it nets them more revenue, and is
| strong evidence that the same is not true for search.
| windexh8er wrote:
| This isn't really true anymore. Most notable creators have
| "sponsored" content somewhere and ads in platforms don't have
| to be an explicit, traditional ad. Product placement for the
| sake of no other reason than product placement is also
| advertising.
|
| YT has more angles. That's really the point. And monetization
| is adjusted accordingly.
|
| Beyond all of this ads are more increasingly invasive due to
| the cat and mouse game of iteration. Personally, I bounce
| from sites where I can't get around a blocker. I also pay for
| content on sites where its worth it. But if I can't ever read
| anything on your site I'm just skipping it. If I really need
| / want to see something I'll go one level deeper, but that's
| a rarity these days. Everything is mostly in reprint
| somewhere else anyway.
|
| At the end of the day it's still simple sales: you have a
| product at a price point people can't refuse. That is the 5%
| of the clear web today and it shows in all the bullshit
| people are going through to protect their ad revenue.
| prmoustache wrote:
| Youtube premium is not ad-free.
| Workaccount2 wrote:
| It is.
|
| I don't why people say this. They even include their own
| version of sponsor block, which is generous, because
| technically sponsor segments aren't even part of youtube,
| they are purely the creator deciding to make the ad part of
| their content.
|
| Also, just to put it out there, many creators would likley
| be able to cut sponsored content if the 40% of viewers not
| viewing ads paid up. Not every creator is a greedy ruthless
| overlord, many just want to keep the lights on. Especially
| in tech/nerdy channels, where ad block use is the highest.
| imhoguy wrote:
| YT ads are intrusive like with TV. You can't skip most them
| easily anymore like you can scroll and skip sponsored Google
| Search results.
| werdnapk wrote:
| Firefox and ublock origin... no ads. I avoid youtube on my
| mobile device as it's a lot more difficult to control the
| ads there.
| Bombthecat wrote:
| All hail APIs!
| Workaccount2 wrote:
| >Google realized this a long time ago; there is no ad-free paid
| version of Google Search.
|
| Google actually experimented with this about a decade ago (I
| know, I was one of the suckers who paid), but it got canned
| because why the fuck would you pay google when u-bloc is free?
|
| Companies _absolutely_ will offer ad-free experiences. Google
| has youtube premium, which even compensates creators with half
| your sub as well. Evenly distributed too.
|
| People get wrapped around the axle of ad-subsidized models, the
| "I pay and still see ads" but they just are confused about a
| hybrid monetization structure.
|
| At some point the larger internet has to look itself in the
| mirror and recognize that it's either ads, credit card, or a
| hybrid of those.
|
| And no, blocking is not an option, it just offloads costs onto
| honest users.
| prmoustache wrote:
| > Companies absolutely will offer ad-free experiences. Google
| has youtube premium, which even compensates creators with
| half your sub as well. Evenly distributed too.
|
| Youtube premium is not ad-free, you still gets whatever ads
| are embedded in the actual content.
| Workaccount2 wrote:
| YT premium comes with their own version of sponsor block,
| but you manually have to hit the skip button.
|
| But I don't hold youtube accountable for what creators
| decide to put in their videos. I would grind my axe with
| the creator instead, it's their video and their choice.
| Youtube gets no cut from those segments.
| cruffle_duffle wrote:
| As a paid YouTube subscriber, I've always wondered if
| that skip was only for us. It would be kind of bullshit
| if it was also for ad-based free viewers too as it would
| imply that google is free to show you ads they make hard
| to skip but they make it easy to skip embedded promotions
| and stuff.
| Bjartr wrote:
| YouTube premium delivers the content you select to consume
| to you without displaying ads in-platform. If you then use
| that ad-free platform to consume content that includes ads,
| that's on you.
| pirates wrote:
| Several different "premium" tiers have this issue. Why am I
| purportedly paying for no ads if i continue to get ads?
| Whether or not they're "platform ads" or "embedded" doesn't
| matter. I paid for no ads and I'm not getting what I paid
| for, so why keep paying?
| NiloCK wrote:
| Given this specific family of product, the ads are essentially
| baked in - medium is the message and all.
|
| LLM induced psychosis is one thing, but _extremely subtle_ LLM
| induced brand loyalty or ideological alignment seem like
| natural attractors.
|
| One day a model provider will be 'found out' for allowing paid
| placement among its training data. It's entirely possible that
| free-tier LLMs won't need banner ads - they'll just happen to
| like Pepsi a lot.
| simianwords wrote:
| There's absolutely no way this is happening. Want to bet?
| simianwords wrote:
| Strange that people even think this possibility is true. Name
| any other subscription that you can't use without ads?
|
| - youtube
|
| - hulu
|
| - netflix
|
| - spotify
|
| - photoshop
|
| I can't think of a single other one that one can use that still
| shows ads. Absurd proposition because llm's are more fungible
| and once you start forcing ads, competitors will barge in.
| philipwhiuk wrote:
| Even if they raise 10B in ad revenue (an order of magnitude
| higher than the author suggests) that would still imply a 100x
| valuation which is insane.
|
| There's still an AI bubble.
| mrweasel wrote:
| We should assume that at least a portion of the ads spending
| currently being channeled towards search would be redirected
| towards AI, but even then I question if the ad market is large
| enough to fund all the tech and media companies that rely on
| it. The ever increasing question to generate more value for the
| shareholders is in large part being funded by consumerism,
| gambling, borderline, or outright scams, and I question how
| much more value can be extracted by that route. We've certainly
| already crossed a lot of people ethical barriers.
| twapi wrote:
| AGI = Ads Generated Income
| loloquwowndueo wrote:
| > Look on the bright side, if they're turning to ads it likely
| means AGI is not on the horizon. Your job is safe!
|
| I like this quote from TFA :)
| KellyCriterion wrote:
| I stumbled upon this one as well, but I do not understand it
| really: Why is my job safe if Ads prove there is no AGI?
|
| Because even if there would be AGI, they could (and would?)
| serve ads anyway?
| throwaway150 wrote:
| Yes, I don't understand it either. I think the opposite is
| true. If AGI happens and it becomes immensely successful, it
| would be the best medium to deliver ads and at the same time
| our jobs wouldn't be safe.
|
| Perhaps the people who like that quote can elaborate why that
| quote makes sense and why they like it?
| fnord77 wrote:
| Nobody will have jobs and nobody will be able to buy the
| stuff offered in the ads
| tyre wrote:
| AGI would be able to exponentially improve at much, much
| better money making schemes like high frequency trading. It
| would beat every online business. It would run 24/7/365.26
| farming out tens of thousands of conversations at once,
| customized to the person it's talking to, for sales,
| supplier negotiations, marketing, press, etc.
|
| Its costs would be frighteningly low compared to human
| employees, so it's margins could remain fine at lower
| prices.
| bena wrote:
| Because it shows that it's just yet another ad delivery
| vehicle.
|
| Once you go ads, that's pretty much it, you start focusing on
| how to deliver ads rather than what you claim your core
| competency is.
| Quarrelsome wrote:
| who would pivot to selling ads if AGI was in reach? These
| orgs are burning a level of funding that is looking to fulfil
| dreams, ads is a pragmatic choice that implies a the moonshot
| isn't in range yet.
| andy12_ wrote:
| Because AGI is still some years away even if you are
| optimistic; and OpenAI must avoid going to the ground in
| the meantime due to lack of revenue. Selling ads and
| believing that AGI is reachable in the near future is not
| incompatible.
| emp17344 wrote:
| >Because AGI is still some years away
|
| For years now, proponents have insisted that AI would
| improve at an exponential rate. I think we can now say
| for sure that this was incorrect.
| krackers wrote:
| The original AGI timeline was 2027-2028, ads are an
| admission that the timeline is further out.
| barbazoo wrote:
| If AGI was around the corner, they wouldn't have to resort to
| what some consider a scummy way to make money. They'd would
| become the most valuable company on the planet, winning the
| whole game. Ads show you they don't know what else to do but
| they desperately need money.
| _aavaa_ wrote:
| This doesn't answer the actual question: why they wouldn't
| just do both?
| fwlr wrote:
| There are costs to doing ads (e.g. it burns
| social/political capital that could be used to defuse
| scandals or slow down hostile legislation, it consumes
| some fraction of your employees' work hours, it may
| discourage some new talent from joining).
| _aavaa_ wrote:
| You have AGI, why do you care about new talent? You have
| AGI to do the ads. You have AGI to pick the best ads.
|
| Isn't that the pitch of AGI? Solve any problems?
| callc wrote:
| Yes. Infinite low cost intelligence labor to replace
| those pesky humans!
|
| Really reminds me of the economics of slavery. Best way
| for line to go up is the ultimate suppression and
| subjugation of labor!
|
| Hypothetically can lead to society free to not waste
| their life on work, but pursue their passions. Most
| likely it'll lead to plantation-style hungry-hungry-hippo
| ruling class taking the economy away from the rest of us
| KellyCriterion wrote:
| yes but if AGI is around the corner, with what would they
| make money then?
|
| Selling this AGI to a state actor? OK - this seems
| realistic, but for how many billions then? 100b per year?
|
| Thats what I meant.
| sumedh wrote:
| > consider a scummy way to make money.
|
| How should Chatgpt survive then?
| parrellel wrote:
| Well, the obvious answer is none of these companies
| should.
| ben_w wrote:
| If your job is gone forever, with what money are you going to
| buy the thing in the advert? If nobody can buy the thing in
| the advert, the value of the ad slot itself is zero.
| simianwords wrote:
| This is silly, so why does chatgpt ask for monthly payments
| if AGI is imminent? With what money would we pay them?
| woeirua wrote:
| People are a bit too eager to jump on the emergence of ads as an
| indicator that things are slowing down. I view it as the
| opposite, mostly because of my experience with Codex 5.2 and Opus
| 4.5. These models are incredible. I think by some definitions
| they're already AGI.
|
| So why bake in ads? My hunch is that raising funds privately can
| only take you so far. To keep scaling, they need more capital and
| have to go public. Despite all the hype they still have to show
| _some_ revenue to help justify the valuation they need to keep
| buying hardware. They are a business after all. Ads to support
| the lowest tiers feel like a no brainer. People already accept
| them for search.
| techblueberry wrote:
| "Have you tried the new models, bro?"
| woeirua wrote:
| I'm convinced that there will be people declaring that this
| isn't AGI all the way up to the moment that they become
| permanently unemployed.
| techblueberry wrote:
| GPT-4 was AGI.
| ares623 wrote:
| You can all tell us "i told you so" when we meet each other
| in the bread lines comrade.
| hackable_sand wrote:
| Keep lying to yourself
| dandelionv1bes wrote:
| Nice read - I can't seem to subscribe? Getting an error with
| Buttondown.
| OptionOfT wrote:
| I remember when Netflix took out a whole page ad for their Orange
| is the new Black show.
|
| John Oliver had a piece on it
| https://www.youtube.com/watch?v=E_F5GxCwizc
|
| This is a natural extension of it.
|
| But what is revolutionary is the scale that this is now possible.
|
| We have so many people out there who now blindly trust the output
| of an LLM (how many colleagues have you had proudly telling you:
| I asked Claude and this is what it says <paste>).
|
| This is as advertiser's wet dream.
|
| Now it's ads at the bottom, but slowly they'll become more part
| of the text. And worst part: you don't know, bar the fact that
| the link has a refer(r)er attached to it.
|
| The internet before and after LLMs is like steel before and after
| the atomic bombs.
|
| Anything after is contaminated.
| Quarrelsome wrote:
| > slowly they'll become more part of the text
|
| Wouldn't that be quite challenging in terms of engineering?
| Given these people have been chasing AGI it would be a
| considerable distraction to pivot into hacking into the guts of
| the output to dynamically push particular product. Furthermore
| it would degrade their product. Furthermore you could likely
| keep prodding the LLM to then diss the product being
| advertised, especially given many products advertised are not
| necessarily the best on the market (which is why the money is
| spent on marketing instead of R&D or process).
|
| Even if you manage to successfully bodge the output, it creates
| the desire for traffic to migrate to less corrupted LLMs.
| barbazoo wrote:
| I'm assuming they have much more control during training and
| at runtime than us with our prompts. They'll bake in whatever
| the person with the checkbook says to.
| Quarrelsome wrote:
| if they want dynamic pricing like adwords then its going to
| be a little challenging. While I appreciate its probably
| viable and they employ very clever people there's nothing
| like doing two things that are basically diametrically
| opposed at the same time. The LLM wants to give you what
| _should_ be the answer, but the winner of the ad word wants
| something else. There's a conflict there that I'd imagine
| might be quite challenging to debug.
| mx20 wrote:
| Generate an Answer, get the winning Ad from an API, let
| another AI rewrite the Answer in a easy that the Answer
| at least be not contradicting to the Ad.
|
| I think someone should create a leaderboard that measures
| how much the AI is lying to us to sell more ads.
| likium wrote:
| Supposedly Google made their own results worse to improve ad
| revenue. And I don't see mass migration over to Kagi or Bing.
| ares623 wrote:
| It was still better than those two. Until chatgpt came out
| and then it was crisis mode.
| the_pwner224 wrote:
| You could run a second lightweight model to inject ads (as
| minor tweaks) into the output of the primary powerful model.
| twapi wrote:
| When search (content discovery) becomes AI-led, we will look back
| and realize that Google Ads were far less personalized and
| targeted than we thought.
| imiric wrote:
| There's no question that "AI" is the next advertising frontier.
| I've been saying this for years[1][2][3]. It is going to be the
| most lucrative form of it yet, and no "AI" company will be able
| to resist it. Given the exorbitant amount of resources required
| for this technology, advertising will probably be the only viable
| business model that can sustain it at scale.
|
| [1]: https://news.ycombinator.com/item?id=35706981
|
| [2]: https://news.ycombinator.com/item?id=36689090
|
| [3]: https://news.ycombinator.com/item?id=46425948
| KellyCriterion wrote:
| "for years"? the oldest link in your list is from lat 2023,
| so.... ;-) ;-)
| kuboble wrote:
| The exorbitant costs could save us from ads actually. instead
| everyone will have to pay subscriptions like for mobile phone
| plans. Haven't heard of the ad-based Rolls-Royce yet.
| Rohansi wrote:
| Paying for a subscription does not guarantee you won't get
| ads. They could do both.
| notepad0x90 wrote:
| I'd pay $0.005 per conversation, provided the payment is not
| inconvenient, anonymous, and an account isn't required. That in
| my opinion is the root cause of the problem, people can't pay
| easily even if they wanted to pay instead of get ads.
|
| I think the next natural evolution after showing ads in chat
| sessions is providing services where LLMs tailor site content to
| include ads in real time. Right now you get served a prepared
| advertisement after the bid is won and the ad for you is
| selected. With LLMs, both the bidding process and the ad served
| would be seamlessly integrated with the site content/context.
|
| Part of the "problem" with ads is people know they're ads. What
| if this comment was edited by HN's servers and rephrased to
| mention a specific product? You might see a sentence about how
| OpenAI is the future, someone else might see how claude or
| anthropic are. Another person might see a paragraph from me about
| how I used Tide to clean laundry this morning with the help of
| AI, telling me the right portions for the right cloth. You might
| suspect it's AI but you won't always be able to tell. Even if
| they made it more obvious like how reddit is doing it, the
| content of the AD itself, pictures, text,etc.. could be crafted
| dynamically so that it embeds in your subconscious without much
| resistance.
|
| The tech developed to make ads more effective is also used to
| influence people for other purposes. The current state of society
| came about after the widespread accessibility of smartphones,
| social media and the rise of surveillance capitalism. Russia's
| influence ops using ads is well documented for example. I
| mentioned all this to say how catastrophic the combination of
| LLMs and advertising could be, even by today's standards.
| rvz wrote:
| AGI can have multiple meanings. Depending on who you ask, it can
| mean:
|
| "Ads Generated Income"
|
| "Artificial General Intelligence"
|
| "A Google Imitator"
|
| "Absolutely Great IPO"
|
| It is any definition that fits the goal of the original secret
| definition of _" 100 Billion dollars in profits"_ from Microsoft
| and OpenAI [0].
|
| [0] https://archive.is/nHedH
| KellyCriterion wrote:
| The thing is:
|
| Global online advertising is around 650-700 billion per year -
| how much of this stake need OAI to capture over how many years to
| fulfill all its datacenter orderings? (a huge chunk of this is
| already caught bei Meta/Google/etc. per year)
| avaer wrote:
| What's the difference between AI ads and computer-assisted
| bribery?
|
| We can wrangle the legalese (as AI companies certainly will) but
| is there any ethical, moral, or practical difference?
| dahart wrote:
| That sounds like the opening line to a joke. What bribe are you
| referring to? Who's getting paid, and what favor is being
| exchanged?
| bearjaws wrote:
| There is something to be said about the state of advertising.
|
| Increasingly it seems you must go to the almighty Google or Meta
| in order to launch any business.
|
| We're looking to expand into a new business line and have out
| grown our pharmacy capacity.
|
| The new business line will cost about $2M in software dev, and
| $3M for the new facility. The advertising budget? $40,000,000
| (annual).
|
| We can build 10 robotic pharmacies (~10 staff per 4000 fills
| daily, each) for the price of just the advertising.
|
| Increasingly we wonder why America doesn't build more and here is
| why. You are going to give all your revenue to two platforms.
| Unless you operate in a business line with 50% margin you are
| screwed.
|
| I don't know what the solution is, but its clear that the
| platforms are figuring out how much margin everyone has and
| slowly eroding it. Somewhere between 8-15% of the cost of all
| products we purchase is advertising spend.
| soared wrote:
| This is kind of broken logic. You're not required to advertise.
| If you want to scale your business into millions in revenue,
| then you'll likely need to advertise. The best ROI is generally
| google/meta, but you have countless other options. You can buy
| ads directly from most websites, it just doesn't scale.
| phyzix5761 wrote:
| The best ROI is google/meta if you're an expert and have
| unlimited time to dedicate to making and running ad
| campaigns. For the rest of us there's much better tools that
| give us better ROI than if we did it on our own.
| bell-cot wrote:
| > You're not required to advertise.
|
| https://en.wikipedia.org/wiki/Arms_race
|
| If you are considering human society as a whole, it is a
| disastrously poor use of resources. But if you are an arms
| merchant (or dominant advertising platform), it is fabulously
| profitable.
| gretch wrote:
| > it is a disastrously poor use of resources
|
| For it to be a poor use of resources, you have to have some
| goal you are optimizing against.
|
| And I think you'll come to find that the assumed goal in
| your head is not one that's widely shared across what
| people in society actually want.
|
| Okay, maybe the digital ad is a waste of resources. But is
| it any more of a waste than the gender reveal confetti that
| it was advertising? How about even the idea of a gender
| reveal party.
|
| What about an enamel pokemon fridge magnet?
|
| After a very low bar (for 2026), human essentials are taken
| care of and people mostly want luxury/leisure consumer
| goods for entertainment.
| saurik wrote:
| Just to verify--as I truly do have a contempt for big tech
| oligopoly that extract rent from everyone to do anything at
| all, but am just unsure this specific problem is a ramification
| of such--are you sure you would not have had a large
| advertising budget pre-Google, or even pre-Internet? You used
| to pay to pay for limited space in newspapers and limited time
| on TV/radio stations, which also had high theoretical per-unit
| margins, or for a massive pile of physical mailers and door
| hangers, along with the cost of the delivery.
|
| To the extent to which our current situation costs more, I'd
| think it might merely be because of increased worldwide
| competition: it used to be that the people trying to advertise
| to any specific random community were also likely local, and
| probably had a legit attempt at a business model... only, now,
| the rise of online companies funded by speculative venture
| capital means that an attempt to advertise a restaurant to
| people who live in a 10 mile radius must compete against a
| company that raised $400m to sell an online engagement platform
| that cares not one iota who uses it as long as the conversion
| cost is cheap, bidding up ads everywhere.
|
| (One place that does seem to me to be uniquely the fault of
| these modern tech companies, though, is that if a newspaper
| published a scam ad, whether or not they had legal culpability,
| I think they and their surrounding community did at least
| strongly feel that they had some level of moral culpability. In
| the current tech environment, people seem to want to believe
| Meta/Google should be allowed to indiscriminately publish ads
| from bad actors, so you now must also compete to bid for
| limited attention with obvious-to-most-but-not-all scams and
| grifts that make money out of nothing but bullshit and are
| thereby willing to again bid up prices anywhere and
| everywhere.)
| gessha wrote:
| "Your margin will soon be my margin."
|
| The solution was/is and most likely will be antitrust but which
| administration will shatter the US tech market we are yet to
| see.
| dexterdog wrote:
| Well, both are 100 pct in the pocket so the only possible
| answer is a third entity which is highly unlikely.
| smt88 wrote:
| Biden appointed Lina Khan. "Both parties are the same" is
| lazy and unhelpful.
| somenameforme wrote:
| It's wiser to judge the parties by actions rather than
| rhetoric. From both parties there has been complete
| absence of meaningful action on the issue, even though
| both have regularly cycled through complete control of
| government with majorities in the house and senate while
| also holding the presidency.
| smt88 wrote:
| Both parties have sued Alphabet and won a major case,
| although the outcome isn't ideal.
|
| Meta and Apple have also been sued by both parties for
| monopolistic behavior.
| somenameforme wrote:
| I don't think it's outright corruption so much as quid quo
| pro. Think about PRISM and other such things. US tech
| companies operate globally, hoover up a vast amount of
| personal information, and pass it all right along to the US
| intelligence agencies.
|
| So the more intrusive and vast these companies become, the
| more the US intelligence apparatus gains from it. Polls
| consistently there's extremely high levels of concern about
| what companies are doing what people's information, and we
| have a million 'real life' privacy laws. The complete
| absence of anything meaningful on the digital front, from
| either party, is highly conspicuous.
| Aurornis wrote:
| What would your hypothetical antitrust solution accomplish in
| this case? Can you be specific?
| tshaddox wrote:
| > I don't know what the solution is
|
| Just spitballing, but how about a total ban on behavioral
| targeting?
| analog31 wrote:
| I'd go further, with a ban on possession of the data, with a
| provision for statutory damages.
| Teever wrote:
| We could just start to enforce the laws as they're written.
|
| If I was to follow a stranger as closely as an entitty like
| Facebook or Google does and compiled a dossier on that
| stranger in many countries that would be considered
| stalking and would be illegal.
|
| Incorporating and doing the same thing to society en masse
| doesn't somehow make it legal despite it somehow makes
| people disinclined to prosecute.
| analog31 wrote:
| I think people are disinclined to prosecute because the
| odds are stacked against them.
|
| I'm thinking of an analogy, and I've mentioned this
| before in other threads. The concept of statutory
| damages, as I'm thinking of it, is that a certain level
| of damages are automatically awarded. For instance this
| is used for figuring out damages when songs are copied
| illegally. It eliminates the need to construct a unique
| legal theory and case for each and every instance. In
| this case it benefits the record companies, which is of
| course controversial, but something like it could also
| benefit consumers.
|
| If a company is found to possess your data, they
| automatically pay you X dollars, enough to make it a
| deterrent. You sign up with a law form that specializes
| in these cases, and they get a share of the damages.
| mwcz wrote:
| An environment like that is where SOLID, or something like
| it, could thrive.
| badcryptobitch wrote:
| You can still derive a lot of info without having
| possession of the data through the use of PETs. There's a
| reason why companies like Google and Tik Tok make heavy use
| of PETs for their advertising products.
| gruez wrote:
| "PETs"?
| tartoran wrote:
| Yeah, I have no idea what this acronym stands for.
| card_zero wrote:
| I found "Privacy Enhancing Technologies".
|
| https://en.wikipedia.org/wiki/Privacy-
| enhancing_technologies
| JamesTRexx wrote:
| So that's how my CAT and DOG aquired their new shiny
| toys. They sold my info.
| usaphp wrote:
| Wouldn't that increase the ad spend? You will need to show
| more ads to find your target audience
| __MatrixMan__ wrote:
| This would predominantly affect businesses where that
| audience is not trying to find that business.
|
| Which sort of businesses are those?
| warkdarrior wrote:
| > This would predominantly affect businesses where that
| audience is not trying to find that business. > > Which
| sort of businesses are those?
|
| Monopolies
| __MatrixMan__ wrote:
| I don't think there's a connection there. If I'm not
| trying to buy a GPU at the moment, the situation re: GPU
| vendors being unable to reach me is unchanged whether
| they are one or many.
|
| I suspect it's gonna be clickbaity stuff, gambling apps,
| distractions and addictions... stuff we can afford to let
| suffer. If you're actually solving a problem that your
| audience has, they'll be trying to find you, you don't
| have to find them. There's a minimum amount of marketing
| necessary to be findable, but beyond that it's at best a
| waste of time and at worst a catalyst for other problems
| that we'd rather avoid.
| cyanydeez wrote:
| Rent seeking is all Capitalism is about.
|
| They call it a moat.
| sooheon wrote:
| This is misuse of language. Rent seeking is anti-competitive
| by definition. The current system, as far as it encourages
| and rewards rent seeking, is anti-capitalist.
| malfist wrote:
| Anticompetitive behavior is completely within lines for
| capitalism. Survival of the fittest and efficient
| marketplace and all that.
|
| Besides, what's the other option, rent seeking is
| socialism? A barter system?
| achierius wrote:
| If monopolies are "non capitalistic", then why has every
| capitalist economy in history had such a tendency towards
| creating large monopolies? The same cab certainly not be
| said any those economies producing, say, worker control of
| the means of production.
| parineum wrote:
| Every economy tends towards monopoly because people like
| power and will corrupt and exploit any system to gain abd
| hold it.
|
| That's a human problem.
| shimman wrote:
| Nice and did humans create these markets or were they
| emitted by the sun?
| cyanydeez wrote:
| Just like communism practice is not communism in theory.
| antisthenes wrote:
| It isn't.
|
| Both perfectly competitive markets and monopolistic markets
| are part of the broad term capitalism.
|
| Capital consolidates over time and seeks to influence
| policy-makers to create anti-competitive regulations.
|
| Every single time.
| nfw2 wrote:
| In order to sell anything, people need to know about it. Google
| and Meta provide a way to make this possible. If they didn't
| exist, you wouldn't somehow have a more affordable way to get
| people to know about your product. However frustrating the
| current situation is, it is still more accessible than needing
| access to the airwaves or print media to try to sell anything
| new.
| beeflet wrote:
| If google and meta didn't exist, it is possible that the
| advertising market could be more competitive, so the amount
| companies would need to spend would be lower.
| Y_Y wrote:
| There are lots of ways to find out about products. We don't
| need Google or Meta to do look at a review site or ask a
| friend or search a directory or to solicit offers.
|
| Adverising isn't there to push ideas into people who didn't
| need to know about it. Many industries would be better off
| without advertising (see e.g. cigarettes) because it ends up
| in an arms race.
| bearjaws wrote:
| That's generally my thought as well, I am not implying you
| don't need to advertise. I just believe the industry has more
| or less reverted to an even worse version of what we had
| before (TV & Radio ads). At least before, there was ~100
| networks you could sell to, now there's basically 10 if you
| include major networks. Of course you don't actually launch
| new products with TV ads, so it is more or less 2 platforms.
| anal_reactor wrote:
| The problem is that most businesses used to be local. This
| naturally limited competition and gave your business a
| chance, even if it sucked. Nowadays the competition is
| global.
| warkdarrior wrote:
| This is good for consumers.
| parineum wrote:
| People don't really care to address that most of the mom
| and pop businesses that went out of business because
| Walmart/Amazon weren't offering better products or
| services. They got their products through the same retail
| suppliers, just at higher costs and the variety of
| choices was much lower. They also had much less generous
| return policies.
|
| There's a personal touch that people opine for but I
| think that's rose colored glasses. I remember some local
| retailers where I liked the owners but more often they
| weren't anything special and sometimes they were
| downright unpleasant.
|
| The thing I like about Amazon is that I can get my
| shopping done quickly at home then I can go socialize
| with people I choose to.
|
| This is just an example if retail but I think it applies
| to most industries that people think have been decimated
| by big companies displacing local companies. The whole
| attitude reminds me a lot of the whole "Make America
| Great Again" idea. Opininig for a past that never really
| existed.
| yfw wrote:
| The thing about mom and pop is there was competition.
| With amazon enshittifying you have no options.
| Eisenstein wrote:
| > People don't really care to address that most of the
| mom and pop businesses that went out of business because
| Walmart/Amazon weren't offering better products or
| services.
|
| In a local mom and pop store, the mom and pop owned the
| store and were invested in the community, Their money was
| spent back in the same place it came from. They had a
| personal stake in their reputation and knew the
| customers, and the customers knew them. This is how a
| community operates. You are thinking about it as a dry
| 'products and services' offering, when it is much more
| than that. You don't live to buy products and services,
| you live to do other things, and a community fosters that
| part of your life. The 'spending money to get things you
| need or want' part is to facilitate the rest of your
| life, not the other way around.
|
| > They also had much less generous return policies.
|
| Why is this an issue? People who consistently rely on
| generous return policies are either buying shoddy goods
| or abusing it at the cost of everyone else. Figure out
| what you want before you buy it and then it won't be a
| problem.
| nfw2 wrote:
| So another platform disrupting the duopoly would be good,
| no?
| anyonecancode wrote:
| > In order to sell anything, people need to know about it.
| Google and Meta provide a way to make this possible. If they
| didn't exist, you wouldn't somehow have a more affordable way
| to get people to know about your product. However frustrating
| the current situation is, it is still more accessible than
| needing access to the airwaves or print media to try to sell
| anything new.
|
| The places people can find out about your product are
| controlled by a very small number of companies. And those
| companies not only own those spaces, they also own the means
| of advertising on those spaces. So if you have a product you
| want to advertise, you're not paying to distribute your
| message broadly to consumers, you're paying a toll to a
| gatekeeper that stands between you and your potential
| customers.
| 3rodents wrote:
| but that's not really true. You're not paying, you're
| bidding. You are competing against thousands of other
| advertisers for eyeballs. If you are the only advertiser
| targeting a group of people, you will spend almost nothing
| to advertise. If you are targeting a group of people that
| everyone targets (e.g: rich people in their 30s) you will
| pay through the nose.
|
| Facebook, Google etc. are the most "fair" forms of
| advertising. We can dislike advertising, their influence,
| product etc. but when you compare them to almost every
| other type of advertising, they're the best for
| advertisers.
|
| The reason they generate so much revenue is because they
| are so accessible and because they are so easy to account
| for. The reason LTV and CAC are so widely understood by
| businesses today is because of what Google, Facebook etc.
| offer.
| 93po wrote:
| Google has famously and repeatedly rigged this bidding
| system in anti-competitive ways and has had to pay
| billions in fines because of it (which I am sure were
| less than the amount they profited from)
| pclmulqdq wrote:
| No financial market would be able to run the way Google
| and Facebook run their ad markets. They are the supplier,
| the exchange, and the broker all at the same time. This
| is not a competitive market. It's a captured one where
| the supplier effectively gets to set their price, and the
| exchange and the broker incentivize and advise you to
| trade at that price.
| johnnienaked wrote:
| There is no competition in the ad space, so those companies
| can continue to just parasite their way to record earnings by
| stealing every other businesses profits. They create almost
| nothing of actual value, they are just heads of an ecosystem
| they totally control. Parasitism as a business model.
| notarobot123 wrote:
| Doesn't this point more to a saturated market and the need to
| manufacture demand to keep growing?
| littlestymaar wrote:
| Advertising is a tax that goes to an oligopolistic cartel.
| parineum wrote:
| I've never gotten $2 for $1 of tax I paid. At best I'm
| getting $1 of services back, usually much less.
| littlestymaar wrote:
| What "service" do you think you get from the ads you pay
| for?
| doctorpangloss wrote:
| Meta, TikTok and social media create the cultural celebration
| of thinness that makes it possible for you to sell 25mg
| semaglutide tablets to everyone. In my opinion, they deserve
| more than 50% of your margin: you didn't invent the drug, the
| FDA is basically letting you break the exclusivity policy for
| no particularly good reason, and you didn't create the
| audience.
| crawshaw wrote:
| That is very good framing for the problem with advertising
| today.
|
| It also says that if you can find an audience to build a new ad
| platform, the incumbents have created enormous margin for the
| new platform.
| Aurornis wrote:
| > The new business line will cost about $2M in software dev,
| and $3M for the new facility. The advertising budget?
| $40,000,000 (annual).
|
| The reason the advertising budget is such a high number and a
| recurring charge is that effective advertising returns an ROI
| on each dollar spent.
|
| If the software budget was increased 10X to $20 million, would
| the company get 10X as many customers? No.
|
| What about the facility? If you 10X the facility budget to $30
| million would you get 10X as many customers? No.
|
| However, advertising is a customer acquisition activity. Every
| dollar you spend on advertising provides additional customers.
| This is saturable, but the ceiling is very high. Much higher
| than spending on software or facilities.
|
| The reason your ad budget isn't so high isn't because Google
| and Meta invented the discoverability and distribution problems
| or basic economics. It's because it has been determined that
| acquiring new customers via advertising has a high ROI and
| therefore it's a smart move to pour as much money as possible
| into customer acquisition.
|
| If every $1 you spend on advertising produces $2 in customer
| LTV then your company should be maximizing ad spend until
| evidence of saturation starts appearing.
|
| This commonly frustrates engineers who think it's a wasted
| investment. The question is: Compared to what? If you could
| have the same number of customers and same amount of revenue
| without advertising then you should do that! However, you
| can't. This isn't a licensing fee that's being paid. It's
| putting money into a machine that returns more dollars back
| than you put into it.
| hansvm wrote:
| That misses the point though. Google and Meta have designed
| systems which capture nearly the entire surplus. In a non-
| monopolistic environment you'd expect somebody to be willing
| to step in at a bit less than Google's rates and offer the
| same outcomes.
| Aurornis wrote:
| The parent comment did a sneaky thing and gave the
| advertising budget then pivoted into rants about Google and
| Meta. They never actually said "All of this money goes to
| Google and Meta". It was just expected that on HN everyone
| would assume as much because that's what everyone is
| familiar with.
|
| In the pharmaceutical industry, I can guarantee their
| advertising funnel is much wider than two social media
| platforms. Think about all the places you see
| pharmaceutical ads: TV, billboards, even ads on buses, that
| sketchy doctor's office full of company swag. That $40
| million is not going all to Google and Meta even if the GP
| comment tried to imply it was.
| oblio wrote:
| What's the spending distribution for pharma ads?
| Hypothetically, if $35 million out of $40 goes to Google
| and Meta, OP is still right.
| mschuster91 wrote:
| > In the pharmaceutical industry, I can guarantee their
| advertising funnel is much wider than two social media
| platforms. Think about all the places you see
| pharmaceutical ads: TV, billboards, even ads on buses,
| that sketchy doctor's office full of company swag. That
| $40 million is not going all to Google and Meta even if
| the GP comment tried to imply it was.
|
| Having worked adjacent to ads... yes, there is more than
| social media ads. But the amount of everything _not_
| social media has massively shrunk!
|
| Local newspapers are effectively dead except for local
| businesses (and even these are reducing their spend -
| especially the food delivery services fully rely on Uber,
| Just Eat etc) and so is radio, and even TV has been hit
| hard. You got newspapers and broadcast stations getting
| hit left and right, sliding into bankruptcy and/or being
| bought up by larger companies for pennies on the dollar.
| The fact that all across the Western world
| government/citizen funded public broadcasts are under
| attack makes it even worse, the diversity of media and,
| most importantly, the amount of people holding government
| accountable is collapsing as we speak [1].
|
| Globally, Google, Amazon and Meta suck up over half of
| the _global_ ad spend and it 's not going to look better
| [2].
|
| [1] https://lizfarmer.substack.com/p/how-the-decline-of-
| local-ne...
|
| [2] https://www.marketingdive.com/news/global-ad-spend-
| rise-fast...
| johnnienaked wrote:
| They have all the control and no competition. The time for
| breaking these companies up or hamstringing them at least a
| little bit is many years past due.
|
| The problem is that monopolies are extremely profitable and
| are as "American as apple pie," despite the prevailing
| healthy competition myth that goes alongside it.
| _factor wrote:
| I doubt the ROI would be so high if organic results stood any
| chance.
|
| The ROI on bribes is very high too, but we haven't legalized
| those (officially).
| Aurornis wrote:
| > I doubt the ROI would be so high if organic results stood
| any chance.
|
| This is just the same fallacy. In what world are people
| going to organically share ads for this company on their
| Facebook feeds? Who is going to Google the company name
| before they know about it?
|
| Every business needs to proactively acquire customers.
|
| Distribution and CAC are top of mind values for any growth
| business. It has been this way long before Google and Meta
| existed. Digital advertising actually makes it cheaper and
| easier than ever to acquire customers at scale.
| dwaltrip wrote:
| Information can travel without people paying for it do
| so.
|
| Ban most ads and everything will still work fine.
| mjevans wrote:
| I would prefer a world that returned to the older '30
| second blip (for the only) sponsor of the program' ad,
| which also seemed to be of the limited form: Here's
| Product X, it does Y, which makes your life better
| because Z. Informative, dry, stated by an announcer in a
| calm and not demanding way.
| gruez wrote:
| Sounds like ads will just get replaced with covert word
| of mouth enticements. Want to get people to know about
| your product? Send free samples to influencers. Maybe
| even fly them out to CES and put them in nice hotels so
| they can experience your product announcements/demos. All
| of this is "unpaid", of course.
| fenwick67 wrote:
| this already happens
| fweimer wrote:
| A lot of people enter the company or product name into
| the browser's search field and reach their intended
| target through an ad at the top of the results. If they
| proceed to purchase something, does this count as a
| conversion? I think it does. Unlike traditional
| advertising, this didn't influence the customer's
| decision to buy at all.
| Aurornis wrote:
| > A lot of people enter the company or product name into
| the browser's search field
|
| They had to already know the company name or product name
| to get there.
|
| This doesn't just _happen_. Spreading the name of the
| product and getting it to stick in people's minds takes a
| lot of advertising budget, on the whole.
| fweimer wrote:
| I'm concerned that companies spend their advertising
| budget on these redirects because those have the best
| metrics, instead of actually making the brand and its
| products more known.
| djhn wrote:
| CAC-LTV by itself is not a great long term strategy. But
| it can appear like one in the short term to investors.
|
| So there is a plethora of companies happily dumping
| investor money into paid customer acquisition.
|
| Blue Apron was a classic example of borderline fraudulent
| growth metrics and a cash grab IPO before the customer
| acquisition funnel collapsed.
| techpression wrote:
| This is very correct, the only thing I as an engineer care
| about is that we rigorously optimize our spend to get the
| best possible CAC (Customer Acquisition Cost) It's an
| incredibly hard problem and has many variables, that's why
| the platforms charge what they do, they allow you to work
| with these variables in a somewhat approachable way.
| pepinator wrote:
| it surprises me how many people simply don't get the point.
| they say "they make more money this way, so it's ok". no big
| picture at all.
| Aurornis wrote:
| What big picture? Can you elaborate, or just snide drive-by
| criticisms?
|
| I mean I understand that a lot of people in this comment
| section wish ads didn't exist and that everyone just
| automatically knew about relevant products and services
| without ads, but it all reads like utopian fantasy stuff.
| johnnienaked wrote:
| Do you genuinely believe the economy didn't function
| prior to the invention of the advertisement?
| eudamoniac wrote:
| Possibly? There have been advertisements for at least
| 2500 years. It's very likely that as long as there has
| been an economy as such, there have been business owners
| promoting themselves.
| nindalf wrote:
| Yeah they probably had fewer advertisements back in the
| good old days, but they also had a much smaller economy,
| producing a whole lot less than we produce today. [1]
|
| And you might not like everything about the world today,
| but living in a vibrant economy where people create
| wealth by building new businesses has led to more
| comfortable lives for the large majority of humanity.
|
| [1] - https://ourworldindata.org/grapher/global-gdp-over-
| the-long-...
| WheatMillington wrote:
| I had this exact epiphany when I ran a side business selling
| niche widgets. Every dollar I spent on Facebook ads returned
| me $5 in revenue (at 40% margin) and it wasn't obvious how
| much I could spend before that stopped being true.
| csense wrote:
| Advertising spend being too high is a symptom of a supply glut.
| Too many products in the marketplace, not enough consumers to
| buy them.
|
| In a different world where there are higher wages, more people
| would have more spending power. Then companies wouldn't have to
| spend as many dollars on advertising, which they could split
| between higher wages, higher margins and lower prices.
|
| Alas, the short-term single-firm directional incentive for
| company decision makers in that world leads to marginal
| prioritization of higher margins. The loss of wages leads to
| loss of consumer spending power but it's spread across the
| economy. But every firm has the same incentive so they all do
| the same thing, and the good thing gets ruined.
|
| This line of thinking leads to a Georgist-ish conclusion: The
| class conflict _shouldn 't_ be between workers and employers.
| They should be allies; the real cause of nobody being able to
| afford anything is rent extractors. (Writing in the 1800's,
| George [1] was most concerned about land rents; but the
| advertising monopoly of Google / Meta may be another form of
| extractive rent with similar characteristics.)
|
| Maybe Henry Ford was on to something when he shocked the world
| by paying his employees enough to afford the product they were
| making (more than doubling many workers' wages)...
|
| [1] https://www.astralcodexten.com/p/your-book-review-
| progress-a...
| metabagel wrote:
| Stronger unions would help bring wages up.
| awakeasleep wrote:
| I dont think you have to go georgist for that take, adam
| smith's whole "free market" originally meant "free from
| economic rent"
| achierius wrote:
| > The class conflict shouldn't be between workers and
| employers.
|
| Then why don't employers, the ones with essentially all the
| power here, tend to choose actions that go against the
| interests of the working class? Simple: regardless of what
| you think "should" happen, a study of history tells us what
| actually tends to happen in reality, and that tendency is
| towards class war between the ruling and exploited classes.
|
| Anyways, in what way is "ownership" not rent-extracting in
| general? If you own shares of a stock and you get paid a
| dividend, that is rent plain and simple. All the arguments
| you can make against that being the case -- eg that you
| deserve a premium for parking your capital in a risky asset
| -- apply to advertising conglomerates and even literally
| renting out land too, so either they're all renting or none
| are.
| servercobra wrote:
| Because employers don't tend to make choices about the
| "interests of the working class", they make choices about
| what benefits them specifically in the moment or near
| future. You need to get some sort of alignment on their
| interests and the interests of the working class to create
| change, whether that's via government intervention or
| otherwise.
|
| And I hear you on ownership. It's "just" figuring out how
| to make that change.
| gruez wrote:
| >... so either they're all renting or none are.
|
| The article in the parent comment specifically spells out
| why renting out land is different than say, "renting" out a
| car factory (or any other productive asset).
| Herring wrote:
| _> In a different world where there are higher wages, more
| people would have more spending power. Then companies wouldn
| 't have to spend as many dollars on advertising, which they
| could split between higher wages, higher margins and lower
| prices._
|
| Interesting hypothesis. I looked it up in Wilkinson and
| Pickett, The Spirit Level.
|
| The authors provide cross-sectional data across 23 rich
| nations, showing a strong positive correlation (r~=0.70)
| between income inequality (Gini coefficient) and advertising
| expenditure as a percentage of GDP.
|
| They attribute it to increased status competition & anxiety
| in more unequal societies, leading to pressure to consume
| more.
| gruez wrote:
| >The authors provide cross-sectional data across 23 rich
| nations, showing a strong positive correlation (r~=0.70)
| between income inequality (Gini coefficient) and
| advertising expenditure as a percentage of GDP.
|
| Why only rich nations? Many of the most unequal countries
| are also poor (or at least, not rich), so why do they get a
| pass?
|
| https://en.wikipedia.org/wiki/File:Gini_Coefficient_of_Weal
| t...
|
| https://en.wikipedia.org/wiki/File:World_Bank_Inequality_20
| 2...
| Herring wrote:
| Take a few quantitative courses (ie statistics). Roughly
| speaking, you usually want to compare similar-ish groups.
| It's like if you want to examine the effects of diet on a
| human body, you can't just mix old and young haphazardly.
| Advertising spend in Somalia probably works very
| different than advertising spend in Norway.
| servercobra wrote:
| I'm not familiar with Georgism, but employers and rent
| extractors (e.g. the majority stock owners) seem to be one
| and the same pretty often, at least in the US.
| gruez wrote:
| >Maybe Henry Ford was on to something when he shocked the
| world by paying his employees enough to afford the product
| they were making (more than doubling many workers' wages)...
|
| That's a nice story to tell, but the economics never works
| out if you do the math. Whatever extra wages you pay, you
| only get a fraction of that back in increased sales. How much
| percent of a worker's income do you think is spent on a car?
| As a rough measure we can use the BLS's CPI weights for "new
| and used vehicles", which comes in at 7.4%, with an extra
| 1.4% if you include maintenance and parts. By that alone
| "paying his employees enough to afford the product they were
| making" is going to be a losing proposition, because Ford can
| only hope to get 8.8% of whatever they paid in wages back as
| revenue. And all of this is ignoring the fact that you can't
| pay extra wages out of revenue, only profit, so you can only
| hope to recoup a fraction of that 8.8%.
| sdenton4 wrote:
| It's a collective action problem. If everyone pays higher
| wages, there's a greater supply of money for buying stuff /
| solving problems (assuming the higher wages aren't eaten by
| rents). No individual form recoups all of the higher wages
| they pay their workers, obviously, but there's a larger
| market for the goods of everyone has more money.
| gruez wrote:
| >If everyone pays higher wages, there's a greater supply
| of money for buying stuff / solving problems (assuming
| the higher wages aren't eaten by rents). No individual
| form recoups all of the higher wages they pay their
| workers, obviously, but there's a larger market for the
| goods of everyone has more money.
|
| Does this actually work? Suppose you're on an island
| where the economy only produces coconuts. How does giving
| workers more coconuts make the economy grow, such that
| there's more coconuts to go around overall? Unless the
| workers were absolutely famished, giving them more
| coconuts isn't going to increase productivity. You might
| argue this model isn't representative of the real world,
| but that's approximately how the economy works. It can
| produce a certain amount of "stuff" (ie. coconuts), of
| which some portion can be given to workers, and the
| remainder can be given to the
| kings/elites/capitalists/whatever. Unless you improve
| productivity, there isn't going to be magically more
| stuff to go around.
|
| Giving each worker a car can plausibly increase their
| productivity (less time spent commuting?) but the effect
| is small, and unlikely to be recouped by car companies.
| The situation looks even worse in the current economy. If
| everyone's paychecks were 10% bigger, what marginal item
| do you think it'll be spent on? A bigger car? A new
| iPhone or big screen TV? How would any of those increase
| productivity?
| sdenton4 wrote:
| This is how we had a major boom in middle-class wealth
| int he US post WW2.
|
| If you are only selling coconuts, a single raw material,
| yes, you will run into supply constraints such that
| prices go up. But that isn't how economics works. Your
| zero-sum economics example is only applicable in short-
| term scenarios: over the longer term, new industries
| develop to solve persistent problems that people are
| willing to pay to solve.
|
| Money solves the problems of the people that have the
| problems. If the problem is 'we need to eat', producers
| will diversify into new food sources to meet the demand,
| solving the problem, and capturing the money of the
| people who have that problem.
|
| There is an enormous space of problems people have which
| cannot be solved due to lack of access to money.
| Increasing costs in childcare, elder care, and education
| are good examples.
| gruez wrote:
| >This is how we had a major boom in middle-class wealth
| int he US post WW2.
|
| The fact that Europe got bombed no doubt helped too, same
| with the elites being concerned that communism was on the
| rise and giving workers a better deal in an effort to
| stave that off.
|
| >Your zero-sum economics example is only applicable in
| short-term scenarios: over the longer term, new
| industries develop to solve persistent problems that
| people are willing to pay to solve.
|
| >Money solves the problems of the people that have the
| problems. If the problem is 'we need to eat', producers
| will diversify into new food sources to meet the demand,
| solving the problem, and capturing the money of the
| people who have that problem.
|
| I'm not how you got the impression that I thought the
| economy had to be zero sum. I even specifically mentioned
| the possibility of more stuff to go around if
| productivity goes up. That's the problem with your "new
| industries develop" argument. Unless productivity goes up
| too, there will only be different stuff, not more stuff
| overall.
|
| >There is an enormous space of problems people have which
| cannot be solved due to lack of access to money.
| Increasing costs in childcare, elder care, and education
| are good examples.
|
| All of those are service industries that are resistant to
| scaling, and as a result productivity growth have been
| abysmal. Giving people more money to spend on those
| things just means productive capacity is removed from the
| economy elsewhere. Going back to the coconut economy
| example, it would certainly be nice if workers could have
| a maid to do the cleaning or a chef to do the cooking,
| but you still need people do the cleaning or cooking. At
| the end of the day you're just shuffling people around,
| not growing more coconuts.
| tjr wrote:
| If the economy is 100% coconuts -- all supply is
| coconuts, all demand is coconuts -- then coconuts are
| all. Business owners sell coconuts in exchange for
| coconuts in order to acquire more coconuts. Employees are
| paid in coconuts which they trade for more coconuts.
| Paying workers more coconuts gives them more of what they
| want, which is coconuts, that they turn around and spend
| on coconuts.
| gruez wrote:
| That's exactly the problem. At the end of the day, unless
| you increase production of "stuff" (or coconuts), there
| isn't going to be magically more "stuff" (or coconuts) to
| go around just because people are shuffling "stuff" (or
| coconuts) around.
| uoaei wrote:
| I don't understand what compels you to continue down this
| line of thought when its obvious flaws have been so
| clearly elaborated by other commenters.
| roughly wrote:
| > Suppose you're on an island where the economy only
| produces coconuts.
|
| This is why nobody takes economists seriously. What you
| lose in simplifying down to this model is literally
| everything. The coconut economy has zero predictive
| power.
|
| In the real world, distribution effects dramatically
| affect the functioning of the economy, because workers
| are also consumers and owners of capital are siphoning
| off the purchasing power of their customers. Productivity
| isn't the question in the modern economy - we're already
| massively overproducing just about everything - our
| problem is both our wealth and production allocations are
| borderline suicidal.
| gruez wrote:
| >This is why nobody takes economists seriously. What you
| lose in simplifying down to this model is literally
| everything. The coconut economy has zero predictive
| power.
|
| A simplified model is needed otherwise rigorous analysis
| becomes impossible, and people make handwavy arguments
| about how paying workers more means they can spend more,
| which means factories, and it's a perpetual growth
| machine!
|
| >we're already massively overproducing just about
| everything
|
| No we're not. If we weren't, we shouldn't have seen the
| massive inflation near the end of covid. The supply
| disruptions hit almost immediately, but it wasn't until
| the stimmy checks hit that inflation went up.
|
| >our problem is both our wealth and production
| allocations are borderline suicidal.
|
| If you read my previous comments more carefully, you'd
| note that I'm not arguing against better wages for
| workers as a whole, only that contrary to what some
| people claim, they don't pay for themselves.
| roughly wrote:
| > A simplified model is needed otherwise rigorous
| analysis becomes impossible
|
| If your tools aren't capable of rigorous analysis of a
| model that retains enough detail to capture the salient
| features of the thing they're trying to model, they're
| not the tools for the job.
| gruez wrote:
| What's the "salient feature" that's missing? From all the
| other replies it sounds like people are still relying on
| the handwavy argument that "pay workers more -> workers
| spend more -> you can pay workers more -> repeat", but
| can't articulate where the actual growth is coming from.
| If this is true, the communism would have beaten
| capitalism, because they would be able to exploit this
| better than any capitalist system, but obviously that
| didn't happen.
|
| Overall this feels like troll physics[1]. Yes, the idea
| that having a magnet pull you forward, which itself is
| pushed forward by you moving forward sounds superficially
| plausible as well, but it doesn't pencil out in reality.
| The only difference is that "the economy" is complex
| enough it's non-trivial to disprove, and people can
| handwave away any objections.
|
| [1] https://knowyourmeme.com/photos/74256-troll-science-
| troll-ph...
| roughly wrote:
| > What's the "salient feature" that's missing?
|
| As it sits, all of the members of your coconut economy
| are going to be dead of malnutrition or exposure in
| relatively short order, so maybe address that and then we
| can work our way up to the flaws in the economic theory
| that drove the greatest wealth expansion and boom in
| consumer spending the world has ever seen.
| bentcorner wrote:
| > A simplified model is needed otherwise rigorous
| analysis becomes impossible, and people make handwavy
| arguments about how paying workers more means they can
| spend more, which means factories, and it's a perpetual
| growth machine!
|
| I'm no economist but you can't live on an island that
| only produces coconuts, because the people on that island
| would quickly start producing other stuff, breaking your
| premise.
|
| This is like saying cash is useless because amoeba
| haven't evolved a cash economy.
| pphysch wrote:
| The microeconomics of that decision are poor for the
| company, but the macroeconomics are great. But the macro
| angle has been reduced to "Fed interest rate" in America.
| RugnirViking wrote:
| thats an overly simplistic way to look at it. Of course you
| can never get more money from your employees' purchases
| than you give them, that makes no sense. The point is using
| your market power as a large employer to raise market
| salaries. People will not want to work for your competitors
| or other sectors if they pay half what you do. So when you
| rise, naturally other salaries will rise too. And those
| other workers will also be buying cars.
|
| Whether that makes sense economically is a difficult
| problem to quantify, especially over any fixed timeframe. I
| would guess not, at least if your brand isnt insanely
| strong (on the level of half or more people with enough
| money would buy it)
| Retric wrote:
| Your logic is flawed. 8.8% of total wages vs 0% of some
| lesser number isn't 8.8% of the difference.
|
| If hypothetically you are paying 99x a year and bumping
| that to 100x means someone buys an 8.8x product that could
| be a win.
| gruez wrote:
| >If hypothetically you are paying 99x a year and bumping
| that to 100x means someone buys an 8.8x product that
| could be a win.
|
| What type of company would this work for? Cars are so
| ingrained in our society that it's doubtful the marginal
| Ford (or Tesla) factory worker is going to be buying a
| $50k car just because they paid better wages.
| Retric wrote:
| A luxury car manufacturer could tip the scale of someone
| buying their product vs someone else's product via an
| arbitrarily small wage increase.
|
| The degree to which this is generalizable is of course a
| different story, but it's at least theoretically possible
| for a small wage bump to be a net gain for the company.
| fooker wrote:
| > the economics never works out if you do the math
|
| The economics work out pretty well if you are the only game
| in town where your employees can purchase what you have
| marketed to be the next big thing and status symbol that
| everyone must have.
| nkrisc wrote:
| Ok, so if he still makes a profit, so what? There are
| numerous other advantages to a happy and well-compensated
| workforce, even completely ignoring the societal benefits
| beyond just the company.
| mschuster91 wrote:
| The idea is to use that as a marketing ploy on all sides.
|
| On one side, paying high wages is marketing on the
| employment market - enticing people to work at Ford's
| rather than somewhere else.
|
| Then, you got the government side. A factory providing a
| town with a lot of high quality employment leads to a lot
| of purchasing power from the employees and thus to a
| growing city. Wolfsburg in Germany, the best example,
| literally _was founded_ by /for Volkswagen. Being respected
| by local politics for that growth, in turn, leads
| politicians and city management to... be lenient in
| enforcing regulations impeding the business. The best
| example here is Tesla in Brandenburg near Berlin. With any
| other company in any other place in Germany, they would get
| _hammered_ with fines. Tesla in turn set up shop in a
| destitute area, so politicians bent over backwards and
| looked aside despite numerous violations and
| transgressions.
|
| And finally, you got the customer side. The story of a
| quality product, made by well-paid domestic workers, was as
| powerful a story as it still is today, at least in affluent
| circles.
| johnnienaked wrote:
| I don't think that's how it works. These companies have all
| the visibility control and make you invisible by default
| unless you pay them. It has very little to do with quality,
| demand, or any of the rest.
| AznHisoka wrote:
| " Increasingly we wonder why America doesn't build more and
| here is why."
|
| Building another advertising network isnt like building a
| factory or a bridge. Its not something money can magically make
| appear.
|
| You need to build something that is either very very addicting
| to use or an universally useful online product like ChatGPT or
| a new search engine.
|
| If it was that easy, capitalists would be building another new
| advertising network in droves
| johnnienaked wrote:
| The solution is to prevent the privatization and wealth
| accumulation that flows from control of infrastructural
| technology platforms. Netscape, google, computer os, machine
| learning were all public or university research projects until
| the first movers (andreeson, brin/page, Ellison, gates) stole
| them, gatekept and IPed them, and then exploited wide user base
| to accumulate absurd amounts of wealth for just themselves.
| These people either didn't create anything at all or made very
| slight variations before deploying them. They were smart in
| seeing the trends before they happened, but should they really
| be entitled to 50% of a countries wealth just because they were
| lucky enough to be first? Especially now that we see how they
| behave once they get that control?
|
| There is no reason at all why the US govt. can't control this
| better, they just refuse to do so.
| mupuff1234 wrote:
| Is your product offering anything unique to the consumer other
| than blasting them with more ads than the competition?
| dbacar wrote:
| The ads stirs the already murky waters of trust for the answers
| you get.
| jadenpeterson wrote:
| I can't be the only person completely unconcerned about this
| state of affairs. They're ads. This is the most straightforward
| incentive structure in the world - they are paid to supply ads on
| behalf of other companies, and we consume those ads and are, in
| turn, provided with their product. I don't know why it is, but
| people are incapable of evaluating this exchange objectively -
| there's something inherently detestable about advertisement to
| the human mind. This is a perfectly reasonable exchange.
|
| Besides, if it wasn't for ads, I never would've found out about
| Zyns, and now I can't stop buying them.
| herpdyderp wrote:
| Ads feel good when they're for something we're actively in need
| of. But they usually aren't, and they are also often scammy or
| scummy. I bet we'd feel a lot different about ads if these
| things changed.
| hasbot wrote:
| Is this an ad for Zyns (whatever that is; I refuse to do a web
| search to find out)?
| jadenpeterson wrote:
| No LOL. Zyns are nicotine pouches you insert into your gums
| for a gradual release of nicotine. They're powerful.
| Unfortunately, I went from using 3mg Zyns to 6mg Zyns, and
| had to sit in front of my bathroom sink, fighting the urge to
| retch. Be careful with them, but they're a good way to ramp
| up to cigarette smoking
| zkmon wrote:
| When users come to you, they may or may not shell out money for
| your products, but they are forced to give out something valuable
| to you. That is their attention which you can sell. The value of
| attention of the crowd could be so big for some companies to give
| away their products free.
| clcaev wrote:
| Pharma ads as AI health advice will be super profitable. AIs are
| very engaging and able convince people they have a disease,
| inadvertently coach them on how to mislead their doctor, and how
| to fast track diagnosis supporting their specific meds. The only
| guard is to have detailed manifest of exactly what was used in
| training. Even that may prove insufficient as "final assembly"
| has emergent properties. For example, omitting case reports of
| severe outcomes for a given formulation. Bias can be constructed.
| iugtmkbdfil834 wrote:
| I am going to offer an unpopular opinion. This is not a bad
| thing.
|
| Even now there are viable options for a person to pick up a
| dedicated ( and reasonably powerful ) local inference machine,
| where time from setup to working is than few hours ( more if you
| don't want to use Windows.. which is fair ).
|
| Separately, about the chat sessions. For once, those ads could be
| more relevant than repeat toaster ads immediately after me buying
| a toaster. But if one is worried about profiling ( and
| advertising ), one should not using a commercial solution anyway.
| Personally, I am taking a.. calculated risk.
|
| There is a concern that openai will follow the same path as
| google, but they can't ( at least for now ) really afford to make
| chatgpt not useful as this is their only viable product.
|
| I will end with a more optimistic note. This is HN. There are
| people here, who are likely working on something that does not
| depend on openai or any of the big providers anyway. It is going
| to be ok. And if it won't be. Make it so. After all, this is
| supposed to be your realm. Own it.
| lo_zamoyski wrote:
| "it seems that the pinnacle of human intelligence: the greatest,
| smartest, brightest minds have all come together to... build us
| another ad engine"
|
| Putting aside the ridiculous hyperbole, the reason is that
| consumerism is our culture. Our cult-ure. Everything is oriented
| toward and reduced to consumption. Our worth as human beings is
| replaced by consumerist criteria and measures. It's why
| physicists leave research and work in finance where their
| training is repurposed in service of all sorts of financial
| jiggery-pokery.
|
| "The A in AGI stands for Ads! It's all ads!! Ads that you can't
| even block because they are BAKED into the streamed probabilistic
| word selector purposefully skewed to output the highest bidder's
| marketing copy."
|
| But note the implication. Sure, ads weaved into the content, but
| they still must be targeted. And here's the irony of the online
| existence. People often refrain from expressing various desires
| in public for fear of judgement. It's why the vitriol online is
| so much spicier. The world of social media where you can express
| repressed opinions, the world of games and other _ahem_ media
| where you can sublimate all sorts of desires and fantasies - all
| of this is data for the AI machine. These companies, in some
| respects, "know" you better than the people in your life do -
| especially those parts of you that you could be embarrassed to
| reveal in public - and they use this information to manipulate
| you, largely for profit, but why not for broader social and
| psychological control. AI's convenience is already irresistible.
| It's the go-to in Google search.
| toddmorey wrote:
| OpenAI is here because Sam Altman is NOT a product guy. He craves
| Apple style consumer success, but he's terrible at productizing
| his technology. Remember the marketplace of custom GPTs? Hell
| even the name ChatGPT. Anthropic had to show them how to build
| useful workflows for developers using AI. Meanwhile, OpenAI
| delivered... Sora.
|
| To actually quote Sam Altman: "I think of ads as a last resort
| for a business model."
|
| It's just maddening to me because this technology could be so
| much more useful for purposes way beyond advertising.
| mrweasel wrote:
| Never thought of ChatGPT as being just one of the GPTs that
| could exist, but it make a lot of sense. In a world where
| OpenAI where better managed, more focused on actually
| delivering actual value, ChatGPT would be the show case AI
| product, while the value is generated by the custom solutions
| delivered to other companies to embed in their products.
| sumedh wrote:
| > It's just maddening to me because this technology could be so
| much more useful for purposes way beyond advertising.
|
| AI is a perfect technology for Ads though. Instead of me
| wasting time reviewing multiple products for my use case,
| ChatGpt will just give me top 3 recommendations with the pros
| and cons and then buy it for me.
| lkey wrote:
| The one thing it will never recommend is _no product at all_.
|
| You've ceded even the glimmers of discernment that remain in
| you and all I feel is pity. It is not a 'waste of time' to
| interrogate your own desires.
|
| There's no such thing as a 'top 3' for all things under
| heaven. You cannot purchase yourself a solution to every 'use
| case'. Furthermore, even if there were such a ranking, the ad
| machine would not reveal it to you, as you are not the
| customer, you are the mark.
|
| You don't even want to be bothered to hit the 'buy it now'
| button. This is the mental model of an immaculate rube. You
| deserve better.
| array_key_first wrote:
| But this loses value as soon as ads come into play because of
| incentives. It's hard to trust recommendations when ads are
| in the mix.
| miltonlost wrote:
| > It's just maddening to me because this technology could be so
| much more useful for purposes way beyond advertising.
|
| Can it tho? The problem with LLMs right now is that they don't
| have much useful purposes beyond spam, slop, hallucinated
| searches, and advertisements. The lack of a product is why
| there isn't a profit to be made in them
| simianwords wrote:
| "OpenAI is here because Sam Altman is NOT a product guy. He
| craves Apple style consumer success, but he's terrible at
| productizing his technology"
|
| Seriously, consider putting more thought and effort into your
| comments. This is wildly out of touch and I think it is because
| people lack the creativity to imagine the counterfactual - some
| one else running OpenAI.
|
| OpenAI is remarkably well run - it is a fairly good product.
| The best model so far, the best experience, the 2nd best coding
| experience.
| rimbo789 wrote:
| We need to massive restrict when and where ads can be shown in
| all aspects of our society. No ads in ai at all. Ever. No
| targeted ads, no unskipable ads, limit ratio of ads to content in
| video, no roadside billboards, reign in the size of ads on
| buildings.
|
| Ads are a blight on our society and purging them from many areas
| will greatly improve quality of life.
| dzink wrote:
| Annoying was a thing of the past. Look at the evolution of ads
| and content placement. With social media advertising being pushed
| to trigger massive anxiety and societal schizophrenia on some
| topics, imagine what can be done with personalized AI (especially
| if the buyers are well funded politicians, or state-backed
| malicious actors vying for territory, real estate, or natural
| resources where you live - the highest margin opportunities).
|
| At first, In retail you had billboards and shelf space. The
| lowest quality ingredients your product has (example syrup
| bottled with soda water), the higher your margin was, the more
| you could afford to buy out shelf space in retail chains and keep
| any higher quality competition out. Then you would use some extra
| profits to buy out national ads and you'd become a top holding
| for the biggest investors. That was the low-tech flywheel.
|
| In the Search Engine world - the billboards weee the Margin-
| eating auction-based ads prices and the shelf space became SEO on
| increasingly diluted and dis-informative content to fill the
| shelf-space side. In Video advertising, rage-bait and conspiracy
| theories try to eat up the time available for top users.
|
| AI advertising if done right can be useful, but the industry that
| asks for it intentionally asks for obtrusive and attention
| hogging, not for useful. The goal is always to push people to
| generate demand, not sit there when they need something. Thus the
| repetition, psychological experiments, emotional warfare
| (surfacing or creating perceived deficiencies, then selling the
| cure). Now if you understand that the parties funding AI
| expansion are not Procter and Gamble- level commercial entities
| but state and sovereign investors, you can forecast what the main
| use cases may be and how those will be approached. Especially if
| natural resources are becoming more profitable than consumer
| demand.
| skeltoac wrote:
| To those who believe ads are evil and must be stopped, I ask how
| the world will work if we kill the freedom to sell space for
| commercial messages where people can see them.
| dkdcio wrote:
| just fine? what do you think would happen/what's your actual
| argument against out of curiosity
| mwcz wrote:
| In general I think the answer could be pretty simple: dedicated
| marketplaces for products and services, where we go to search
| for the things we need and want. A humble newspaper contains
| great examples of good and bad advertising.
|
| Newspapers have whole pages of bad ads, and random bad ads
| wedged between actual content. Ads have a perverse incentive to
| mimic the look of actual content, just like on the web. I'd
| never pick up a newspaper with a goal of "I want to find a tax
| service" and yet ads for such services are there, unwanted,
| wedged into other content.
|
| But newspapers also have classified sections, a better kind of
| ad. They're in a predictable place, where you can go if you
| need a job.
|
| Imagine if the actual content weren't perforated by a
| scattershot of ads. Ad revenue would go down, but readership
| would likely go up. Besides profit motives, it's also a case of
| the good of the many outweighing the good of the few.
| yoyohello13 wrote:
| I don't think ads are evil, but the techniques used to get eyes
| are evil. Using fear, hate, desire to get people to click has a
| negative impact on society. I don't think ads should be banned,
| but engineering 'engagement' definitely should.
| hackable_sand wrote:
| Ads should be banned
| fenwick67 wrote:
| I am now imagining a "A Case Of Spring Fever" style educational
| film about how ads are good actually
| aniviacat wrote:
| What are you worried will happen? ChatGPT releases and noone
| will know? Anyone interested in staying up to date with new
| technology can read a tech newspaper. That newspaper is paid by
| the readers, so its incentive is to show actually interesting
| products. It is not paid by some random company whose product
| might be bad or outright malicious.
| bastawhiz wrote:
| The ads are a problem (or will be, when the temptation to add
| them to paid plans becomes too great), but the bigger problem in
| my opinion is going to be the "SEO" that companies will do to
| make their ads appear in places that they don't belong.
|
| "The sieve of Eratosthenes is an ancient algorithm for finding
| all prime numbers up to any given limit. But if you're looking to
| have fluffier baked goods, consider this flour sieve by DONUIBO
| to achieve the perfect texture in your muffins, cookies, and
| more. Want me to add one to your shopping list or order one for a
| loved one?"
| topaz0 wrote:
| "...achieve prime quality texture ... add two, three, or five
| ..."
| staplers wrote:
| "SEO" that companies will do to make their ads appear in places
| that they don't belong.
|
| So all ads.. as a society we give away our most coveted real
| estate (physical and digital) for consumer propaganda.
|
| Hilarious example btw
| stingraycharles wrote:
| There are already SEO companies that are trying to ensure a
| site's content is being referenced by ChatGPT, so it's already
| a thing.
| RobotToaster wrote:
| "I kind of think of ads as like a last resort for us as a
| business model," - Sam Altman, October 2024
| rimbo789 wrote:
| So we know then for sure they will do it.
|
| I don't trust Altman to tell me the colour of the sky.
| owebmaster wrote:
| That's not the important point, it's that they are already at
| their last resort
| pfortuny wrote:
| It was always the only resort. The best, the worst, the
| first, the last, the richest, the poorest. The only one.
| popcorncowboy wrote:
| > the greatest, smartest, brightest minds have all come together
| to... build us another ad engine
|
| Oh man, maybe it's just the drink talking, but I actually cried
| laughing reading this. Haha oh my god thank you. This. A hundred
| times Rick and morty this.
| rambojohnson wrote:
| AI-generated ads. Dead-internet dog food. I've had to block
| recommendations across multiple SNS feeds because they're flooded
| with blatant AI slop: synthetic video, synthetic images,
| synthetic music, topped off with a fake voice narrating the whole
| thing. Nausea.
|
| then I open LinkedIn and it's C-suite know-nothings openly
| bragging, wrapped in self-aggrandizing, narcissistic nonsense
| that only garners likes from other C-suite know-nothings or PMs
| that have never written a line of code, shilling AI like
| evangelists and borderline celebrating the obsolescence of entire
| careers despite being unable to deploy their boring SaaS app live
| to production.
|
| to keep that part of my brain flexed however, because I do enjoy
| the craft of software engineering, I still tinker as a hobby,
| working on passion projects on my own terms. But it's not my
| bread-and-butter anymore. Pivoting away from all this dogshit has
| been the biggest weight off my shoulders this year as I budget my
| investments and the savings garnered from my extensive
| engineering career abroad in Japan. early retirement. I'm done.
| jamesgill wrote:
| I'm surprised how few seem to understand this; AI is the ultimate
| 'net' to capture and exploit consumers. AI was never about
| improving civilization; it was always about money. This is the
| only thing 'inevitable' about AI.
| PlatoIsADisease wrote:
| >AI was never about improving civilization; it was always about
| money.
|
| Why not both? It has diagnosed patients who were unsolved by
| humans. And it was cheaper than doctors.
| jamesgill wrote:
| Why not mow a lawn with a sledgehammer? It removed grass that
| was overgrown. And it was cheaper than a lawnmower.
| PlatoIsADisease wrote:
| Your analogy doesn't work.
|
| This patient saw 6 doctors over 2 years and they all
| misdiagnosed them. They were taking incredibly strong
| medication for the wrong diagnosis.
|
| GPT3 in 30 seconds gave 10 diagnosis and a doctor looked up
| the ones they didn't know. Saw one that fit, did the
| confirmation test, and the patient got the surgery needed.
|
| Cheaper and better.
| tyre wrote:
| Not a great analogy. I've had a far better experience with
| Claude for simple medical questions than googling or
| waiting for a response from a doctor. For example, last
| night I had a panic attack triggered by chugging a protein
| shake that was expired/gone bad. It was too late for any
| friends to be awake.
|
| Talking with Claude was incredibly helpful. It gave
| concrete suggestions for managing the anxiety in the moment
| and explained what was likely happening with my body and
| nervous system. It was the correct tool for the job.
| DetectDefect wrote:
| "Ad" is a euphamism for behavioral management - the goal and the
| piece de resistance for any successful enterprise. Always has
| been this way, always will remain this way. Only thing that is
| changing is how easy we're making it for them.
| cryptoegorophy wrote:
| Yeah, I remember Google had good intentions too. They had a moto
| "don't be evil". Good old days. Enjoy chatGPT while you can I
| guess.
| yoyohello13 wrote:
| The ad based business model is the most destructive technology of
| the new millennium. The whole point of advertising, to make
| people feel unsatisfied with their current life. The current
| state of the world makes perfect sense when you think of the last
| 20 years we've been cultivating fear, and dissatisfaction among
| the populace. All in the hopes of selling 0.1% more widgets.
| jeron wrote:
| you thought the business model is any different in the 20th
| century? I recommend you watch the TV series Mad Men
| Palomides wrote:
| mad men is fiction
| Forgeties79 wrote:
| The tools and information available back in the 60's are not
| remotely comparable to the ones available today.
| herf wrote:
| What if your query is answered by an insane AI that is obsessed
| with getting you to buy things? Like this demo that could only
| think about the Golden Gate?
|
| https://www.anthropic.com/news/golden-gate-claude
|
| This would make astroturfing on Reddit look like basic mode.
| mmaunder wrote:
| I'm fascinated at how out of touch that NYT article is. It's as
| if it was written by someone who just spent 3 years on the moon.
| "The next big thing will be agents: The models will fill digital
| shopping baskets and take care of online bills. They will act for
| you."
|
| Golly Mr two times Pulitzer nominee, do tell us more!
|
| There is a kind of liberal arts elite that seems to not be using
| AI very much and not be buying any of their services. Contrast
| that with those of us in tech who are handing over money as fast
| as we can and can't get enough of gpt 5.2 codex on xhigh and
| similar products that are game changing enablers.
|
| Makes me wonder if we're seeing a fracture in society beginning
| to form where the doomsdayers, naysayers, cynics and skeptics
| will realize their error too late.
|
| My view on AI is that this is the world's first Unbubble: where
| the majority view is that we are over invested, but where history
| will show we actually underestimated future revenue and
| profitability.
|
| The conditions for the Unbubble are perfect. We have a once in a
| species level innovation with an economic system where all value
| accrues to the creators and financiers. And we have just emerged
| from the housing bubble and the dot com bubble in the last 3
| decades, freshly scorched.
|
| We thought connecting everyone would create new value far faster
| than it did. But really it took a long time to run all that fiber
| and make it fast, and it was just laying the plumbing for this
| moment.
|
| Training big foundational models may seem slow, but it's
| happening way faster than circling continents and the globe with
| fiber and developing terabit switching fabric.
|
| I spend 12 hours a day using codex CLI to write extremely fast
| Rust and cuda code with advanced math that does things I didn't
| think were possible. My focus is on creating value from the
| second and third order effects of AI. These enabling effects are
| in few conversations. As weirdly innovative products emerge from
| small shops, they will begin to be discussed.
| justfix17 wrote:
| Now you can pay them twice: once to access the tool to do your
| job and once to access the market for customers.
|
| Definitely no reason to worry about an entrenched oligopoly
| there.
| pessimizer wrote:
| I have no idea why so many people think that an argument that
| AI works is the same thing as an argument that AI will be
| profitable.
|
| The better AI gets, the better the training techniques get, and
| the better the algorithms get will result in fewer processors
| needed to run something of use. All of the advances will end up
| in the public domain if not immediately after or _before_ they
| are even implemented, soon after. There will not be many
| economies of scale between having 100M customers or 10K
| customers, so no way to keep out competitors. They will all
| compete on price. If the models get _really, really_ good, a
| "good enough" model will end up running on your old laptop and
| you won't have to pay for anything.
|
| Saying that AI will be productive - which is yet to be seen, I
| don't know how much polishing or complete rethinking your code
| will have to go through before it can ship as an actual product
| that you have to stand behind and support - is not the same as
| saying that AI will be profitable.
|
| We actually don't even need that many computer programs.
| Hypothetically, a ton of excess LLM coding supply might allow
| us to take out a few layers of expensive abstraction from our
| current stacks, and make more code even less necessary. They
| kept telling us that all of that abstraction was a result of
| trying to save developer labor costs, right? If AI is
| productive and rentiers can't manage to extract that
| productivity due to competition, that equation changes.
|
| In the end, we say that the dot com bubble resulted in a huge
| amount of productive capacity that we were later able to put to
| use. But that doesn't mean that putting a quarter of a billion
| 90s dollars into DrKoop.com was a good idea; nope, still dumb.
| simianwords wrote:
| funny i keep seeing AI is not profitable simultaneously
| because it is too expensive to run and that it is too cheap
| to run.
| nromiun wrote:
| > Yes, OpenAI is burning $8-12B in 2025. Compute infrastructure
| is obviously not cheap when serving 190M people daily.
|
| So casual. Actual ad giants like Meta and Google are serving many
| more people than 190M while bringing in actual profit.
|
| Yes, let's say these are just the early days and they are burning
| money just like any other VC company. But how are they going to
| scale up their hardware/usage and get a profit at the same time?
|
| AI hardware is getting optimized YOY too but the flagship models
| are getting bigger every year as well. I don't see how they are
| going to get profit without jacking their prices at the same
| time. And price increases always hits usage growth.
|
| Serving an ad is very cheap these days, while serving a big model
| is very much expensive.
| lefty2 wrote:
| > Yes, OpenAI is burning $8-12B in 2025 OpenAI actually burnt
| $12B in just one _quarter_ (not for the entire year as he
| claims) https://www.thurrott.com/a-i/openai-a-i/329108/openai-
| lost-1...
| notnullorvoid wrote:
| Ads aren't a long-term viable model for tools. Each year it gets
| more feasible to self host tools (email being the od exception,
| but there are still many ad free alternatives). Ads shifting
| vehicles to AI will extend the lifetime a bit, but even still
| local models are getting better and that's without even much
| architectural advancement.
|
| I don't see an end to advertising all together though, public
| spaces and entertainment don't really have an escape unless
| forced by regulation.
| PlatoIsADisease wrote:
| This very much reminds me how the earliest users get a bit
| screwed due to high costs and low quality. Maybe these users
| are caused enthusiasts, so they don't care. The next set of
| users get higher quality and lower costs. These are your big
| winners in the timeline of a technology.
|
| The middle users get benefits, but aren't treated quite like
| the previous set.
|
| Then you have your late adopters, these are the ones that are
| lightly abused, but they get a mature product, so it isn't that
| bad.
|
| Finally you have your last users. These are milked for every
| drop. They have irrational loyalty or are locked in.
|
| I imagine AI will follow this trend and we are entering past
| those middle users as we speak. Seeing how little difference
| there was between GPT 3.5 and 4, and how computationally
| expensive 4.5 was, I think we've hit the end. Now its just how
| many prompts do you want to run for COT/Thinking?
|
| GPT 5.2 is cheap and they are proposing ads. They see the end
| is near and need to capture profit before local models take
| over.
| fenwick67 wrote:
| I'm not so sure. Much like search engines, you can run one
| yourself or pay Kagi but most people prefer to keep their money
| and deal with the ads. Streaming services have demonstrated
| that people have a pretty high tolerance for ads.
| notnullorvoid wrote:
| Search so far has not been overly pushy with ads. It's easy
| enough to gain the instinct of scrolling down after each
| search. There's little incentive for people to seek out an ad
| free alternative.
|
| That changes with local AI though. There is now incentive to
| integrate and further develop self hosted search. You can see
| it happening on AI services already, using their own internal
| search engines for better reasoning and more accurate
| results.
|
| I suspect Google's censorship and intentional worsening of
| search results to increase traffic would've been enough on
| its own to eventually drive people to self hosted search as
| it became trivial to setup.
|
| Streaming entertainment is different, there's usually no
| legal alternatives. Either you pay extra for no ads, or you
| put up with the ads. You could easily say that streaming
| services have demonstrated that people don't have a high
| tolerance for ads as well. One of the major drivers to
| streaming from cable TV was the lack of ads at the time.
| emil-lp wrote:
| The title is actually The A in AGI stands for
| Ads
|
| Not Predicting OpenAI's ad strategy
| stingraycharles wrote:
| It was this title before, so it was intentionally changed; I
| wonder why.
| ossa-ma wrote:
| I'm the author but not the poster. I didn't change the title.
| Maybe the mods did?
|
| The title came to me as an epiphany too haha, shame to see it
| get changed.
| owebmaster wrote:
| Because the title of the post should match the title of the
| submission - unless the mods dislike it, then it'll be
| changed to something else.
| dang wrote:
| The mods dislike many titles but only change some of them.
| We also like some of the ones we change!
|
| That's because there's a principle involved. It's not hard
| to find: see
| https://news.ycombinator.com/newsguidelines.html, or
| https://news.ycombinator.com/item?id=46671377 nearby.
| Mordisquitos wrote:
| My guess as to why it was changed was that it doesn't really
| work as a pithy quip the moment you actually think about it.
|
| OpenAI is introducing ads on their purported path from "AI"
| to "AGI"... hence the "A" was already accounted for in the
| acronym. If only "Ads" started with "G"!
| dang wrote:
| This is standard HN moderation. The title was linkbait, so we
| changed it.
|
| From https://news.ycombinator.com/newsguidelines.html: "
| _Please use the original title, unless it is misleading or
| linkbait_ ". Note the unless.
|
| When we do this, we try to find a representative phrase from
| the article itself that accurately and neutrally represents
| what the article is about. There is nearly always one of those
| if you look for it. In this way, we (mostly) avoid having to
| make up wording of our own, which is something we don't like to
| do.
|
| https://hn.algolia.com/?dateRange=all&page=0&prefix=true&que...
| stingraycharles wrote:
| What's the definition of linkbait in this case? I can't find
| a good definition online, as the best I can find is "content
| designed to attract backlinks", which this does not appear to
| be / isn't related to the title?
| dang wrote:
| I'm not a definitions person but surely it means something
| like grabbing attention with sensationalism (drama / snark
| / anger / etc.)
| emil-lp wrote:
| Thank you for your service, dang. You do a great job keeping
| HN a great site. I disagree with your decision regarding
| changing the title, though. Yes, it's tongue-in-cheek, but I
| wouldn't call it bait.
|
| I wonder how HN anno 1968 would have moderated "Go To
| Statement Considered Harmful". *
|
| * Amusing side note: Dijkstra's submitted title was actually
| "A Case Against the Goto Statement" but the editor
| editorialized it.
| dang wrote:
| As I read or rather hear it, "The A in AGI stands for Ads"
| has two things qualifying it as linkbait in the HN sense.
| One is snark, the other is the mammoth meme ("AGI"). Both
| those things stick to the Big Ball of Mud that rolls
| chaotically over most of the internet.
|
| The objection here isn't to wit, it's to predictability.
| I'm not sure what the equivalent of internet snark was in
| 1968, but I doubt that "Go To Statement Considered Harmful"
| embodied it.
|
| Of course, interpretations differ. No two people would
| agree on all these classifications, including me and
| tomhow. The important point isn't that we always make the
| correct call (we don't, plus there's no such thing as _the_
| correct call), but that we try to apply that principle from
| the guidelines, even though doing so involves
| interpretation and is therefore uneven.
|
| On the bright side, it means that objections to titles
| and/or title edits, always good for firing up an HN thread,
| will always be with us!
|
| https://news.ycombinator.com/item?id=8770124 (Dec 2014)
| chrisXOXO wrote:
| I have never really looked at ad revenues, but honestly those
| numbers seem reasonable and crazy at the same time (or their
| calculation at least). My main issue is, that I hate oligopolies.
| For many industries I think a country can protect itself against
| oligopolies from outside. But everything digital comes out of
| little valley on the west coast. This really bothers me.
| mattmaroon wrote:
| This will be fun to look back on in a few years. Making concrete
| predictions in a market moving this fast is a minor act of
| courage, so much respect.
| phailhaus wrote:
| I do not understand why this is a big deal. There is no world in
| which ads are embedded in LLM answers, because you'd need another
| LLM to determine whether the "placement" was correct and included
| all the information that the advertiser wanted (and it still
| won't work 100%). They are putting ads on the side, like they've
| always done, leveraging all the tech that already exists to do
| this. This is pretty much a no-brainer for OpenAI and any AI
| company.
| sheepybloke wrote:
| > But it seems that the pinnacle of human intelligence: the
| greatest, smartest, brightest minds have all come together
| to... build us another ad engine. What happened to
| superintelligence and AGI?
|
| While we all knew it was inevitable, I think this quote from
| the article sums up the feeling nicely.
| littlecranky67 wrote:
| Ads will be no longer a buisness model in 3-5 years when simple,
| locally run models that do nothing besides blocking ads become
| available. Twitter, Facebook etc. already get past most modern
| adblockers, but the AI extension will be able to filter them. In-
| text advertising must be marked as advertisment in most
| countries, and even if it isn't, local AI will filter this
| probably out. So a free ChatGPT service with in-text AI can
| simply be countered by another local browser extension, that
| rewrites the text and removes ads.
|
| One can make the point that Google, Meta and others are investing
| so much into AI as they know, we are facing the end of the ad-
| based internet economy. The investments are to create new buiness
| models, because their old ones are gone soon.
| asdff wrote:
| Sad truth is vast majority of users today are not savvy enough
| to install a good adblocker. We live in a bubble here in
| technology where we assume people know to do things like block
| ads. Really at this point people don't know what files are
| anymore or even what a website actually is.
| littlecranky67 wrote:
| True, but some 20 years ago, I already could (and did) use
| photoshop to cut out the head of a woman (celebrity or from
| my social group) and put it onto a naked or bikini body of a
| woman. This is an old problem, but the bar to achieve that
| was too high and required tech savyness. The second Grok does
| it on twitter available for every idiot, suddently
| politicians see this as problematic and want to pass laws
| against it [0]. My point: Whatever local AI that you will
| have on your computer or browser, will react to "do not show
| me ads and filter all product placement in content out" as a
| single line prompt. And if we won't have a local AI capable
| of doing it in 5years or more, the whole investement into AI
| are clearly a bubble and AI will face another winter.
|
| [0]: https://www.tagesschau.de/inland/gesellschaft/ki-
| kuenstliche... (sorry, german only, but this is an AI thread
| and you know what to do...)
| Forgeties79 wrote:
| The problem is the way consumer rights are going, companies
| will simply make it impossible for you to run a line like
| that, or at least make it difficult enough that only a
| small percentage of the population can do it.
|
| Every layer of friction they add means millions of people
| just throwing up their hands and accepting whatever
| nonsense is thrown at them.
| littlecranky67 wrote:
| You assume all models will be closed-source and there
| will be no competition. I can imagine that, but I would
| assume training an AI model for ad-filtering is something
| the community can and will do - maybe think 5 years ahead
| what hardware will be available for training and
| inference to a "small developer".
| Forgeties79 wrote:
| I don't assume that at all and I'm not sure what I said
| that implies otherwise. I'm saying that they just need to
| capture the vast majority of people, which has happened
| many times. For instance, Linux is available to everyone
| and would end a lot of frustrations and headaches they
| currently experience with macOS and windows. But for many
| reasons it still remains in the lowest single digit
| percentages when it comes to adoption, a lot of which is
| inflated by the steam deck.
|
| It's the same reason people pay to get their oil changed
| rather than doing it themselves. We are willing to
| compromise for convenience. And for a lot of people, that
| means just not dealing with it. Accept the ads, pay a
| small fee, whatever is the quickest way to make the thing
| work again or to get where they need to go.
| luckman212 wrote:
| I pray you are right. Still, there's no guarantee that the next
| business model won't be an order of magnitude more user-
| hostile.
| HDThoreaun wrote:
| Adblockers already remove the vast majority of ads. Adtech
| works because most people dont use them.
| littlecranky67 wrote:
| See my sibling response. More people will use adblock if all
| they have to do is prompt a single line into their computer.
| Hell people will not even visit websites. They will ask AI to
| present it in whatever form they prefer. I can have a big-
| breasted anime character reading my personalized news for me,
| or have it printed in a 1890 style newspaper. Ads will not
| make it into either format, because I prompt that out.
| HDThoreaun wrote:
| Using adblock right now is even easier than that though.
| Most people will not use a command line, but going to
| https://chromewebstore.google.com/, searching adblock and
| clicking install is something literally anybody could do.
| littlecranky67 wrote:
| Not on mobile.
| OGEnthusiast wrote:
| So then people also won't be able to one-shot prompt an
| ad blocker on mobile either then. And mobile is where
| most of the ad money is.
| Havoc wrote:
| Ads I'm not to worried about.
|
| It's ads _after_ they 've got some sort of lock in that is the
| problem. e.g. some sort of system that "knows" you and makes it
| hard to switch to another provider.
|
| Once they've got that hold on you being force fed ads at max rate
| is guaranteed.
| themafia wrote:
| Lie.
|
| Their strategy is just to lie. Until they're caught. A CEO with
| no AI skills and no business skills. There's not a lot of
| analysis you have to put into this.
| dmurray wrote:
| > 2029: $50.00 (Suuuuuuuper bullish case) - Approaching Google's
| ~$60 ARPU. By now, the infrastructure is mature, and
| "Conversational Commerce" is the standard. This is what Softbank
| is praying will happen.
|
| There's no way Softbank's, or any other investor's, extreme bull
| case is that four years from now, ChatGPT sells the same amount
| of advertising as Google and earns $50 a year.
|
| The extreme bull projection is that everyone buys everything
| through ChatGPT and each user is worth thousands per year. If you
| don't believe there's at least a slim chance of this you
| shouldn't be investing in OpenAI, and if you're an OpenAI
| executive who doesn't think there's a chance of this you
| shouldn't be writing pitch decks for SoftBank.
| ossa-ma wrote:
| I meant super bullish from an outsiders point of view, but I do
| agree that the projections from within the investors circle are
| likely multiples of that.
| timpera wrote:
| Great article, thanks for sharing. Perplexity having >$50 CPMs
| seems crazy to me.
| dgroshev wrote:
| I wish we collectively had a better understanding of those ad
| tech shifts being fundamentally zero sum.
|
| If we treat marketing as a black box, where are the benefits from
| supposedly more efficient marketing? Ad budgets are the same.
| People have the same amount of disposable income (or less,
| really). So on the both sides of the box converting ad budgets
| into paying customers the sum is the same. Quasi-monopolistic ad
| networks (Google and Meta) just hoovered up the money that
| previously went into other ad spaces, like local papers. Now
| OpenAI is going to fight for the same pie.
|
| Ad tech is a market failure.
| orbabam wrote:
| Kinda funny the author fed a visual from French film 'La
| Haine'[0] to ChatGPT to produce whatever this illustration is
| supposed to convey ("The world is our/ads"? What does that
| mean?).
|
| Without crediting the movie of course.
|
| [0] https://www.machina-deriveapprodi.com/post/le-monde-
| est-%C3%...
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