Ads become less useful? How are cheap ads more useful?
No business has been bankrupted by increased ad fees, that is a simple win loss calculation. It isn’t vital for any business other than the ones that produce ads, but they are going to continue producing ads either way unless the platform loses all advertising in which case it will lower the fees or simply hemorrage money.
Advertising is wasteful, harmful and annoying. It has negative social utility. No sane economic system would have an entire industry dedicated to manipulating people into buying stuff.
But we don’t live under a rational economic system, we live under capitalism. In many industries, especially the consumer-oriented ones, advertising is a necessary cost of doing business. You need to advertise to make customers aware of your existence and to induce demand for your products and services.
The near-monopoly of advertising platforms such as Google and Facebook means that they act as gatekeepers between businesses and the market and buying advertising space is a form of rent businesses have to pay to the platforms.
When the price of advertising increases, the rate of profit of advertisers decrease, just like when landlords increase the rent of physical space. If that margin gets too thin the business becomes unviable. If a business don’t do advertising they don’t get enough revenue to stay viable. It is a damned if you do, damned if you don’t situation.
Price gouging done by platforms to advertisers is a textbook example of the tendency of capital to concentrate. Capitalists are not only extracting profit by exploiting labour, they are also seeking to extract profits from eachother and when you get to a position like that of Google or Facebook, your ability to do that is immense.
There are no good guys in the advertising market but that doesn’t mean that the big crooks are not bleeding the smaller crooks dry.
The enshittification was already in full swing by the point wheee Google was pushing paid advertising to the top, charging more for it didn’t change the dynamic. The argument was already lost before they increased ad fees.
I don’t understand how the allocation of ads is supposed to work any other way than hiking prices until the breaking point, speaking of tendencies. If it cost 5 cents to publish ads it would either result in being close to useless if you are only allowed one ad per company or big companies flooding it with a huge amount of 5 cent ads giving the same result as the price hike.
The fundamental problem is the ads themselves (or capitalism if you wanna push it that far) forcing people to pay for exposure that would otherwise be organic. I think hiking ad fees might be the single worst example you could give of ‘treating business partners badly’ in this context.
Just because it is “supposed” to work this way doesn’t make it friendlier to the people being priced out of ads. But if you want another example of enshittification, intentional algorithm and platform twiddling by Facebook has killed businesses. One day they’re pushing social games like Farmville, and the next, without warning, these games are stuffed. One day they’re pushing celebrity headlines, and overnight, buzzfeed-likes see their viewership decimated.
Yes, all of these things suck for the consumer either way, but enshittification makes it suck for the business partners too. It’s not a comfort to an advertiser that they’re supposed to be eaten by bigger fish, and it doesn’t make it any less ironic that a platform that was once there for consumers and businesses now apparently offers nobody anything but is impossible to leave nonetheless.
the point being the ads become less useful, return less on the investment but the price continues to rise because… monopoly
Ads become less useful? How are cheap ads more useful?
No business has been bankrupted by increased ad fees, that is a simple win loss calculation. It isn’t vital for any business other than the ones that produce ads, but they are going to continue producing ads either way unless the platform loses all advertising in which case it will lower the fees or simply hemorrage money.
Advertising is wasteful, harmful and annoying. It has negative social utility. No sane economic system would have an entire industry dedicated to manipulating people into buying stuff.
But we don’t live under a rational economic system, we live under capitalism. In many industries, especially the consumer-oriented ones, advertising is a necessary cost of doing business. You need to advertise to make customers aware of your existence and to induce demand for your products and services.
The near-monopoly of advertising platforms such as Google and Facebook means that they act as gatekeepers between businesses and the market and buying advertising space is a form of rent businesses have to pay to the platforms.
When the price of advertising increases, the rate of profit of advertisers decrease, just like when landlords increase the rent of physical space. If that margin gets too thin the business becomes unviable. If a business don’t do advertising they don’t get enough revenue to stay viable. It is a damned if you do, damned if you don’t situation.
Price gouging done by platforms to advertisers is a textbook example of the tendency of capital to concentrate. Capitalists are not only extracting profit by exploiting labour, they are also seeking to extract profits from eachother and when you get to a position like that of Google or Facebook, your ability to do that is immense.
There are no good guys in the advertising market but that doesn’t mean that the big crooks are not bleeding the smaller crooks dry.
The enshittification was already in full swing by the point wheee Google was pushing paid advertising to the top, charging more for it didn’t change the dynamic. The argument was already lost before they increased ad fees.
I don’t understand how the allocation of ads is supposed to work any other way than hiking prices until the breaking point, speaking of tendencies. If it cost 5 cents to publish ads it would either result in being close to useless if you are only allowed one ad per company or big companies flooding it with a huge amount of 5 cent ads giving the same result as the price hike.
The fundamental problem is the ads themselves (or capitalism if you wanna push it that far) forcing people to pay for exposure that would otherwise be organic. I think hiking ad fees might be the single worst example you could give of ‘treating business partners badly’ in this context.
Just because it is “supposed” to work this way doesn’t make it friendlier to the people being priced out of ads. But if you want another example of enshittification, intentional algorithm and platform twiddling by Facebook has killed businesses. One day they’re pushing social games like Farmville, and the next, without warning, these games are stuffed. One day they’re pushing celebrity headlines, and overnight, buzzfeed-likes see their viewership decimated.
Yes, all of these things suck for the consumer either way, but enshittification makes it suck for the business partners too. It’s not a comfort to an advertiser that they’re supposed to be eaten by bigger fish, and it doesn’t make it any less ironic that a platform that was once there for consumers and businesses now apparently offers nobody anything but is impossible to leave nonetheless.