Yves here. What Wolf describes is how most sites make their living via advertising. If you have a very specialized audience, you might be able to sell your own ads. For instance, one of our previous WordPress jockies had as her main client a site which was the leader in reviewing high-end watches, as in a $5000 watch would be low end for them. Needless to say, the site was lousy with what she called “watch porn,” as in really busy (and pricey) watch ads.
For the record, while we do have contextual ads, we do not use Google Adsense. Our ad service sells premiums ads across a “vertical” of sites with similar demographics to NC, and the rest of the space goes to “remnant” ads from a host of advertisers. Our ad service claims it monetizes that space at a better rate than Google. In addition, I am separately leery of Google on general principle (why do I want to be in business with a company that makes its living off of spying on people and makes it virtually impossible to reach a real human being when you have a problem you need fixed) and because former employees have alleged that Google systematically cheats its biggest publishers (not that I would rise to that level but who wants to take that chance?)
Also, if you are new to the site, or missed the post, please see here how NC leaves a lot of ad dollars on the table by refusing to run really intrusive ads, like popups or ads that are inserted into the text of an article. So we really do go to some lengths to be considerate about advertising.
By Wolf Richter, a San Francisco based executive, entrepreneur, start up specialist, and author, with extensive international work experience. Originally published at Wolf Street
Funny thing happened. My article about Deutsche Bank’s decision to dump its stake in a Chinese bank, as other global banks had already done [What Secret Do Global Banks Know about Chinese Banks?], immediately triggered a long comment about … internet advertising.
“Nick Kelly” ruminated about the ads he’d seen as he was reading the article. It triggered a slew of other comments about the baffling, funny, aggravating, sometimes spooky, and often nonsensical aspects of internet advertising.
We might laugh or scream in despair or tear our hair out in frustration, but internet advertising and everything that comes along with it, such as incessant snooping, is a relentlessly booming industry.
It signals an epochal change. Numerous traditional newspaper publishers have gone bankrupt. Others are barely hanging on. Life is switching to the internet, and so they too scurry to the internet to make a living there. But internet ads don’t pay nearly as much as paper ads. And the old math no longer works.
The problem: a ballooning supply of ad space competes for limited demand by advertisers. And rates for ads have been crashing over the years.
So they make it up with volume – and evermore intrusive and obnoxious ads: internet advertising revenues in the US in the third quarter reached $15 billion, a new record, up 23% from the third quarter in 2014, which itself had broken all prior records (chart).
The report hinted at how these record dollar figures are being obtained: “Brands and agencies are focusing ever more attention on interactive screens, following consumers as they flock to digital platforms to be entertained, engaged, and informed.”
“Following consumers….” That’s the key.
We got a tiny fraction of that $15 billion in Q3. It came our way via the ads you see on this site. Most of them are from Google’s ad exchange Adsense, where advertisers bid to have their banners displayed on participating sites. It all happens in microseconds. The highest bidder gets the spot.
You occasionally also see ads that we place directly for our clients. Google isn’t everything. (If you want to explore advertising on Wolf Street, contact me.)
So when you open a page on my site, a mad scramble ensues behind the scenes at Google as to which ads appear, based on keywords in the article, cookies and browsing data stored in your device, your online dossier, what you’ve done with your smartphone, and a million other things.
Advertisers bid on the space. The winners get to place their banners in the article. They pay Google, which eventually pays my company, Wolf Street Corp, its cut.
This can produce bizarre results. Nick Kelly put his finger on it. And commenters replied with their own stores. Here’s “hidflect” to “Nick Kelly”:
Nick, your ads are different depending on your region, browser, OS and especially what cookies you have on your machine. It can be very disturbing to have an email conversation with someone about, say, controlling your weight through exercise and 10 minutes later see ads for dumbbells cropping up in your margin.
“picobello” to “Nick Kelly”:
Welcome to the Internet in the year 2015, Nick, where you are being profiled by Google, Facebook, and god knows who, to give personalized adds depending on the email content you get in your Gmail, sites you visit, Google search terms you use etc., etc. These are even linked to your phone and what sites you visit on your phone. Don’t worry, you don’t need to have an actual Google or FB account as they’ll just make a shadow profile. If I have your phone number in my phone with your name etc., and I install the FB app, it will upload your phone number, name, email address etc., and they make a shadow profile. Next time you buy something online and fill in your name voila! They know it’s you. So that’s how you get personalized ads.
“Mary” to “picobello”:
It can be fun, or alarming, to try and figure out how ads are chosen for your eyes only. My version of Wolf Street is heavily populated by offers to test me for Alzheimer’s. But the creepiest: A couple of months ago, I accidentally turned on my Mac’s iSight camera and took a picture of myself. Since then a wrinkle removal ad has been rotating that has a crude line drawing of my face.
I’m targeted by good looking Chinese women who wish to “date” me. Obviously these women know something too since they are prepared to pack their things and leave the “miracle economy” and move to Europe.
“Thomas” to “Yoshua”:
I get the same but from beautiful Russian women. Are we being racially profiled by Google or are they just datamining pornographic preferences… hmm.
“Nick Kelly” then shared this elucidating tidbit:
Once after surfing porn between real work, I got a pop- up:
“You have visited a pornographic site! Protect your job, your marriage, your reputation! For just $10, we can remove all traces! We are an authorized MS contractor.”
A couple of years ago, a reader sent me a screenshot of a sushi ad next to my article on Fukushima!!
And then there’s this… Remember the rise, almost-IPO, and sudden belly-flop of Ashley Madison, the cheating service that was hacked? All heck broke loose in September after its members’ data was posted online. As I was reviewing Larry Kummer’s article on this topic that I’d posted on my site, the banner that appeared in the text about halfway down was, let’s say, peculiar – and I took this screenshot:
The image – I don’t know what deal or scam it led to – is very similar to the image Ashley Madison used, the same frame of a woman from the nose to the shoulders, signaling to be quiet, with a wedding band on her ring finger.
“Life is short. Have an Affair,” was Ashley Madison’s motto while it was still perceived as a cheater service rather than just a scam of bots and fake pics tricking guys into spending money.
Now we fooled-men get the “Please forgive-me” Flowers ad to be fooled once again. Typical Google sarcasm.
It’s “contextual” advertising. Whether or not you ever checked out Ashley Madison, you might have seen that “Please forgive-me” Flowers ad on Wolf Street based on the context of the article, and nothing more. It’s not your fault!
So here are the dark lessons from Ashley Madison that are seldom mentioned by the media. Read… Three unmentionable insights about people, free from Ashley Madison
“Billions of dollars are flowing into online advertising. But marketers also are confronting an uncomfortable reality: rampant fraud.
About 36% of all Web traffic is considered fake, the product of computers hijacked by viruses and programmed to visit sites, according to estimates cited recently by the Interactive Advertising Bureau trade group.
So-called bot traffic cheats advertisers because marketers typically pay for ads whenever they are loaded in response to users visiting Web pages—regardless of whether the users are actual people.
The fraudsters erect sites with phony traffic and collect payments from advertisers through the middlemen who aggregate space across many sites and resell the space for most Web publishers. The identities of the fraudsters are murky, and they often operate from far-flung places such as Eastern Europe, security experts say.
Chief Executive Vivek Shah, the chairman of the Interactive Advertising Bureau, said at the group’s annual conference last month that Internet advertising was facing a “crisis.”
“The clients we work with would love to spend more money in digital,” says Quentin George, a co-founder of ad-technology consulting firm Unbound. “But until we give them more control and transparency on how the money is being spent, they will continue to have questions and hold money back.”
“We’re aware of the concerns within the industry about ad fraud and are working to address those concerns as they pertain to our business,” a GM spokeswoman says.
“They look upon fraud as a greater crime than theft, and therefore seldom fail to punish it with death; for they allege, that care and vigilance, with a very common understanding, may preserve a man’s goods from thieves, but honesty has no defence against superior cunning; and, since it is necessary that there should be a perpetual intercourse of buying and selling, and dealing upon credit, where fraud is permitted and connived at, or has no law to punish it, the honest dealer is always undone, and the knave gets the advantage.” ~Jonathan Swift, Gulliver’s Travels
I belong to an online virtual world platform that had the same problem …10 years ago. Rampant bot fraud to inflate traffic numbers. Watching the exact same scenario unfold in global proportions for billions of dollars is entertaining…also entertaining is knowing that there is literally no way to stop it. It just becomes an arms race as the platform finds new ways to distinguish “real” traffic and then the scammers mimic around it. Eventually the entire industry crumbles from lack of trust, even though the big guys will keep paying because the strategy does deliver some revenue – somehow they manage to justify their exorbitant cost of acquisition to an idiot in the C suite to keep the game rolling.
From boingboing about a new science fiction short story:
“what if game companies could get rich on bots, instead of players?”
“The core of our Minimum Viable Product was exactly what we set out to do in the beginning: Make it possible for bots to play a game and spend money. Doing those two things would make a bot functionally equivalent to a real human player when it came to our game health metrics, and thus make the bumps on the KPI charts real — well, “real” when it came to our P&L.”
Sometimes the algorithms used to present certain ads to certain people produce some weird results.
For a few months last year and early this year, I would regularly see ads in Spanish for feminine hygiene products at Walmart. I am a divorced old white man living alone who knows about 10 words in Spanish and I don’t ever use them in my writing. I do shop at Walmart, but I rarely use their website and none of my shopping or spending activities are on my computer or phone. And I obviously have no interest in feminine hygiene products.
The economic commons has always failed. It works for awhile on the frontier, when there is plenty of grass, but then comes inevitable over-grazing. I use ad-blocker software myself, which means I’m on the open range some of the time. I do however turn off the ad-blocker for the sites I favor – and most of those sites seem not to attract the really annoying ads. I am also noticing more of the media outlets requiring a paid subscription. I expect the solution to this problem will have to be found in a new type of internet barbed-wire.
Ultimately it comes down to customers being willing to pay for the content. How much is Naked Capitalism supported by users vs ad revenue? Andrew Sullivan proved it was possible to build a subscription model if your content was good enough. HBO proves it every day. Netflix is proving it. The problem for most is that people will only pay subscriptions for truly top-tier content. Your output has to be so valuable that people WILL pay. Small outposts don’t really stand a chance in that game, even big names can’t stand up against top tier content; look at the number of cable cord cutters who are just shifting to HBO and Netflix subscriptions.
It’s frustrating to be chum in this feeding frenzy. I’m waiting for the mandate to watch data profiled advertising every second one rides in their automated
jail cellcar taking them (on a digital prayer) to a few mandated places, such as a mandated attitude adjustment visit, or a mandated shopping center, before they can go where they want assuming it’s on the mandated list of allowable places to go.
In the meantime, before this happy utopia fully materializes, I find myself subject to relatively few targeted ads with the only downsides being I must be a frustrated paranoid old geezer:
0) For context, I run Windows XP (next stop, Linux possibly with virtual copy of my WinXP for some old programs)
1) No smart phone
2) No social media accounts (not even linkedin – for many that is simply not possible)
2) Old fashioned email client going to old fashioned email server (not web based).
3) Firefox private browsing combined with duckduckgo when ever I run a “merchandise” query. Also information queries when i judge there is any relation to what might be considered someone’s (not necessarily mine) retail interests. This is not a panecea (I think Google – which duckduckgo uses after it strips your ids – just plays along), nor do I stick to it religiously, but it seems to be effective for the time being.
5) I occasionally go in with a command window and ruthlessly delete the cookie area of my pc login. I doubt I get everything, but it feels good.
6) Never knowingly use Google when it can be avoided. I stopped going to Weather.com as soon as I heard Google had bought it.
7) very careful about what email I open (and have my email reader set not to read text before I open). Again, this is not perfect. Almost impossible to catch everything.
Of course I can’t stop being “recognized” at traffic stops and intersections or being tracked by my old fashioned cell phone (can’t be bothered with turning it off – what’s the point of having it?) or dear god only knows how many other unconstitutional intrusions, so I just don’t worry about it – other, of course, than maintaining my official frustrated paranoid old geezer status in good standing.
For real private browsing, one may want to get a OS on a read only memory stick and then optionally top that off with more precautions such as a specialized web browser going to the Onion Router and so on. From what I’ve heard, that has problems of it’s own, especially if you want to use it all the time.
In all of this, unless one specialized in this stuff or has a ton of money and a lot of time, forget about your constitutional right to privacy from the state – it’s gone, so your just wasting good paranoia potential – and remember that repeated use of TOR is STILL a red flag to them and probably overkill for staying below the commercial radar.
You and many others are probably already on a government watchlist just for reading alternative news websites, since the government views informed people as a threat. People who disbelieve the official narrative have been radacalised. You might as well use TOR so that they cannot track you if they are already watching. While you are at it PGP encrypt all of your emails. It annoys them that they cannot read it hence all the recent calls for encryption to be banned. I encrypt things like shopping lists etc to mess with them.
If everyone is using TOR and email encryption they will have so many people to watch it will become very expensive to keep tabs on all of them.
Unfortunately, the infrastructure to do all that spying is in place. Once the surveillance software is worked out, only the ‘red flags’ will need to be wetware curated.
Very sensible advice.
Your item (0) is what I do now. Fortunately, I have to run the XP virtual machine very rarely, maybe once a year now.
I started doing (1) after I lost my ancient smartphone. I barely miss it; grocery shopping lists on paper always work better than apps, to name just one example.
I did step (2) a couple of years ago. I still can’t figure out what good LinkedIn is except for dunning you with useless reminders and notifications.
(3) Startpage is a decent Google parasite: they use Google for searches but Google never knows it’s you.
For (6), try using the National Weather Service web site. Kinda clunky, always pretty accurate, very little fluff.
I avoid the problems in (7) by using a terminal-based mail client, but that’s something only the oldest Unix users would be comfortable with, I guess.
Ghostery is useful in blocking various ads, widgets, beacons and such.
Curses BB! Google bought Weather.com??? No wonder it has been acting ‘strangely’ of late. I always knew that Disney had a chunk of weather.com because of all of the ads for Disney associated stuff. Who, after all regularly ran ads for Disney, disguised, and barely at that, as ‘infotainment.’ I always admired the gall of having the place keeper address in weather.coms look up a place slot be “e.g. Disneyworld.” Although I now see the Disney stuff is muted, or gone.
The Google bio sketch of Weather.com mentions NBCUniversal as one of the three main stakeholders, which means Comcast. Also mentioned are Blackstone and Bain, which means ???
Google is now a subsidiary of the dreaded Alphabet. I suspect that Alphabet and Comcast hate each other, so, stormy weather ahead for The Weather Channel!
Most of the data from weather.com is derived directly from the NWS/noaa.gov.
Just go to the source, no ads.
I may have spoken too soon. I can’t find supporting links.
“The honest dealer is always undone, and the knave gets the advantage”
Is that not the truth. A strong personal network built on trust is the only way a person wishing to pursue a life of honesty can exist. This way of life is made more difficult because you must expend energy to combat the powers of fraud which are always trying to find a way to exploit. You are always paddling upstream because going with the flow of fraud is not an option. The choice is then one of joining in on the looting or removing oneself from the system.
A bunch of fraudsters jockeying to defraud each other- what a great system.
I regularly clear Cookies on both computer and smart phone and often disable them entirely. I hate it when I’ve been shopping for a gift for my wife and it suddenly pops up in a banner ad just as she’s reading over my shoulder! Apple now saves my passwords, so re-entering them isn’t much of a hassle. I also generally read sites using the easy-on-my-eyes Apple Safari Reader, so I don’t see whatever advertising that my previous browsing may have provoked.
Fraud is so rampant on the Internet. I can’t imagine why advertisers bother.
You answered your own question when you linked advertisers and fraud cher.
“Advertising is legalized lying.” H. G. Wells
Certainly the funniest thing I have read today.
Avoid slimy (effing#$@) Giggle like a plague!
One way: use Duck Duck Go for search. They do not use tricks from the toilet; in fact they only present the search results without any cookies, data-stealing, or other Giggle-mania!
And relegate ButtBook to the bit bucket while you’re at it; use a personal web site (for pennies and up) for all your news and friends; this will drive Buttbook crazy according to the moans coming from under the well-known ratty T-shirt lately!
This boingboing article links to an online talk that neatly dissects web ads from Google and others. The full talk also dissects web bloat.