It annoys me that big-tech marketing has made most people believe that "personalised advertising" means they get ads which are more "useful" to them. I regularly see people opt in to personalised advertising because of this.
Personalised advertising is about collecting every detail about your life and using it to extract as much money as possible from you. AI advancements might be making this even more effective but it's been this way for a long time.
This is one of those places where it's worth disentangling the status quo from an optimal alternative.
Currently, every factlet you leak to one of these systems poisons them toward their profit (and almost unanimously against your best interests). Advertising draws your attention away from the products that would make your life better (cheaper, heathier, tastier, whatever) and toward profitable alternatives.
It doesn't have to be that way though. You physically don't have time to research every thing that exists, or even to hear about every possible product in passing. Supposing some of those would improve your life on average, is word-of-mouth really the most efficient way we can come up with to tell you about the things you do actually want to spend your money on? In theory, this is a great business -- customers want to spend money, companies want to sell things, and the information/discoverability asymmetry means that companies are inclined to get word of their products out there with customers _also_ wanting to hear about those products (if they're sufficiently personalized). If "advertising" were good enough, I'd pay money for it.
That only falls apart because of a lack of trust and ethical behavior. Instead of being treated like the information market it is, it's thrust onto individuals to try to prey on their weaknesses.
> It doesn't have to be that way though. You physically don't have time to research every thing that exists, or even to hear about every possible product in passing. Supposing some of those would improve your life on average, is word-of-mouth really the most efficient way we can come up with to tell you about the things you do actually want to spend your money on?
Word-of-mouth vs. paid advertisements is a false dichotomy.
Also, a friction isn't a bad thing. You don't have to "research every thing that exists, or even to hear about every possible product in passing." It's fine to pick a good enough thing from a smaller set.
> In theory, this is a great business -- customers want to spend money, companies want to sell things, and the information/discoverability asymmetry means that companies are inclined to get word of their products out there with customers _also_ wanting to hear about those products (if they're sufficiently personalized). If "advertising" were good enough, I'd pay money for it.
Advertising not a great business in theory, because it's corrupted by a fundamental conflict of interest. Without draconian regulation, it's never going to be aligned to your interests as a consumer.
A better business would be some kind of product review magazine, where they research products and write articles about them.
Personally, I favor draconian regulation. Nationalize the ad agencies. Companies submit a request to the government ad agency for an add, they write a neutral ad with a couple of photos descriptive photos of the product, its name, and a brief outline of features, and that's what gets run.
> Word-of-mouth vs. paid advertisements is a false dichotomy.
I think a lot of people confuse paid advertisements by influencers as word-of-mouth. For whatever reasoning, the concept of hired spokesperson seems to have been lost with social media influencers.
I have a mouse problem. have had it for years (like most people). If you make a better mousetrap today I want it - but I'm not researching this every year.
Where the AI makes a difference here isn't regular personalized advertisement (which already isn't all that great, based on the percentage of ads I get for products I would never consider at all, or are downright offensive to me), but in understanding your existing consumers, and attempting to do habituation effects.
So imagine you have a bunch of money, watch sports while drinking and are bad at math, and therefore are considered to be a great target for sports betting companies. Making sure you get used to betting most of the time you watch a game is very valuable for the company, so just realizing what teams you like, when they play, and what kind of bets might look good to you, but are really pretty iffy is very valuable to them. Just like they would love to know when you are bored, or depressed, and maybe betting on the game that is going on right now would be appealing: A level of access to you that, say, a casino, or a bar that you haven't visited in a while just doesn't have. And habituation models are simple, you don't need a very expensive system to know when offering you a discount to entice you to don't break a gambling streak will pay off
Now that is using AI in ways that are quite antisocial by most standards: the current advertisement that tries to sell me hair growth when I have all my hair isn't all that scary.
Yep attacking gamblers is definitely one way to use AI.
Also there are plenty of other possible ways if you have the information. Think of people going thru breakups. People with eating disorders or other forms of body dismorphia, you could throw rather horrific ads at them.
if you draw a venn diagram of all the stuff i get advertised on and all the stuff I actually buy, the two circles are in completely different locations with virtually no overlap whatsoever. the only time i get ads that are even remotely related to my purchases, are only ads that come after I've made the purchase and am done. personally, i don't see how they make any profit off me whatsoever.
Maybe you're confusing who is meant to be making the profit. The people lying to you about receiving relevant, personalized ads are telling the same lie to those buying ads. The ad company tells both sides the lie and their profits are soaring.
Those buying ads have of ways to track what works. they needed that 200 years ago already and were developing it. (Not all of course, but the big ones)
i think the whole "personalised advertising" thing is way oversold and more for the benefit of a sales pitch for the advertisers but reality is far from it. google makes their money on volume, not accuracy. and so all the "information" they collect, doesn't seem to translate into more targetted advertisement.
"It annoys me that big-tech marketing has made most people believe that "personalised advertising" means they get ads which are more "useful" to them."
"relevant" is another term seen in addition to "useful"
But "relevant" is relative
For example, "relevant" to what?
It's only if Big Tech has collected data about the ad target and, e.g., made some guess about their intent, that the ads could be "relevant"
Whether the ads are truly "relevant" is a question for the reader. The term "relevant" might just be marketing fluff
Either way, Big Tech will keep the data vacuum humming
When I bought a vacuum on Amazon, I got cross-sells for other vacuums for several weeks. I don’t know how many avid vacuum collectors Amazon studied to conclude that those were the best ads to show me (not a vacuum collector).
Some of that is those advertisers want toeget everyone. You are not a women but odds are you live with one (at some point in life) who asks you to go buy something for her.
It annoys me that there aren't laws to prevent this. Or that anti-monopoly law wasn't effectively used to separate the largest advertising company in the world from a consumer software browser product which is clearly being used to facilitate and amplify these outcomes.
I'm thoroughly annoyed that adblockers aren't installed by default and require an opt out to disable. This will not at all touch first party advertising, but, it will put a huge dent into dynamic third party advertising. Which seems to be the source of the problem you describe.
Our government is genuinely failing to represent the majority on this issue.
To be fair, if I choose to buy something, it's almost by definition because I consider the thing useful. It's pretty rare that I purchase something I'd learned about from an ad, but I have done so a few times and benefited from doing so. How is anyone else to determine whether I've been adversely manipulated, i.e. whether the cost of the thing outweighs its benefit to me?
Buying something from an ad isn't really fundamentally different from being influenced by an HN post. For example, thanks to https://news.ycombinator.com/item?id=46294574, I read up on and have decided to experiment with TLA+ on my next project. It's really no concern of mine what Martin Kleppman's commercial interests may ultimately have been in publishing that blog post; I received value from the information all the same.
Personally, I'm not particularly bothered by ads per se. I'd be more bothered by information being withheld from me during searches, e.g. if Brand A could pay Amazon to delist Brands B and C from organic search results, since that would directly guide me toward less optimal purchases. But as far as simply going about my day and seeing a billboard or promoted social media post every now and then, I don't see the big deal. It's generally easy to ignore, it costs me almost nothing, it occasionally helps me, and ultimately it funds a lot of things I like and take for granted (e.g. Chromium, Firefox, and Android).
I'm not saying that people who routinely waste money on irrational purchases don't exist. I just don't find that to be a compelling argument against the existence of a particular market which overwhelmingly benefits almost all of us.
I do have quite strong concerns regarding aggressive data collection, however, and I certainly wouldn't opt in to greater erosion of my privacy — but I see that as a separate issue. To the extent that ad-driven revenue models provide an incentive for companies to facilitate greater privacy invasion, I agree that it's a significant concern which warrants much stronger pushback from the public than it receives. I just think it's important to highlight that mass data harvesting per se is the major issue, more so than any perceived manipulativeness of the fact that brands pay money for exposure.
Then of course there's the issue raised in this post, which is yet again another matter entirely. I'm all for using AI to optimize pricing and efficiency, but "dynamic pricing" as described in the article sounds like a euphemism for price discrimination, and should be more strictly regulated IMO regardless of whether or not AI is involved.
Is it possible that most people are like you and advertisers don’t make money off you but there’s a small amount of people where advertising works and advertisers make big money off those people?
I'm sure there are some "whales" who buy a lot of things they don't need, as suggested earlier, but I also believe people are entitled to the freedom to make their own decisions even if others disagree with those decisions.
That being said, I wouldn't agree that people like me don't provide value to advertisers. Aside from the fact that I do occasionally buy things from ads:
* I also get curious and research products or product categories that I learn about from ads, which translates into increased word-of-mouth, even if I never personally have a need for the thing
* If I see a lot of high-quality and/or high-profile ads for a certain brand over time, I'll be more likely to remember it and my perception of its legitimacy will improve; if I end up ever needing that kind of thing, I'll include the brand in my research of potential options
* Even if I've already purchased the thing, higher perceived legitimacy of its vendor on my part due to advertising presence could still help increase my confidence in its likely longevity, level of support, and mainstreamness, which might potentially translate into mentioning it in certain contexts where I wouldn't have otherwise
If I had to guess, that's probably where the majority of value in advertising lies. Not pure click-through rate or direct conversion, but contribution to broader mindshare. The distinction might be meaningless from a starting point of low or zero mindshare, since the marginal value of any additional mindshare at that point will be higher and the necessary timeline to produce a financial return may be tighter, but a Fortune 500 company probably doesn't buy a TV ad spot with the expectation that a handful of shopaholics will suddenly feel compelled to buy new cars or whatever on the spot.
Personalised advertising is about collecting every detail about your life and using it to extract as much money as possible from you. AI advancements might be making this even more effective but it's been this way for a long time.