Google Growing on Fumes: Something Is Rotten in the State of Online Advertising

[marmar]

Google Growing on Fumes: Something Is Rotten in the State of Online Advertising
by Sarunas Barauskas • May 3, 2016


[font color="blue"]We’re living in the last months of the online advertising bubble.[/font]

By Sarunas Barauskas, co-founder at Kalkis Research:


A couple of months ago, I was going through Google’s newly released 10-K filing. The night before, we had had an argument with Philippe, the other co-founder of our start-up, about how ad dollars were fueling a new kind of economy. We realized we had no clue of who was making money, by what means, or how much. I just wanted to understand.

What mesmerized me were the sheer amounts of cash Google (ehm, Alphabet) was raking in: $75 billion dollars in revenue for 2015. For 2016, they’re set to generate as much as the GDPs of Lithuania, Latvia and Estonia put together. That’s six million people.

Another thing that was weird: how vague Google was about how they actually made all this money.

Their main metric, the cost per click (CPC), was a nonsensical aggregation of a wide array of user actions, from a click on an ad that could be worth as much as a few hundred dollars, to a video ad that wasn’t dismissed quick enough, an for which the advertising company would be charged a fraction of a penny.

Their SEC filings were full of statements about how Google was revolutionary and unique. They would go to extreme lengths to describe various non-essential parts of their business. But there was very little of actually useful information about the way online advertising worked. After all, it’s only the source of 90% of their revenue. .................(more)

http://wolfstreet.com/2016/05/03/google-grows-on-fumes-online-advertising-ad-exchanges-fraud-ineffective-ads/

[tanyev]

1. They did this one weird trick....

[cyberswede]

3. !

[marmar]

4. ....

[MisterP]

5. doctors hate them!

[Sherman A1]

2. Interesting

thanks for posting.

[Odin2005]

6. Mix this in with the current "social media" bubble...

...and I think we are about to see another Y2K-style tech crash. I remember seeing an info graphic showing the number of start-up tech companies centered around managing other companies "social media presence" increasing at an unsustainable rate in the last 3 years, going from dozens to thousands.

[Initech]

7. And they're fighting back by declaring war on ad blockers.

Adchoices, Taboola, and Outbrain, and everything else that provides click bait garbage can have my ad blocker when they pry it from my cold dead hands.

[Hortensis]

8. Google has had pinned "Hillary should concede to Sanders"

articles to the top of any search screen pulled up by "Bernie" "concede" for at least the last 2 days that I know of. The current article is that she needs to concede "before the FBI reveals its findings." The rest of the top half of the screen is also "Hillary needs to concede" sites.

How much does Google charge for this? And why would this corporate behemoth agree to assist the Corporate Right by having our searches pull up anti-Democrat propaganda?

[Katashi_itto]

9. Bwahahahah! The irony is thick with this one.

[Eleanors38]

12. Are you saying Google is Gooper???

[bemildred]

10. Bigger isn't always (or even usually) better. nt

[Eleanors38]

11. Sounds like .com all over again.