from Hacker News

After GDPR, The New York Times cut off ad exchanges and kept growing ad revenue

by chrisxcross on 1/16/19, 12:00 PM with 452 comments

• by bitofhope on 1/16/19, 1:03 PM

  I honestly would not be surprised if the difference in effectiveness of targeted vs untargeted advertisement turns out to be none, negligible or even unfavorable to targeted. Sure, NYT is not enough data to be significant, especially when compensating for my confirmation bias, but I would really like to see more sites stop tracking, at least from an ethical standpoint.

• by pjc50 on 1/16/19, 12:57 PM

  This is the thing the ad industry really didn't want people to discover: what if the behavioural and personalised targeting wasn't actually worth the cost?

• by blakesterz on 1/16/19, 12:51 PM

  “The fact that we are no longer offering behavioral targeting options in Europe does not seem to be in the way of what advertisers want to do with us,” he said. “The desirability of a brand may be stronger than the targeting capabilities. We have not been impacted from a revenue standpoint, and, on the contrary, our digital advertising business continues to grow nicely.”

  I wonder if smaller sites could do the same thing or this is only working so well because they're the NYT?

• by bunderbunder on 1/16/19, 3:55 PM

  Wild speculation: What if cutting off the ad exchanges was a dose of quinine for the New York Times?

  NYT is a premium venue for people who want to advertise, because its regular readers (especially the ones who don't live in New York) tend to have above-average disposable income. Because of that, the NYT should be able to charge a premium for advertising with them.

  But if they opt into the ad exchanges, then they've given ad exchanges a signal they can use to more easily track who is a regular NYT reader. Advertisers could use that to target NYT readers without ever actually advertising on the NYT's website - they can follow them somewhere cheaper, and advertise there instead.

• by Nasrudith on 1/16/19, 3:07 PM

  I have long been bothered by the superficiality of advertising. At this point I have gotten the impression that much of advertising is the art of fooling oneselves first about the source of success and then fooling others. As long as there is a success and they are advertising it is stop self reflection and claim victory.

  Annoy persistent customers with ads? It means it is driving retention and not that they had to get milk and knew you were an immediate better option than the alternatives.

  Not receive as many sales during a recession when people cut back and you are forced to cut back on ads? Cutting ads brought this and not!

  Clearly it has some impact given the derth of businesses without any but it is so entangled that it stinks of being driven by self-serving superstition more than concrete impacts. I would guess abstractly modeling awareness and desirability as separate concepts for one. No matter how much you advertise people will not want an air freshener that dispenses Ebola in their living room.

  I know my own biases towards an annoying outgroup, that I am not equipped to derive a more logically rigorous and complete proof (let alone actionable and doing adequate in the field never mind better) but it feels as if the whole field should use way more mathematical rigor and self reflection.

• by skilled on 1/16/19, 1:46 PM

  I can't be the only one who thinks behavioral targeting is a bit creepy?

  This has happened to me at least 3-4 times in the last 2 years: I go to a supermarket or a store that I have never been to, I do shopping and come back home. After a few hours, I pick up my phone to check Email/Facebook, only to find myself staring at an advert for a product that's sitting in my fridge.

  I mean, come on... The first time this happened I thought it was a funny coincidence, but it has happened with products that I did not bring home either. I can't be the only one?

  And this is my point precisely as to why behavioral ads suck. They make you realize just how much companies are spying on you and using your data to feed you crap. Would I really want to have any part in this kind of an endeavor? Let's be real here.

• by cm2012 on 1/16/19, 3:40 PM

  It's amazing how so many people who no knowledge of online advertising post so confidently in these threads. Since I have a lot of experience with targeted ads, it makes me trust the comments on topics I'm not an expert on less.

• by c3534l on 1/17/19, 2:43 AM

  I'm no advertising expert, but I have seen a number of stories over the years of companies being disillusioned by the promise of targeted ads. One common thread I've noticed is that most people don't have a targeted product and a targeted message. Most products generally have broad appeal and a lot of ad campaigns work by changing the general perception of a product.

  Advertising in the New York Times in general is already targeted in some fashion (you know the basic demographic of New York Times readers), and if you want to advertise laundry detergent there's not a lot to gain from knowing a person's exact age and the gender of all his siblings siblings and the top keyword searches he made on Pornhub. Logically speaking, it seems for targeted advertising to be worth it, you'd need an unusually high response to advertising among a very narrow selection of people who can be identified as such, and that these people don't have an obvious place where they can be found.

  In the case of the New York Times, that means you have a product whose message is going to be wasted on the majority of the population; who can only be communicated with through a general interest publisher like the New York Times, but not a website or conference dedicated to that thing; but who can none the less be easily identified through invasive and secretive tracking data, but not through what news stories they're viewing; who will be very responsive to advertising (so not people who are domain experts in a particular hobby or career and will choose a product by intentionally seeking information on that product and rationally weigh their alternatives); and who are a large enough group that it's even worth putting together an advertising campaign.

  And how responsive are people to ads even on a base level anyway? Award-winning campaigns like "You Got Milk" had massive impact on culture and awareness, but didn't drive sales.

  With so many hurdles, targeted advertising seems like something that provides only marginal and diminishing returns. Newspapers seem like just about the worst place to benefit from violating user privacy. It's like trying to sell Linux dev ops software by asking a top 40 radio station to play ads for it after specific songs.

• by buboard on 1/16/19, 1:12 PM

  They are dancing around the issue avoiding to state the revenue that they had from EU targeted advertising. This is NYtimes, they attract american advertising and are primarily targeted at americans. They don't even rely on advertising anymore, they have subscribers. Their story is not very telling for everyone else. Anecdotally, since switching to contextual ads in may my adsense revenue has fallen by ~50% : https://i.imgur.com/Ec5LwZg.jpg

• by jillesvangurp on 1/16/19, 8:28 PM

  This does not surprise me. A few things that I know about the ad business:

  - There are a lot of players in the market

  - Most of them oversell their ability to actually target effectively; I actually know some sales people in this space. Bla bla, machine learning, bla bla bla algorithms, bla bla bla smoke and mirrors.

  - Especially the smaller players tend to not have usable profiles on the vast majority of users for reasons of not having existed long enough or not having enough customers to have actually captured enough relevant data.

  - Any new ad company has to fake it for quite some time until they actually have enough data. And with GDPR, that data is now a lot harder to come by legally.

  - Some of ad companies are fraudulent in the sense that they overcharge their customers for clicks that never happened. E.g. bot traffic is a big revenue driver for ad providers and most of them conveniently can't tell the difference between a bot and a user they supposedly profiled.

  So, what just happened is that the NYT cut off most of the worst offenders in this space and ended up with better quality ad providers with better conversions (even without profiling).

  Profiling is actually only needed if you have lots of ads competing for the same space. If you reduce the number of ads, the need for profiling goes away. Also, you compensate for bad profiling this way since more (random) people will see your ad. So previously under-performing ads might actually benefit from being shown to random people as opposed to some silly algorithm that uses bad/incomplete profile data to take the wrong decisions.

  So what the NYT figured out is that they are better served by a small number of high value ads shown to random people than a great many low quality ads from low quality providers targeted to a handful of their users.

  Targeting still has a place in this market but it needs to be consensual; which is going to be a tough sell to end users.

• by arendtio on 1/16/19, 3:51 PM

  What I found most interesting about the 'block Europe' movement among news sites: If the news sites favor their own revenue over the peoples right for privacy, what are my expectations towards the information they serve?

  I mean, if most news sites are getting their biggest revenue via online targeting, who am I expecting to report abusive behavior among ad networks?

• by pacbard on 1/16/19, 1:01 PM

  The likely process at play here is cutting out the middle man from ad placement.

  Before GDPR, a company would have likely contacted an ad agency to target the population that reads the NYT. Ads would then be sold to a pool of websites that included the NYT. After GDPR, this is no longer possible as the individual websites have stopped sharing targeting information with the ad agency. The only solution available to the same company is then to buy directly from the NYT (and maybe a few other big websites) rather than “syndicate” the ads through the agency.

  It would be interesting to know how ad placements changed pre/post GDPR and how the ad revenue distribution shifted across different websites.

• by tuacker on 1/16/19, 3:02 PM

  Reading this makes me happy as I'm currently working on a service [0] (not available yet) to allow sites to do this. The goal is to facilitate and make ad selling/scheduling easy while having websites/etc. serve the ads themselves, ensuring no tracking (by my service) is possible.

  A lot of people are already doing direct sales via mail and then work out a way to get paid somehow, which can be cumbersome. Hoping to make that easier, while also improving the bad, intrusive behaviour around ads.

  [0] https://www.adsfromsource.com

• by nekopa on 1/16/19, 6:41 PM

  I toyed around for awhile with an idea I called Gadfly. Basically it's an idea for complete opt in advertising. It would have a dashboard for setting up what ads I want to see. So I could put in friends birthdays, things they like, and around that time get relevant ads of things to buy that they may like. Or I could say that I need a new laptop, and while I browse see relevant ads for what I want. I was hoping to make ads work for me, as I do understand 1 big reason for marketing, letting me know things that I want are available.

• by tomrod on 1/16/19, 2:18 PM

  This is not terribly surprising. Ad exchanges work because network effects allow for improving small content providers increased effectiveness in selling their space. If you are a large content producer you have enough people seeking to advertise.

  However, I have concerns about the economic efficiency (broadly speaking), as well as the dynamic optimality of advertising (though, admittedly, this is a second order concern to me!).

• by Tade0 on 1/16/19, 1:52 PM

  Here's an interesting 2nd order effect:

  I switched off most of the stuff I could after GDPR went into force, so at first glance it seemed that I started getting trash.

  That was until I saw a banner with a unappealing gray background with a fragment of a poem.

  It was an ad. For a poem. This one specifically: https://thelastwhy.ca/poems/2009/7/12/age-of-asininity.html?...

  No way in hell I would discover such a thing had my ads been targeted and personalised, since those usually are reactive, so they show e.g. stuff you recently bought(meaning: been searching for recently).

• by ComputerGuru on 1/16/19, 7:54 PM

  *in Europe. American readers, it seems, are still subject to targeted advertising.

• by the_watcher on 1/16/19, 7:03 PM

  Isn't this an example of regulations helping established players? Sure, the NYT is able to direct sell ads, but an upstart publisher can't. That doesn't necessarily mean that GDPR's pros don't outweigh the cons, but "The New York Times can direct sell ads" isn't exactly evidence of "Anyone can avoid GDPR having an impact on ad revenue"

• by jgalt212 on 1/17/19, 12:35 AM

  For premium publishers such as the NY Times, I'm not surprised there isn't a drop off in revenue when targeted ads were dropped.

  They are pretty much all high value visitors (from an economic perspective).

• by eli on 1/16/19, 2:16 PM

  Building a quality brand with a quality audience and finding advertisers who believe in you generates more revenue than participating in an exchange that treats ad impressions as a commodity. Go figure.

• by pornel on 1/16/19, 3:57 PM

  Why would any premium website even agree to ads that track users? Exchanges can tag NYT's customers, and then sell the same audience, but on other, cheaper properties.

• by porpoisely on 1/16/19, 5:59 PM

  Ad revenue is growing because the economy ( both in the US and europe ) has been improving, Trump news boost and because the NYTimes/et al has strong-armed tech companies into giving them preferential treatment. The NYTimes and other large news companies have been taking market share from smaller companies like Vox as they push tech companies to drive traffic to themselves over smaller players. Whether it is a temporary bump or has legs, we will have to see. Not sure what GDPR has to do with anything since the ad revenues had been growing before GDPR.

• by manigandham on 1/16/19, 2:13 PM

  I work in adtech. This has nothing to do with how effective targeting is, and a single site does not reflect the entire industry when they're all competing for the same pool of ad dollars.

  There is a massive drop in EU programmatic advertising because of GDPR. Most EU advertisers now buy a few large campaigns with coarse targeting instead, and sites with the biggest reach like NYT will get more money but there's less money in the overall market.

  This is another case of regulation benefiting the bigger players (advertisers and publishers). EDIT: curious what downvotes are disagreeing with here.

• by soufron on 1/16/19, 3:15 PM

  « It’s the eeeend of the woooorld »

• by StreamBright on 1/16/19, 6:14 PM

  With other words GDPR does not make ad based companies less profitable. Amazing, thank you EU!

• by paulie_a on 1/16/19, 2:17 PM

  Why is the New York times...key words being New York even paying any attention to the GDPR?

  I don't get why so many US based websites are concerned about an EU law.

• by dmitriid on 1/16/19, 1:13 PM

  Typical modern-day “journalism”.

  “A scramble to implement GDPR, last-minute scramble to inplement GDPR when it arrived in May” vs “it won’t be a scramble in the US, as companies will have until 2020 to prepare”.

  These companies similarly had two years to prepare. And I’m glad they took the hit for not doing so. I’m also glad they’re discovering that selling private info left and right isn’t the only way to earn money with ads.

• by mlthoughts2018 on 1/16/19, 3:24 PM

  Meanwhile, NYT experiments with predicting readers’ emotional state and using that information to target ad placement...

  https://digiday.com/media/project-feels-usa-today-espn-new-y...

  NYT is deeply hypocritical when it comes to digital advertising.