14 ms·

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

572 points by chrisxcross 8y ago

blakesterz 8y ago
“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?
- JumpCrisscross 8y ago
  The Times has a large readership and potential ad draw in the E.U. Regulations would have to be ridiculous to make it unprofitable for the Times to abandon Europe. The Los Angeles Times, on the other hand, has few European users. The fixed cost of re-tooling (or, if already in compliance, even just accepting the regulatory risk) would be difficult to justify relative to other potential investments.
  - akie 8y ago
    It's either a one-time investment, or a permanent loss of a (perhaps small) part of your users. Perhaps it doesn't make sense for the LA Times, but I'm wondering how large the investment really is and whether or not it would start getting worth it if you look at (say) 3 or 5 year periods.
    - JumpCrisscross 8y ago
      > whether or not it would start getting worth it if you look at (say) 3 or 5 year periods It's a market targeting and opportunity cost question. Yes, many of Apple's consumers are probably high-priced wine consumers. And yes, winemaking is a profitable business. That doesn't mean, however, that Apple serves its interests by expanding into wine. It's promising, though, that we now have data showing psychotic targeting practices are unnecessary. Perhaps, even inefficient.
      - sah2ed 8y ago
        > It's promising, though, that we now have data showing [psychotic] targeting practices are unnecessary. Perhaps, even inefficient. Perhaps you meant psychographic?
- nopriorarrests 8y ago
  It's absolutely working so well because they are NYT. They can get sweet "branding" dollars from advertisers, and with branding nobody cares about return on money spent. Smaller sites have zero chance to strike a deal with large agencies who are serving large brands. So their only chance to increase ad revenue is to offer targeting, to improve viewability (aka put banners on top), and to hope that they will get enough of retargeting dollars. EDIT: and once you think of it, people from Europe who are reading NYT is targeting option in itself. Most probably they are affluent, english-speaking, etc. If you are large luxury brand, this is all you need.
  - apexalpha 8y ago
    This comment makes no sense to me. First of all: do you have any source for your first statement that "It's absolutely working so well because they are NYT" other than your gut feeling? Just because other sites are smaller doesn't mean they can't do it or work together. Smaller sites now also don't do targeted advertising; they just hire Google or any other ad network for that. They could do the same with non-targeted ads. About your edit: Yes, this is literally how advertising has always worked; you 'target' an entire audience, not an individual. Same for newspapers (on paper), TV, magazines, books, billboards in certain area's...
    - nopriorarrests 8y ago
      >do you have any source for your first statement that "It's absolutely working so well because they are NYT" other than your gut feeling? 6 year experience working in ad-tech on different projects. >Just because other sites are smaller doesn't mean they can't do it or work together. Well, try to get a slice of Procter&Gamble or Volkswagen ad budget being a small guy and not having any targeting. > they just hire Google or any other ad network for that. They could do the same with non-targeted ads. This is not how it works. If you are a small site, you set a google or any other ad network tag on your site -- right. After that, when someone visits your site, you initiate a call to these ad networks with user cookie. If this user is identified as known (say, male, 25-35 y.o., NY, was interested in Hi-Fi equipment) some advertiser may pay a lot to show an ad to this guy. 5$ CPM is not uncommon, and you may even get $10-20 from time to time. If this user is totally anonymous and there are no advertisers interested in him, good luck getting even $0.5 CPM. Most probably impression will go unmonetized. >About your edit: Yes, this is literally how advertising has always worked; you 'target' an entire audience, not an individual. nope. in case of retargeting or even modern prospecting you do target individual, just as in example above. If good portion of your audience is known to DMP's (Data Management Platform, basically tracking silos, google "Salesforce DMP" for example) and other ad-tech players, you will easily get x5 return on showing ads to them, as compared to anonymous users, all other things equal. And this is how you make money being a small publisher on the internet these days.
- kijin 8y ago
  If nobody can legally do behavioral targeting in Europe, it levels the playing field. That's the whole point of government regulation. Everyone will be forced to run good ol' untargeted ads. Meanwhile, companies still have their advertising budgets; they'll just have to spend money on untargeted ads. It takes time to measure the relative effectiveness of different types of ad campaigns, so it will take a while for the market to adjust.
  - Mirioron 8y ago
    >If nobody can legally do behavioral targeting in Europe, it levels the playing field. No, it doesn't. All it means is that Europe will become even less relevant in tech than we already are. Just because European companies can't do behavioral targeting doesn't mean companies outside of the EU can't do that and the EU has no jurisdiction over them, if they can even find out that this is going on in the first place. All it will mean that European tech companies get out-competed. Another thing you're not considering is that the EU has 30+ languages in it. I'm sure it will be great to see advertising in languages you can't even read. That will drive home the point that only France and Germany matter even more. >Meanwhile, companies still have their advertising budgets; they'll just have to spend money on untargeted ads. Advertising budgets don't exist in a vacuum. Their size depends on how much money they can make based on those ads. If it costs more to advertise than it brings in as sales then you just don't advertise. If targeted ads aren't a necessity then neither are online advertisements.
    - kijin 8y ago
      Contextual targeting still works. No ad agency in their right mind will run a French ad on a webpage written in German, or show an Italian ad in an app where the default language is set to Swedish. None of this requires tracking individual users across websites and apps. Besides, as other commenters have pointed out, there is no concrete evidence that targeting individual users is any better (in terms of bringing in more sales) than targeting the combination of region, language, website topic, and on-page keywords. If you're so worried about the sustainability of European ad agencies, maybe you should stop fearmongering and start trying to improve contextual targeting technology to such an extent that it provides even more value to your customers than behaviorally targeted alternatives. If and when GDPR-like regulations arrive in other parts of the world -- I'm pretty sure the noose is getting tighter in the U.S. as well -- your European agency will be in a perfect position to grab market share there.
- mharroun 8y ago
  It's all about the brand, ad tech firms are even willing to take losses to acquire big publishers so that they are more attractive to advertisers.
pjc50 8y ago
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?
- cyborgx7 8y ago
  I hope that whole industry just dies and the hordes of wasted software engineers can instead be used on something that actually adds value to society.
  - BoorishBears 8y ago
    And all the other software developers working on things directly and indirectly funded by that industry should what? Take up knitting?
    - 131012 8y ago
      I suggest they keep coding, but useful stuff and stop the wasteful surveillance.
      - Kye 8y ago
        Startup idea: AdRev for knitting patterns.
    - Kye 8y ago
      They can do what people put out of work by new technology created by those same coders do. And knitting. Nothing wrong with knitting.
    - cyborgx7 8y ago
      If you already acknowledge that it's just a bullshit job because people need to make money to live, maybe they could do something that is not actively harmful.
      - BoorishBears 8y ago
pacbard 8y ago
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.
- kijin 8y ago
  Cutting out the middlemen and their asinine trackers might also help reduce the number of third-party scripts and random HTTP requests on the page. This will make the page load faster, especially on mobile. Which is known to help increase revenue.
  - mschuster91 8y ago
    > This will make the page load faster, especially on mobile. Which is known to help increase revenue. Most ad loaders actually run async these days, cutting out middlemen/trackers doesn't help you for time-to-first-readable-content. Biggest culprit there are expensive assets like dozens of different fonts/variation combos, pre-roll video ads and uncompressed images.
    - kijin 8y ago
      Ad-infested pages often feel sluggish even after all the readable content has loaded. It feels like the page hasn't finished loading yet. After all, it takes CPU, RAM, and bandwidth to run scripts and load images in the background. The difference is especially noticeable on mobile, and it's even worse when the scripts trigger redraws or mess with the scrolling.
bitofhope 8y ago
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.
- buboard 8y ago
  most of the big websites can afford to stop tracking. The problem is that smaller / weird niche websites can't , and gdpr is disproportionally hurting them.
  - hjanssen 8y ago
    Which is a non-argument if it turns out that tracking doesnt contribute to higher ad revenue
  - cribbles 8y ago
    Source for this claim?
    - buboard 8y ago
      https://digiday.com/media/impact-gdpr-5-charts/ https://digiday.com/media/impact-gdpr-5-charts/ https://voxeu.org/article/short-run-effects-gdpr-technology-venture-investment https://voxeu.org/article/short-run-effects-gdpr-technology-...
      - vertexFarm 8y ago
        Some of this shows it's hurting smaller adtech companies (read: advertisers who aren't google, facebook, amazon) but nothing here really shows it's hurting smaller site's revenue in general. There's some speculative stuff like how investors are reacting.
  - detaro 8y ago
buboard 8y ago
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 https://i.imgur.com/Ec5LwZg.jpg
dmitriid 8y ago
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.
skilled 8y ago
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.
- SmellyGeekBoy 8y ago
  I bought a Casper mattress around a year ago and the websites I visit are still full of ads for mattresses. How many mattresses do they think I need, anyway!?
  - wlesieutre 8y ago
    Funny you mention them, because I've only ever heard of Casper in podcasts, one of the few remaining non-targeted digital ad slots. Unless "listens to X podcast" counts as targeting, but that's no different from "reads X magazine" in offline media. No creepy tracking required.
    - tivert 8y ago
      > Unless "listens to X podcast" counts as targeting It doesn't, except to the adtech targeters who want to muddy the water. Ad targeting in this context means individualized targeting based on individualize tracking and data collection, full stop.
  - soared 8y ago
    If you click the blue triangle in the corner of an ad you can usually block an advertiser or choose to stop seeing it.
Tade0 8y ago
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?gclid=EAIaIQobChMI18aJkubq3wIVCQvgCh3UeQIdEAEYASAAEgLJ0PD_BwE 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).
manigandham 8y ago
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.
- thatguyagain 8y ago
  I don't understand. What stands in the way of a small niche website for, say, dog owners to sell ad space for dog related products without having some kind of data hoarding ad tech behind it?
  - manigandham 8y ago
    Because advertisers don't want to deal with a bunch of smaller sites. That's why ad networks and exchanges exist, so you can buy a single impression for the right user wherever they are across the web. Take away the fine-grained targeting and you end up with big blind campaigns running on a few large sites with the biggest reach. This is the way TV and radio work, wasteful and expensive but great for the channels that get them.
    - mook 8y ago
      Why can't middlemen still exist, just without the individual targeting? Can't sites still self-report their categories (so that, say, a dog grooming site would say they should get dog ads)?
      - manigandham 8y ago
        They can and they do, that's what ad networks are. There are plenty of ways to group sites by category and readership without individual targeting but middlemen add percentage costs to the ad spend which the industry has been slowly pushing out. The bigger issue is that fine-grained targeting is still wanted so if you remove 3rd-party tracking then advertisers will go towards the biggest sites that can supply it via their own 1st-party tracking. Even then it's still hard to work with many vendors so even more of the money is now going to Google and Facebook who can just do it all with better data than anyone else.
eli 8y ago
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.
paulie_a 8y ago
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.
- mschuster91 8y ago
  > I don't get why so many US based websites are concerned about an EU law. Given that they likely have paying EU customers for subscription, they operate in the EU area. Which means they can be subjected to GDPR. Enforcement would be difficult, of course, but not impossible (think of seizing credit-card payments or bank transfers for sales proceedings of printed NYT in Europe). And GDPR violation fines can be massive.
tomrod 8y ago
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!).
cm2012 8y ago
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.
- deleted 8y ago
  [deleted]
- Reedx 8y ago
  > people who no knowledge ... post so confidently The Dunning–Kruger effect at work. > 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. That's like when you see a news report about something you're a domain expert on. You notice the mistakes and are left to wonder how often that happens with all the areas you're not an expert on...
  - rjf72 8y ago
    I think there's a secondary effect going on in social media comments (including this site). The mostly anonymous nature of things means that people have no ability to understand who they're talking to or their qualifications to speak on a subject. So they take cues from language itself. When things are posted without exuding confidence, people assume ineptitude or uncertainty and rarely regard it as meaningful. By contrast things posted confidently instill trust and confidence and thus are treated as more meaningful. You can trial this pretty easily by just creating multiple accounts and consciously changing the tone of the comments you make. It's pretty amusing! Online comment voting systems are extremely easy to game because of basic recurring phenomena like this, that you'll find many people come to exploit whether consciously or not. And thanks to those little arrows by our names, those comments that game the system end up near the top. And finally you also have to keep in mind the You and I that actually chat instead of lurk are outliers, a surprisingly small percent of all people on the site. So you get twisted and likely counter-productive conversational cues driving conversations between a likely biased sample of (not necessarily positive) outliers. And finally now add in the countless biased interests (corporate and political in particular) with presences working to steer perception to their benefit. Nonetheless, I still find it entertaining watching how all the parts play together.
tuacker 8y ago
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 https://www.adsfromsource.com
Nasrudith 8y ago
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.
soufron 8y ago
« It’s the eeeend of the woooorld »
mlthoughts2018 8y ago
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-york-times-targeting-ads-mood/ https://digiday.com/media/project-feels-usa-today-espn-new-y... NYT is deeply hypocritical when it comes to digital advertising.
- em3rgent0rdr 8y ago
  Yup. uBlock Origin blocks 20 requests, and PrivacyBadger blocks another 7 requests...I wouldn't visit nytimes.com without those installed.
smelbe 8y ago
How is possible this? Do they use the Postcards? https://designmodo.com/postcards/ https://designmodo.com/postcards/
arendtio 8y ago
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?
- Kalium 8y ago
  You're right! News outlets consistently choosing to favor their own revenues over a basic human right to private is very surprising. Perhaps they made a choice that looks the same from the outside, but could perhaps be very different from the inside? GDPR implementation is rarely as cheap, straightforward, or easy as some of its adherents might have you think. It can be a large, difficult, expensive undertaking. It may be worth bearing in mind that not every journalistic outlet has a sizable, disciplined, competent technical organization or the financial wherewithal to acquire one rapidly. These days, running a newspaper is famously a poor business. Might it be possible that organizations, faced with a choice between an easy way to cut some costs and a potentially non-trivial investment for marginal return, might in some circumstances opt for the former? Again, you're absolutely right that this looks like a crass choice between naked greed and basic human rights. It's just possible that it might be more.
bunderbunder 8y ago
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.
- soared 8y ago
  I'm not clear how that would work. How does NYT enabling ad exchanges enable advertisers to target NYT readers or the NYT website?
  - plausibilities 8y ago
    JS injection into display ads, which happens a lot more often than you would think when it comes to ad display network content.
    - soared 8y ago
      Yeah, no it doesn't. I ran supply side programmatic for years and run buy side now. That is not true.
      - manigandham 8y ago
        What isn't true? That JS is everywhere in ads?
      - reilly3000 8y ago
        So mobile redirects just happen because of magick?
  - tivert 8y ago
pornel 8y ago
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.
deleted 8y ago
[deleted]
porpoisely 8y ago
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.
StreamBright 8y ago
With other words GDPR does not make ad based companies less profitable. Amazing, thank you EU!
nekopa 8y ago
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.
- IshKebab 8y ago
  While that idea would never work (who is going to bother with that faff rather than just googling laptops?) it does also show why Google can make so much money from ads.
the_watcher 8y ago
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"
ComputerGuru 8y ago
*in Europe. American readers, it seems, are still subject to targeted advertising.
jillesvangurp 8y ago
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.
golemiprague 8y ago
I don't think I have ever seen an ad and clicked on it in order to get something. For the NY Times a lot of the ads are just for branding and they pay per views, not click throughs or acquisitions, so need to factor this into the results. Other websites with different size and recognition might need different kind of advertising where personal data is more important.
jgalt212 8y ago
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).
c3534l 8y ago
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.

572 points by chrisxcross 8y ago

“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?

JumpCrisscross 8y ago
The Times has a large readership and potential ad draw in the E.U. Regulations would have to be ridiculous to make it unprofitable for the Times to abandon Europe. The Los Angeles Times, on the other hand, has few European users. The fixed cost of re-tooling (or, if already in compliance, even just accepting the regulatory risk) would be difficult to justify relative to other potential investments.
- akie 8y ago
  It's either a one-time investment, or a permanent loss of a (perhaps small) part of your users. Perhaps it doesn't make sense for the LA Times, but I'm wondering how large the investment really is and whether or not it would start getting worth it if you look at (say) 3 or 5 year periods.
  - JumpCrisscross 8y ago
    > whether or not it would start getting worth it if you look at (say) 3 or 5 year periods It's a market targeting and opportunity cost question. Yes, many of Apple's consumers are probably high-priced wine consumers. And yes, winemaking is a profitable business. That doesn't mean, however, that Apple serves its interests by expanding into wine. It's promising, though, that we now have data showing psychotic targeting practices are unnecessary. Perhaps, even inefficient.
    - sah2ed 8y ago
      > It's promising, though, that we now have data showing [psychotic] targeting practices are unnecessary. Perhaps, even inefficient. Perhaps you meant psychographic?
nopriorarrests 8y ago
It's absolutely working so well because they are NYT. They can get sweet "branding" dollars from advertisers, and with branding nobody cares about return on money spent. Smaller sites have zero chance to strike a deal with large agencies who are serving large brands. So their only chance to increase ad revenue is to offer targeting, to improve viewability (aka put banners on top), and to hope that they will get enough of retargeting dollars. EDIT: and once you think of it, people from Europe who are reading NYT is targeting option in itself. Most probably they are affluent, english-speaking, etc. If you are large luxury brand, this is all you need.
- apexalpha 8y ago
  This comment makes no sense to me. First of all: do you have any source for your first statement that "It's absolutely working so well because they are NYT" other than your gut feeling? Just because other sites are smaller doesn't mean they can't do it or work together. Smaller sites now also don't do targeted advertising; they just hire Google or any other ad network for that. They could do the same with non-targeted ads. About your edit: Yes, this is literally how advertising has always worked; you 'target' an entire audience, not an individual. Same for newspapers (on paper), TV, magazines, books, billboards in certain area's...
  - nopriorarrests 8y ago
    >do you have any source for your first statement that "It's absolutely working so well because they are NYT" other than your gut feeling? 6 year experience working in ad-tech on different projects. >Just because other sites are smaller doesn't mean they can't do it or work together. Well, try to get a slice of Procter&Gamble or Volkswagen ad budget being a small guy and not having any targeting. > they just hire Google or any other ad network for that. They could do the same with non-targeted ads. This is not how it works. If you are a small site, you set a google or any other ad network tag on your site -- right. After that, when someone visits your site, you initiate a call to these ad networks with user cookie. If this user is identified as known (say, male, 25-35 y.o., NY, was interested in Hi-Fi equipment) some advertiser may pay a lot to show an ad to this guy. 5$ CPM is not uncommon, and you may even get $10-20 from time to time. If this user is totally anonymous and there are no advertisers interested in him, good luck getting even $0.5 CPM. Most probably impression will go unmonetized. >About your edit: Yes, this is literally how advertising has always worked; you 'target' an entire audience, not an individual. nope. in case of retargeting or even modern prospecting you do target individual, just as in example above. If good portion of your audience is known to DMP's (Data Management Platform, basically tracking silos, google "Salesforce DMP" for example) and other ad-tech players, you will easily get x5 return on showing ads to them, as compared to anonymous users, all other things equal. And this is how you make money being a small publisher on the internet these days.
kijin 8y ago
If nobody can legally do behavioral targeting in Europe, it levels the playing field. That's the whole point of government regulation. Everyone will be forced to run good ol' untargeted ads. Meanwhile, companies still have their advertising budgets; they'll just have to spend money on untargeted ads. It takes time to measure the relative effectiveness of different types of ad campaigns, so it will take a while for the market to adjust.
- Mirioron 8y ago
  >If nobody can legally do behavioral targeting in Europe, it levels the playing field. No, it doesn't. All it means is that Europe will become even less relevant in tech than we already are. Just because European companies can't do behavioral targeting doesn't mean companies outside of the EU can't do that and the EU has no jurisdiction over them, if they can even find out that this is going on in the first place. All it will mean that European tech companies get out-competed. Another thing you're not considering is that the EU has 30+ languages in it. I'm sure it will be great to see advertising in languages you can't even read. That will drive home the point that only France and Germany matter even more. >Meanwhile, companies still have their advertising budgets; they'll just have to spend money on untargeted ads. Advertising budgets don't exist in a vacuum. Their size depends on how much money they can make based on those ads. If it costs more to advertise than it brings in as sales then you just don't advertise. If targeted ads aren't a necessity then neither are online advertisements.
  - kijin 8y ago
    Contextual targeting still works. No ad agency in their right mind will run a French ad on a webpage written in German, or show an Italian ad in an app where the default language is set to Swedish. None of this requires tracking individual users across websites and apps. Besides, as other commenters have pointed out, there is no concrete evidence that targeting individual users is any better (in terms of bringing in more sales) than targeting the combination of region, language, website topic, and on-page keywords. If you're so worried about the sustainability of European ad agencies, maybe you should stop fearmongering and start trying to improve contextual targeting technology to such an extent that it provides even more value to your customers than behaviorally targeted alternatives. If and when GDPR-like regulations arrive in other parts of the world -- I'm pretty sure the noose is getting tighter in the U.S. as well -- your European agency will be in a perfect position to grab market share there.
mharroun 8y ago
It's all about the brand, ad tech firms are even willing to take losses to acquire big publishers so that they are more attractive to advertisers.

pjc50 8y ago

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?

cyborgx7 8y ago
I hope that whole industry just dies and the hordes of wasted software engineers can instead be used on something that actually adds value to society.
- BoorishBears 8y ago
  And all the other software developers working on things directly and indirectly funded by that industry should what? Take up knitting?
  - 131012 8y ago
    I suggest they keep coding, but useful stuff and stop the wasteful surveillance.
    - Kye 8y ago
      Startup idea: AdRev for knitting patterns.
  - Kye 8y ago
    They can do what people put out of work by new technology created by those same coders do. And knitting. Nothing wrong with knitting.
  - cyborgx7 8y ago
    If you already acknowledge that it's just a bullshit job because people need to make money to live, maybe they could do something that is not actively harmful.
    - BoorishBears 8y ago

pacbard 8y ago

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.

kijin 8y ago
Cutting out the middlemen and their asinine trackers might also help reduce the number of third-party scripts and random HTTP requests on the page. This will make the page load faster, especially on mobile. Which is known to help increase revenue.
- mschuster91 8y ago
  > This will make the page load faster, especially on mobile. Which is known to help increase revenue. Most ad loaders actually run async these days, cutting out middlemen/trackers doesn't help you for time-to-first-readable-content. Biggest culprit there are expensive assets like dozens of different fonts/variation combos, pre-roll video ads and uncompressed images.
  - kijin 8y ago
    Ad-infested pages often feel sluggish even after all the readable content has loaded. It feels like the page hasn't finished loading yet. After all, it takes CPU, RAM, and bandwidth to run scripts and load images in the background. The difference is especially noticeable on mobile, and it's even worse when the scripts trigger redraws or mess with the scrolling.

bitofhope 8y ago

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.

buboard 8y ago
most of the big websites can afford to stop tracking. The problem is that smaller / weird niche websites can't , and gdpr is disproportionally hurting them.
- hjanssen 8y ago
  Which is a non-argument if it turns out that tracking doesnt contribute to higher ad revenue
- cribbles 8y ago
  Source for this claim?
  - buboard 8y ago
    https://digiday.com/media/impact-gdpr-5-charts/ https://digiday.com/media/impact-gdpr-5-charts/ https://voxeu.org/article/short-run-effects-gdpr-technology-venture-investment https://voxeu.org/article/short-run-effects-gdpr-technology-...
    - vertexFarm 8y ago
      Some of this shows it's hurting smaller adtech companies (read: advertisers who aren't google, facebook, amazon) but nothing here really shows it's hurting smaller site's revenue in general. There's some speculative stuff like how investors are reacting.
- detaro 8y ago

buboard 8y ago

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 https://i.imgur.com/Ec5LwZg.jpg

dmitriid 8y ago

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.

skilled 8y ago

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.

SmellyGeekBoy 8y ago
I bought a Casper mattress around a year ago and the websites I visit are still full of ads for mattresses. How many mattresses do they think I need, anyway!?
- wlesieutre 8y ago
  Funny you mention them, because I've only ever heard of Casper in podcasts, one of the few remaining non-targeted digital ad slots. Unless "listens to X podcast" counts as targeting, but that's no different from "reads X magazine" in offline media. No creepy tracking required.
  - tivert 8y ago
    > Unless "listens to X podcast" counts as targeting It doesn't, except to the adtech targeters who want to muddy the water. Ad targeting in this context means individualized targeting based on individualize tracking and data collection, full stop.
- soared 8y ago
  If you click the blue triangle in the corner of an ad you can usually block an advertiser or choose to stop seeing it.

Tade0 8y ago

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?gclid=EAIaIQobChMI18aJkubq3wIVCQvgCh3UeQIdEAEYASAAEgLJ0PD_BwE 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).

manigandham 8y ago

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.

thatguyagain 8y ago
I don't understand. What stands in the way of a small niche website for, say, dog owners to sell ad space for dog related products without having some kind of data hoarding ad tech behind it?
- manigandham 8y ago
  Because advertisers don't want to deal with a bunch of smaller sites. That's why ad networks and exchanges exist, so you can buy a single impression for the right user wherever they are across the web. Take away the fine-grained targeting and you end up with big blind campaigns running on a few large sites with the biggest reach. This is the way TV and radio work, wasteful and expensive but great for the channels that get them.
  - mook 8y ago
    Why can't middlemen still exist, just without the individual targeting? Can't sites still self-report their categories (so that, say, a dog grooming site would say they should get dog ads)?
    - manigandham 8y ago
      They can and they do, that's what ad networks are. There are plenty of ways to group sites by category and readership without individual targeting but middlemen add percentage costs to the ad spend which the industry has been slowly pushing out. The bigger issue is that fine-grained targeting is still wanted so if you remove 3rd-party tracking then advertisers will go towards the biggest sites that can supply it via their own 1st-party tracking. Even then it's still hard to work with many vendors so even more of the money is now going to Google and Facebook who can just do it all with better data than anyone else.

eli 8y ago

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.

paulie_a 8y ago

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.

mschuster91 8y ago
> I don't get why so many US based websites are concerned about an EU law. Given that they likely have paying EU customers for subscription, they operate in the EU area. Which means they can be subjected to GDPR. Enforcement would be difficult, of course, but not impossible (think of seizing credit-card payments or bank transfers for sales proceedings of printed NYT in Europe). And GDPR violation fines can be massive.

tomrod 8y ago

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!).

cm2012 8y ago

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.

deleted 8y ago
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Reedx 8y ago
> people who no knowledge ... post so confidently The Dunning–Kruger effect at work. > 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. That's like when you see a news report about something you're a domain expert on. You notice the mistakes and are left to wonder how often that happens with all the areas you're not an expert on...
- rjf72 8y ago
  I think there's a secondary effect going on in social media comments (including this site). The mostly anonymous nature of things means that people have no ability to understand who they're talking to or their qualifications to speak on a subject. So they take cues from language itself. When things are posted without exuding confidence, people assume ineptitude or uncertainty and rarely regard it as meaningful. By contrast things posted confidently instill trust and confidence and thus are treated as more meaningful. You can trial this pretty easily by just creating multiple accounts and consciously changing the tone of the comments you make. It's pretty amusing! Online comment voting systems are extremely easy to game because of basic recurring phenomena like this, that you'll find many people come to exploit whether consciously or not. And thanks to those little arrows by our names, those comments that game the system end up near the top. And finally you also have to keep in mind the You and I that actually chat instead of lurk are outliers, a surprisingly small percent of all people on the site. So you get twisted and likely counter-productive conversational cues driving conversations between a likely biased sample of (not necessarily positive) outliers. And finally now add in the countless biased interests (corporate and political in particular) with presences working to steer perception to their benefit. Nonetheless, I still find it entertaining watching how all the parts play together.

tuacker 8y ago

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 https://www.adsfromsource.com

Nasrudith 8y ago

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.

soufron 8y ago

« It’s the eeeend of the woooorld »

mlthoughts2018 8y ago

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-york-times-targeting-ads-mood/ https://digiday.com/media/project-feels-usa-today-espn-new-y... NYT is deeply hypocritical when it comes to digital advertising.

em3rgent0rdr 8y ago
Yup. uBlock Origin blocks 20 requests, and PrivacyBadger blocks another 7 requests...I wouldn't visit nytimes.com without those installed.

smelbe 8y ago

How is possible this? Do they use the Postcards? https://designmodo.com/postcards/ https://designmodo.com/postcards/

arendtio 8y ago

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?

Kalium 8y ago
You're right! News outlets consistently choosing to favor their own revenues over a basic human right to private is very surprising. Perhaps they made a choice that looks the same from the outside, but could perhaps be very different from the inside? GDPR implementation is rarely as cheap, straightforward, or easy as some of its adherents might have you think. It can be a large, difficult, expensive undertaking. It may be worth bearing in mind that not every journalistic outlet has a sizable, disciplined, competent technical organization or the financial wherewithal to acquire one rapidly. These days, running a newspaper is famously a poor business. Might it be possible that organizations, faced with a choice between an easy way to cut some costs and a potentially non-trivial investment for marginal return, might in some circumstances opt for the former? Again, you're absolutely right that this looks like a crass choice between naked greed and basic human rights. It's just possible that it might be more.

bunderbunder 8y ago

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.

soared 8y ago
I'm not clear how that would work. How does NYT enabling ad exchanges enable advertisers to target NYT readers or the NYT website?
- plausibilities 8y ago
  JS injection into display ads, which happens a lot more often than you would think when it comes to ad display network content.
  - soared 8y ago
    Yeah, no it doesn't. I ran supply side programmatic for years and run buy side now. That is not true.
    - manigandham 8y ago
      What isn't true? That JS is everywhere in ads?
    - reilly3000 8y ago
      So mobile redirects just happen because of magick?
- tivert 8y ago

pornel 8y ago

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.

deleted 8y ago

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porpoisely 8y ago

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.

StreamBright 8y ago

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

nekopa 8y ago

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.

IshKebab 8y ago
While that idea would never work (who is going to bother with that faff rather than just googling laptops?) it does also show why Google can make so much money from ads.

the_watcher 8y ago

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"

ComputerGuru 8y ago

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

jillesvangurp 8y ago

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.

golemiprague 8y ago

I don't think I have ever seen an ad and clicked on it in order to get something. For the NY Times a lot of the ads are just for branding and they pay per views, not click throughs or acquisitions, so need to factor this into the results. Other websites with different size and recognition might need different kind of advertising where personal data is more important.

jgalt212 8y ago

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).

c3534l 8y ago

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.