Google Sarcasm, or How I (and the Entire Industry) Make a Living

This can produce bizarre results.

Funny thing happened. My article about Deutsche Bank’s decision to dump its stake in a Chinese bank, as other global banks had already done [What Secret Do Global Banks Know about Chinese Banks?], immediately triggered a long comment about … internet advertising.

“Nick Kelly” ruminated about the ads he’d seen as he was reading the article. It triggered a slew of other comments about the baffling, funny, aggravating, sometimes spooky, and often nonsensical aspects of internet advertising.

We might laugh or scream in despair or tear our hair out in frustration, but internet advertising and everything that comes along with it, such as incessant snooping, is a relentlessly booming industry.

It signals an epochal change. Numerous traditional newspaper publishers have gone bankrupt. Others are barely hanging on. Life is switching to the internet, and so they too scurry to the internet to make a living there. But internet ads don’t pay nearly as much as paper ads. And the old math no longer works.

The problem: a ballooning supply of ad space competes for limited demand by advertisers. And rates for ads have been crashing over the years.

So they make it up with volume – and evermore intrusive and obnoxious ads: internet advertising revenues in the US in the third quarter reached $15 billion, a new record, up 23% from the third quarter in 2014, which itself had broken all prior records (chart).

The report hinted at how these record dollar figures are being obtained: “Brands and agencies are focusing ever more attention on interactive screens, following consumers as they flock to digital platforms to be entertained, engaged, and informed.”

“Following consumers….” That’s the key.

We got a tiny fraction of that $15 billion in Q3. It came our way via the ads you see on this site. Most of them are from Google’s ad exchange Adsense, where advertisers bid to have their banners displayed on participating sites. It all happens in microseconds. The highest bidder gets the spot.

You occasionally also see ads that we place directly for our clients. Google isn’t everything. (If you want to explore advertising on Wolf Street, contact me.)

So when you open a page on my site, a mad scramble ensues behind the scenes at Google as to which ads appear, based on keywords in the article, cookies and browsing data stored in your device, your online dossier, what you’ve done with your smartphone, and a million other things.

Advertisers bid on the space. The winners get to place their banners in the article. They pay Google, which eventually pays my company, Wolf Street Corp, its cut.

This can produce bizarre results. Nick Kelly put his finger on it. And commenters replied with their own stores. Here’s “hidflect” to “Nick Kelly”:

Nick, your ads are different depending on your region, browser, OS and especially what cookies you have on your machine. It can be very disturbing to have an email conversation with someone about, say, controlling your weight through exercise and 10 minutes later see ads for dumbbells cropping up in your margin.

“picobello” to “Nick Kelly”:

Welcome to the Internet in the year 2015, Nick, where you are being profiled by Google, Facebook, and god knows who, to give personalized adds depending on the email content you get in your Gmail, sites you visit, Google search terms you use etc., etc. These are even linked to your phone and what sites you visit on your phone. Don’t worry, you don’t need to have an actual Google or FB account as they’ll just make a shadow profile. If I have your phone number in my phone with your name etc., and I install the FB app, it will upload your phone number, name, email address etc., and they make a shadow profile. Next time you buy something online and fill in your name voila! They know it’s you. So that’s how you get personalized ads.

“Mary” to “picobello”:

It can be fun, or alarming, to try and figure out how ads are chosen for your eyes only. My version of Wolf Street is heavily populated by offers to test me for Alzheimer’s. But the creepiest: A couple of months ago, I accidentally turned on my Mac’s iSight camera and took a picture of myself. Since then a wrinkle removal ad has been rotating that has a crude line drawing of my face.

“Yoshua”:

I’m targeted by good looking Chinese women who wish to “date” me. Obviously these women know something too since they are prepared to pack their things and leave the “miracle economy” and move to Europe.

“Thomas” to “Yoshua”:

I get the same but from beautiful Russian women. Are we being racially profiled by Google or are they just datamining pornographic preferences… hmm.

“Nick Kelly” then shared this elucidating tidbit:

Once after surfing porn between real work, I got a pop- up:

“You have visited a pornographic site! Protect your job, your marriage, your reputation! For just $10, we can remove all traces! We are an authorized MS contractor.”

A couple of years ago, a reader sent me a screenshot of a sushi ad next to my article on Fukushima!!

And then there’s this… Remember the rise, almost-IPO, and sudden belly-flop of Ashley Madison, the cheating service that was hacked? All heck broke loose in September after its members’ data was posted online. As I was reviewing Larry Kummer’s article on this topic that I’d posted on my site, the banner that appeared in the text about halfway down was, let’s say, peculiar – and I took this screenshot:

US-forgive-me-Flowers

The image – I don’t know what deal or scam it led to – is very similar to the image Ashley Madison used, the same frame of a woman from the nose to the shoulders, signaling to be quiet, with a wedding band on her ring finger.

“Life is short. Have an Affair,” was Ashley Madison’s motto while it was still perceived as a cheater service rather than just a scam of bots and fake pics tricking guys into spending money.

Now we fooled-men get the “Please forgive-me” Flowers ad to be fooled once again. Typical Google sarcasm.

It’s “contextual” advertising. Whether or not you ever checked out Ashley Madison, you might have seen that “Please forgive-me” Flowers ad on Wolf Street based on the context of the article, and nothing more. It’s not your fault!

So here are the dark lessons from Ashley Madison that are seldom mentioned by the media. Read… Three unmentionable insights about people, free from Ashley Madison

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  48 comments for “Google Sarcasm, or How I (and the Entire Industry) Make a Living

  1. Neil Dunn says:

    I read the Dbank article and did not notice a single ad for content. I think of the ads as target practice–>find the x or the equivalent and mouse-click it as fast as I can. Of course the article was so good so what else would I be able to concentrate on. I also appreciate this article for the enlightening content.

  2. Ptb says:

    Does anyone actually click on those ads?!

    • Wolf Richter says:

      Yes! Depending on where the banners are and how good they are, click-through ratios are between 0.2% and 2%.

      • Kasadour says:

        They might click on the accidentally but are these ads generating any sales at all? At some point businesses will realize their ad money isn’t generating the return they are hoping for.

        • Toddy says:

          You’re mistaken. Many ads generate plenty revenue, while some of course do not at all. There was a time when site operators did something like ad rate arbitrage: buy a google search ad for “keyword x”, that goes to a page full of ads optimized for “keyword y”. Keyword x is cheaper than keyword y -> profit. Google got wise to it and made the practice very difficult. Remember that site operations are almost nil in this day and age. Even if you only pocket $0.01 per click through, at scale, this is real money.

    • prepalaw says:

      The real question is, does anyone buy the stuff or service being advertised.

      • RDE says:

        For me the real question is why anybody would put up with advertisements while browsing the internet? I use the free ad blocker Ghostery (which is blocking three ads on WolfStreet as I type.) I just did a quick sampling of sites I frequent, from high volume ones like Bloomberg to fringe sites. Over 100 ad servers and trackers tried to get through and none were successful in placing anything on my screen.

        That said, I’m sure the NSA has me on a list of Enemies of the State because I use the word “bankster” in some of my posts —-.

        • Poppa Bear says:

          You SHOULD be worried. You live in the only country in the developed world that has a head of state that can legally order your assassination (pursuant to the NDAA, signed in 2011). And in a country without a free press, the commercial media forming opinions 24/7 based on information that is absent, bent, spun, or painted over, your neighbors who knew you best will be shocked to read that you were really running a school for terrorist commercial airline pilots in downtown Bayonne.

      • Kasadour says:

        And the real answer to the real question is no. Maybe there is a click or two here and there, but the coversion rate (sales, which is really what counts, after all) is zero. Even if there are 100 million eyes on the subject, nothing from 100 million is still. . . zero.

        http://markstcyr.com/2015/09/28/the-next-coming-commodity-failure-social-media/

        • Wolf Richter says:

          Don’t fool yourself. Advertising works and generates sales, lots of sales. People are looking for deals. They’re looking for the “sale” sign. B2B ads are informative and work too.

          Businesses aren’t stupid. They don’t like to waste money. Not all ads work, and some of it turns out to be a waste. But overall, advertising makes the economy go.

          To test it, tell a car dealer to stop all forms of advertising – and then watch traffic and sales fall off the cliff. I tried it for just two months, back in the day. Traffic dried up, and so did sales. It proved that advertising worked, even you have trouble pinpointing which part worked and which didn’t.

        • Kasadour says:

          I agree. But I am speaking specifically about the conversion rate (or lack of) of such advertising found on social media and blog sites like this. But I love this blog. It’s my favorite thank you

        • Wolf Richter says:

          Got it.

          Thanks for the kind words about my site.

  3. Nick Kelly says:

    Wolf -I’m relieved your aren’t mad at me. I thought I might get barred for kvetching about the ads. I’ve had some exposure to the newspaper business and woe betide the reporter who riles an ad buyer.

    Love the site and when it crosses my mind to have one of my own, I reflect on how much work you put into it.
    Anyway for those of us who like to watch macro events unfold, 2016 looks like being a very interesting year.

  4. michael says:

    A more important question is how many of those “clicks” actually generate a sale. Once that is determined, we will see ad revenue crash.

    • Wolf Richter says:

      We already know that half of all ad spending is totally wasted. We just don’t know which half.

      • Peter Gambier says:

        I have only just found your articles.They make interesting reading.
        I work in the world of lime plastering and building conservation
        and I only try to use what the ancients would have used which is
        a ‘hot mix’ or else lime putty and sand but instead of hair or plastic fibres which do increase the tensile strength of the mortar,I use sisal,a plant,which is much stronger than hair.
        I don’t advertise online or in the media,my business relies on word of mouth which means people recommend you,or not,so you have to be friendly,clean up after you and do a good job,people know where I live,I have a presence in my community,I only work 6 hours a day and never on the weekends.I have never had a new car and never take holidays.I do use some of the ‘Fangs’ you talked about namely Netflix and Amazon once or twice,but although I like the internet I could live without it,but I would miss my morning
        zombie shoot outs,these are my equivalent of computer card games.

  5. Michael Francis says:

    My visits to this site (and also other sites) also attract both Russian and Asian women who wish to date. Lately I have also been targeted by older women wishing to date.

    I wish I could find out and reverse what I did to attract such sites as I am happily married and such sites popping up on my IPad are an embarrassment.

    All I can think of is that maybe I accidentally clicked onto something which resulted in a ‘got ya’.

    Or maybe they think people who follow economic forums are lonely with lots of money.

    • Nick says:

      I think that the Internet bots associate reading articles about economic skepticism with being middle-aged, single, and male.

    • Peter Gambier says:

      I have been targeted by cute ladies and I love it but they are not after me that just want the money that I haven’t got.
      I have been happily married to the same lady for about 27 years and she find the fact that men think with their dicks very funny as this is
      our Achilles heel and it’s used against us to good effect.
      Luckily I have my Achilles heel under control,but after a few drinks
      that control, is all but gone,so I don’t drink either…..now.
      I’m interested in economic forums because I want to try and understand
      investing and money.
      I’m fascinated by films about money scams,so ‘Enron’ or ‘Madoff’
      or ‘The Wolf of Wall Street’ are interesting and in the latter’s case,
      very funny.
      I’m not worried about porn sites because I have rarely looked at them
      but a cute lady is very hard to ignore and advertisers know that and have
      used that weakness in men for years.
      When I’m old and feeble I hope to god I have a cute carer,virtual or otherwise,cute and beautiful things make the world go around,so in the future having a cute robot to take care of my needs
      would be a win,win situation.

  6. gary says:

    That chart of rising ad spending was amazing. Just how long do you think it can keep increasing? Do you think this industry is here to stay or do you expect some kind of crash? Thanks!

    • Petunia says:

      2016 is an election year and it will be a record year for internet political advertising. The more research people do on a candidate, the more targeted they will become by the advertisers. Remember, that not only can the advertising be targeted but the search results as well. Any search for candidate X can be substituted for candidate X, as well as, the candidate who is buying the most advertising.

      Happy New Year To All!

  7. Mark C. says:

    You know that Ashely Madison was exposed as a fraud site by Anonymous-turns out that its run by about 100 girls manning the keyboards per dollar to lure unsuspecting men (100,000 strong) into joining

    • c smith says:

      “…run by about 100 girls manning the keyboards…”

      Not even that complicated, and way cheaper: Try thousands of algorithmic fembots. No need for real women when a few lines of code will do the “trick”.

  8. MC says:

    About fifteen years ago my then boss (I since left and started my own business) told me a very telling phrase “Advertising does not work anymore”. In a way it was right: saturation has driven people to various methods to shut it off, both consciously and unconsciously, but I doubt anybody could have foreseen Google’s absolutely phenomenal growth in the following decade and a half, especially given it’s built around selling a product/service with minimal chances of success.

    I think the percentage of banners/ads that get clicks is around 1%. That’s really nothing to write home about, especially given Google has built its reputation around “targeted” ads, which supposedly have a greater chance of success than random ones.
    Now, clicking on ads does not automatically translate into sales: it’s the online equivalent of looking at a window shop or walking in and having a peek at the merchandise.

    To achieve this minimal success, Google has spent untold billions in coming up with sophisticated algorithms and walks a very fine line when it comes to the law, especially with “shadow profiles”.

    Lately it seems, at least to me, that either I am doing something to confuse Google’s powerful algorithms or there’s something seriously broken with the whole model.
    For example, given I recently looked up some information about ITBS (the bane of runners and regular joggers), I expected to be flooded with healthcare and fitness-related ads. I am yet to see a single one.
    Rarely, if ever, the ads I see are even remotely related with my browsing history or even my purchases on Amazon and eBay.

    My suspicion is the “instant auctions” Mr Richter speaks about trump everything. The highest bidder will always get ad space, even if Google’s algorithms tell “This is a waste of time and money. This person cannot be interested in buying imitation handbags from China”.
    That’s the reason so many happily married people find Asian and Russian women ready to date them! ;-)
    Those dating sites are prime movers when it comes to ad spending.

    • Ptb says:

      I think Goog gets their paying customers to come up near the top of a “search” on certain categories and then the click throughs that follow. So the appearance of an honest search result to the user, is a large part of their success. I know a couple of small business owners that attribute much of their growth to using Goog for this.

      I’ve been to googs main campus and it is something to behold. Many free perks to employees. Although I heard they just pulled back their child care perks.

  9. Aaron says:

    I’m getting an ad for HBO, one for SIM cards from a company called Sierra Wireless, JP Morgan Asset management and Spotify.

    You’re not so smart after all are you Google?

  10. Dave says:

    Have you ever visited ZeroHedge? They have so many scripts running in the back ground for ads it slows down the website significantly to the point I have reduced the amount of times I visit it. I ran some utilities to see what was going on in the back ground and they are capturing lots of information and serving up all kinds of ads. When it comes to running background scripts they are one of the worst (for financial websites).

    I guess those ads help you to pass time while you are waiting for the stock market crash. lol

    • W.H. Brewer says:

      Along those lines, I notice that Zero Hedge has recently started running “in article” (i.e. in the main body of the text rather than off to the side) ads sponsored by Bloomberg. I find this extremely amusing as ZH has largely made their living criticizing, and purportedly providing an alternative to, such mainstream news sources. But we’ll take your money thank you very much! Fair enough I suppose.

  11. Nicko says:

    Firefox and adblock ;)

    • Petunia says:

      Firefox and adblock plus.

      • The Vernster says:

        Firefox and NoScript; Duckduckgo as a home page.

        NoScript is an add-on to Firefox and disables scripting, but you can toggle it off if you want to actually see some content or other.

        I’ve been running this way for a couple years now and it’s amazing how much smoother sites run when you’re blocking all the scripting nonsense (leaving aside no ads).

        • Peter Gambier says:

          i use firefox and Duckduckgo too,although recently my system does take a lot longer to start in the mornings.
          I have no anti-virus software apart from Windows Vista ‘Defender’
          which comes as standard and after Vista expires I will no longer use Windows,I don’t like being spied upon and Windows 10 does that in spades.
          I just email friends and family and use Arsebook for my social time,I’ll buy books on Amazon and games on Steam
          but thats about it for my online presence.

  12. Paulo says:

    I don’t get any banners on this site and just use adblocker. Not having windows 10 also helps. In fact, if I see the Windows advert one more time on startup I might go for a new operating system. Google is a pain when ‘it’ tries to guess what I am searching for and attempts to complete my search requests.

    As for adds, themselves, it is like our view to the east. That direction we look at a mountain. It also contains the view of our electrical service and phone line. I don’t even see them. I buy a great deal of product online, but have never responded to an unsolicitated product and/or service and never will.

    Hey, your site is awesome despite Google mainpulations, (psssst, don’t tell them no one looks at their adds).

  13. Spencer says:

    Happy New Year Wolf.

    Thanks for the memories, from you, Bonner and Stockman, the best on the web.

  14. Dave says:

    If you hear a knock at the door, you know the “Wolf’s at the Door”.

    Happy New Years!

  15. prepalaw says:

    Wolf, I have two questions:

    How is the value (purchase price) of ad space on Wolf Street determined?

    (For example: The number of times someone opens your site; the quality of the viewers, based on purchases via Internet ads?)

    Does the value of your advertising space go down, if a viewer blocks all Wolf Street ads?

    • Wolf Richter says:

      All Google Adsense ads pay on a per-click basis. So if no one clicks (whether readers block ads or ignore them), we publishers don’t make a dime. All we do is carry free ads :-]

      The rate of the Google ads is determined by auction within the Adsense exchange.

      The value of Wolf Street is its excellent, smart, engaged, and growing readership (I’ll say a few more things on that in an upcoming post). Without you, the reader, Wolf Street would have no value.

      Wolf Street also works directly with companies that want to advertise on Wolf Street. The rates for those ads are negotiated based on numerous criteria. Prices are based not on clicks but on “impressions,” that is how often the ads are viewed.

      The value per se of WS ad space doesn’t go down if readers block the ads, but the frequency at which these ads are visible goes down, and so the revenues from the site go down.

      So yes, I would prefer if readers didn’t block the ads, but I totally understand why they block ads.

      The other option would be to charge readers (Like the WSJ and others do). But I don’t want to do that. Wolf Street is designed to be a free site without sales pitch, supported only by advertising … and I’d like to keep it that way.

  16. Petunia says:

    Internet advertising is very easy to manipulate. I click on ads on the sites I regularly visit because it generates revenue for them. It is my way of paying for the content I enjoy with my time and computer resources. I don’t care at all about the product or cause, be it tractors or Russian mail order brides. Just two of the things I will never spend money on.

    What I find interesting is that the advertisers don’t seem to correlate actual sales to the amount they spend on ads. The more times I click on an ad the more ads they send me for the same advertiser. It is actually possible to inflict economic damage on a company using this technique on a massive directed scale. Not to mention a political campaign.

  17. J P Frogbottom says:

    Frankly, I don’t mind the internet Ads. I found a credit card with better rewards, (I always pay off there balance so I don’t care if it charges 100% a month), and some other better outlets for the few goods I buy.

    Hey-somehow the content providers do need to make a living. No, I am not thrilled to be followed by all these entities, but this is the 21st century, and maybe the end of civilization as we have come to understand it. My life is boring, follow it, but don’t fall asleep at the key board.

  18. NOTaREALmerican says:

    I always liked tranes. I like this site too. I’d like to see some trane ads on this site. I wonder if I type tranes enough some ads will appear about tranes.

  19. GatoHead says:

    If you wanna have some fun confusing the algos, do a number of disparate searches (all without clearing out cookies, etc). Such as google search for:

    Both Motley Crue and Taylor Swift
    The NFL Playoffs and Macrame
    Quantum Mechanics and MMA

    Same with eBay. You get the idea.

    You end up being so all over the place that the algos and bots don’t know what to do with you. I’ve found it helps, if only incrementally.

  20. Robert says:

    “your ads are different depending on your region, browser, OS and especially what cookies you have on your machine. It can be very disturbing to have an email conversation with someone about, say, controlling your weight through exercise and 10 minutes later see ads for dumbbells cropping up in your margin.”
    Wolf, are you saying that they are reading your email- how else would they
    link ads for dumbbells to a message about weight control? That’s a big jump from collecting info from someone enabling cookies!

    • Wolf Richter says:

      Google is reading Gmail, and other email providers are reading their customers emails too. They don’t even try to hide it. They disclose it publicly. Even worse, ISPs such as Comcast, have been doing “deep packet inspection” which reads ALL your internet traffic. No secret there either. It’s the new normal.

      • Robert says:

        So how is a corporation or even an individual entrepreneur to protect himself from routine theft of technology, trade secrets, etc. unless they forgo all electronic communications? (and is that a big part of government security agency activity, for that matter.) That is not something that can be dismissed as “the new normal” anymore than having someone’s drone hovering outside your bedroom 24/7.

      • ML says:

        These free email addresses/services come with a price/strings attached. You don’t get something for nothing.

        One thing I like about your site is that I can submit/post a comment without having to go through an intermediary service such as discus. Much better and less intrusive.

        As for ads my main complaint when using an ipad is that i might accidentally touch a link to an ad when holding the screen with my fingers.

  21. Tim says:

    On Wolf’s site I’ve gotten this a few times: “Become a barefoot writer!” or something like that. How on earth would they target that??? Have I been reading too much?

    That point above by Robert, basically about personal IP, has been a thorn or burr in my side, since I first heard about the total lack of real protection. IP means we have a right to personal privacy.

Comments are closed.