Fake News No Problem: Internet Totally Dominates Advertising in the US, But Only 2 Companies Divvy up 60% of the Spoils

TV falls further behind, suffers first ad revenue decline since the Financial Crisis.

You might think you never look at these ads or click on them, and you might think they’re the biggest waste of money there ever was, but reality is that internet advertising revenues in the US are surging, and are blowing all other media categories out of the water. But only two companies divvy up among themselves nearly 60% of the spoils.

Internet advertising revenues in the US soared 21.4% in 2017 from a year earlier to a record of $88 billion, thus handily demolishing TV ad revenues, which declined 2.6% to $70.1 billion, according to annual ad revenue report by the Interactive Advertising Bureau (IAB).

It was the second year in a row that internet ad revenues beat TV. In 2016, internet ad revenues (or “ad spend”) had surpassed TV ad revenues for the first time in US history.

And 2017 was the first year in the data series going back to 2010 that TV advertising actually declined. That formerly unstoppable growth industry is now a declining industry.

Of the $254 billion spent on advertising in 2017 in the US, online ads obtained a share of 35%. In the chart below, there are two big media categories: Internet and TV. The rest are also-rans. Newspapers (print) are still on the list, if in much diminished form, down about 25% from 2010, but still nearly double the ad spend of OOH (out-of-home advertising, such as billboards, ads inside public transit, etc.):

Why is the Internet so successful in attracting the big bucks?

Read IAB’s explanation carefully because it discusses what happens with your personal data, which is precisely makes internet advertising so appealing to advertisers:

Current technological advances in big data, predictive analytics, artificial intelligence, and robotic process automation (RPA) have all greatly impacted the industry and will continue to do so for the foreseeable future.

The volume of digital data being created on the internet is increasing exponentially. Every year the digital universe doubles in size with many estimates indicating a 50X growth between 2010 and 2020 [“Inside Big Data, Exponential Growth of Data,” February 2017].

These large volumes of data provide the raw ingredients to enable greater advertising efficiency. The ability to apply analytics and AI to massive volumes of data enable marketers to target end users in ways not previously possible. Furthermore, these same advances when combined with RPA have allowed for increased automation throughout the ecosystem – driving further efficiencies.

Mobile is hot. Internet advertising on mobile devices surged 36.2% in 2017 from a year earlier to $38.1 billion of the $88 billion in total internet advertising.

Among the major internet ad formats, search ads – hello Google – get almost half the share to total spending:

  • Search ad revenues +17.5% to $40.6 billion (46% share).
  • Banner ad revenues +23% to $27.5 billion (31% share)
  • Video ad revenues +33% to $11.9 billion; all of that growth came from mobile devices, up 53% to $6.2 billion; there was no growth on PCs.
  • Other (lead generation, audio, classified, etc.) +19.2% to $8 billion.

Social Media sizzles, fake news no problem. Advertising spend on social media surged 36% from the prior year to $22.2 billion, now accounting for a quarter of all internet advertising, up from just an 8% share in 2012.

But who’s getting all this internet ad manna?

The report is presented at an “anonymized aggregate level,” and no company names are given. But it’s not hard to figure out. The top ten companies got 74% of the share in Q4 2017, according to the report.

For further detail, we mosey over to eMarketer, which estimates that in 2017, Google captured 38.6% of the total internet ad spend in the US and Facebook captured 19.9% in the US, for a combined total of 58.5% of total internet ad spend. Just by these two companies!

For perspective, Google’s parent Alphabet reported global revenues of $111 billion in 2017, and Facebook $40 billion. Practically all of it was generated by internet advertising.

eMarketer expects Google’s and Facebook’s respective share of total ad spend to decline slightly going forward, even as their dollar ad revenues continue to rise, but more slowly than the overall market. They’re under pressure from some newcomers and smaller giants, so to speak, and from Amazon which is muscling into this space and is expected to carve out over $2 billion in 2018, and more in 2019, providing further excitement in future years.

E-commerce sales are soaring, but only about half of retail is under attack from e-commerce, and that half is getting crushed. Read…  Brick & Mortar Meltdown Pummels These Stores the Most 
 

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  84 comments for “Fake News No Problem: Internet Totally Dominates Advertising in the US, But Only 2 Companies Divvy up 60% of the Spoils

  1. Gershon
    May 18, 2018 at 1:03 am

    TV and print media are dead. Who wants to read/listen to non-stop globalist propaganda and DNC talking points? As in the twilight days of the former Soviet Union, even the dullest of the sheeple are starting to see right through the MSM’s lies and mendacity.

    • TJ Martin
      May 18, 2018 at 8:39 am

      Anyone with a modicum of common sense , education and discernment that recognizes the fact that 99% of all internet ‘ so called ‘ news and information is in fact pure unadulterated blatant propaganda… marketing or otherwise , tin foil hat conspiracy theories , narcissistic opinionating and click baiting aimed at the vapid and the inane in the name of profit to the detriment of all those foolish enough to fall for such tripe

      • Jon
        May 18, 2018 at 10:53 am

        Welcome to capitalism

        • robt
          May 18, 2018 at 11:27 am

          Think about all the non-stop feel-good ‘information’ projected by any government, socialist, communist, or other-ist financed by taxes, as advertising, or perhaps better, brainwashing, about what a wonderful job they are doing.

        • Tim
          May 18, 2018 at 3:40 pm

          Ya, that’s right. Everything’s for sale! Get with the program. It’s capitalism. Capitalism = sales. Truth for sale, highest bidder.

        • Setarcos
          May 18, 2018 at 6:42 pm

          Please try moving to areas representing the alternative to capitalism, i.e. Cuba, Greece, etc. Enjoy.

        • alex in san jose AKA digital Detroit
          May 19, 2018 at 5:50 pm

          Capitalism operating as designed.

          Honestly, I find Drudge Report to be better than Yahoo, how about that? For real news I can trust I guess I’d go with the NYT, CNN, WaPo, PBS/NPR etc

          Really my main news source is Reddit. Theoretically it’s a free market of ideas there but the people running it love, and profit from, a wide array of hate groups.

          r/news is pretty good, r/all for big stories, and there are some great subreddits on there, like r/latestagecapitalism, r/socialism, and for a tankie good time, r/FULLCOMMUNISM

        • Hank
          May 22, 2018 at 6:46 pm

          Of what capitalism do you speak. The US is a corporate oligarchy, there is and has not been free market capitalism in the US for a very long time! The option that you would like to purpose and the results that follow….

          I can provide you the results, have been dealing this in actual history for a bit.

      • Mikey
        May 18, 2018 at 7:46 pm

        The only place I see something resembling actual news is from individual youtubers. I find aljazerra and rt more credible then cnn and nyt wapo.

        • gardener1
          May 19, 2018 at 7:09 pm

          Alex in san jose – If you want to find the real news on reddit go to r/undelete where the big news subreddits flush away the top stories.

  2. interesting
    May 18, 2018 at 1:19 am

    The only time I clicked on an ad was by accident. The browser seems to have timed my click habits perfectly cause as i’m about to click on something the page expands or contracts and I’ve hit ads a few times inadvertently. On my phone, forget about it, the “X” is useless and never works so I rarely go online with my phone.

    Even the top line on my email list (yahoo) is an ad that, as described before, I’ve click on because of a page change at just the right moment.

    And how many of those ad views are click farms?

    • Lion
      May 18, 2018 at 1:32 am

      My gut feel is that the “Internet” in the sky already knows your IP address and has a history of your viewing, and therefore thinks it knows what types of ads it should (or wants) to display on your screen.

      • Lion
        May 18, 2018 at 1:34 am

        I looking at Wolf’s site now and I get an ad for thinning hair. You got me on that one Wolf………………………….

        • MC01
          May 18, 2018 at 7:20 am

          Nonsense: lions never go bald.

        • alex in san jose AKA digital Detroit
          May 19, 2018 at 5:52 pm

          I get ads for the most cockamamie stuff … sometimes the Internet decides I speak Spanish (I don’t) or am pining to visit home, where home = Korea (it’s not).

      • Jas
        May 18, 2018 at 2:14 am

        One more reason I use privacy badger, cookie blockers and a VPN. I get ads but not based on my “personal profile”.

  3. OutLookingIn
    May 18, 2018 at 1:40 am

    Why are these adds so successful? Gullibility.
    Non educated or poorly educated people, are in general gullible. Enticements seem to be over powering to the gullible and they tend to believe these advertisements as the absolute truth.
    The dumbing down of society has worked to perfection.

    • fajensen
      May 18, 2018 at 5:13 am

      Non educated or poorly educated people, are in general gullible.
      Hm!? In my local sample environment of highly educated people of mostly Bsc’s and Phd’s I find those to be the people who are most readily screwed over by our contractors! Not once, several times.

      Their weak spot is sometimes that they think they are much too smart to be fooled so they don’t read what the contracts say. The Dunning-Kruger effect is thus demonstrated.

      The reality is that stupidity is uniformly distributed: The same percentage of people at all level of income and at all levels of education – are just born unredeemable stupid!

      I dont like how we always mock some poor, dumb, sucker falling for the diet-pill subscription, while ignoring the intelligent (but dumb) highly-paid academic falling for pretty much exactly the same scam, only shaped as a leasing contract or an insurance!

      I don’t like it because I.M.O. the sucker suffers disproportionately, he/she gets to deal with the expensive mess alone, while the high-level idiot has staff and ressources to clean up after themselves and is generally never made to pay in any way. Mocking the sucker is like kicking a puppy in its face and diverts attention away from the dangerous idiots, those in positions of authority and power where their stupidity can damage thousands, maybe millions, of lives.

      • intosh
        May 18, 2018 at 6:28 am

        There are many facets of “smart” and of “education”. Many school-educated people are book-smart but “street-dumb”. Generally speaking, the school system adopted worldwide is not conducive of critical-thinking, quite the opposite.

      • OutLookingIn
        May 18, 2018 at 11:27 am

        Unfortunately, you just can’t “fix” stupid.
        Its why I love the Tom Hanks line in Forest Gump –
        “Stupid is as stupid does.”

      • polecat
        May 19, 2018 at 9:36 am

        One goes the diet pill route, while the other gravitates towards the diet cruise excursion .. all expenses paid in guilt, in either case !
        But I’m sure the advert folks make bank on both accounts … ‘:(

    • MC01
      May 18, 2018 at 7:40 am

      If you read IAB’s explanation carefully, the reason is clearly stated: Internet data volume and traffic increase exponentially every few years at a time when most traditional media are in a well deserved decline.
      This means that even if ads have a very poor “clickthrough ratio” traffic is so massive, so huge, Internet advertising is worth a shot, especially if there’s favorable fiscal legislation for advertising. ;-)

      Of course advertisers know extremely well how easy it is to block off their ads on the Internet. It takes less than twenty seconds on a moderately fast Wifi network to download an ad-blocker for Apple’s iOS and twenty more seconds to set it up properly. In less than a minute all those technological advances (I’d have a lot to say on how liberally, and improperly, the term AI is used these days but I digress) and especially all your ad money have gone up in smoke.
      Of course data will still be gathered unless privacy-saving tools are used, but what you as an advertiser care about is that people see your ad and they aren’t.

      Given how widespread ad-blockers are these days I am honestly surprised most advertisers don’t push for a price cut from Alphabet and FaceBook, especially given both company’s shenanigans to inflate clickthrough ratios through, shall we say, “creative” means.

      • May 18, 2018 at 12:18 pm

        If you know how browsers work, you don’t even need an ad blocker.
        It is THE dirty secret of web browsing. And I’m not going to tell you all how to do it, I have my own websites that have ads on them.

        Why do think it’s so hard to root Cell Phones?

    • RangerOne
      May 18, 2018 at 7:52 am

      No one is too smart to be scammed. Granted many of the scams out there are super lazy and trying to pick off the most vulnerable people. But aren’t talking about advertising?

      • California Bob
        May 18, 2018 at 11:10 am

        “No one is too smart to be scammed.”

        Correct. I’ll posit that anyone who thinks they’re ‘too smart to be conned/scammed’ is ripe for the picking. Every once in a while I’ll buy a pig-in-a-poke gadget or product–FlexSeal? Gorilla Glue? etc–just to remind myself I’m a sucker, too.

        • Tim
          May 18, 2018 at 3:43 pm

          and one of the easiest scams is health, using fear factor for sales.

    • May 18, 2018 at 7:52 am

      Well, there is this too : THE ADs ARE SUCCESSFUL BECAUSE THE SELLERS HAVE THE REVENUE TO PAY FOR THE ADs — because people are buying things they do not want or need — that they cannot afford — with money that they certainly do not have — a topic greatly covered here at Wolf Street.

      When the spending gravy-train finally stops — when this damned credit-fueled cycle ends — then the profit-revenue that pays for the ads will diminish. I would expect fewer, perhaps more finely targeted ads.

      A rising tide lifting all boats and that — AD SPENDING is fueled by PERSONAL CONSUMPTION, period.

      Personal consumption is overdue for a pause if not a hard stop. And IMO, this spending insanity cannot go on indefinitely.

      • MCH
        May 18, 2018 at 8:32 am

        What are you implying here? You want to stop the gravy train to the workshop of the world and all of those other economic engines?

        Without the US debt slaves, how do we raise the living conditions for the rest of the planet. What are you? Some kind of conservative nut job? So heartless, stop being so selfish. Next you’ll want to stop Americans from subsizing drug research for the ROW. That’s just so wrong.

        • May 18, 2018 at 8:58 am

          Name calling — the final refuge of those who lack a coherent argument.

          All empires have failed when they outran their resources. ALL ! (I am no supporter of the American Empire, this is just an observation.)

          Sustainability is the path forward for the best living standards, and the ultimately the survival of the human race. Frugal living is but one of many of the input parameters of sustainability — living green so that we, ourselves ( i.e., the ‘humans’ ) may prosper while the planet is not pillaged.

          Building and transporting and selling — and then finally trashing — wasteful products and associated packaging, is not anywhere near the path to sustainability.

          “Conservative nutjob” ? Hardly ! Liberal nincompoop ? More likely true.

          Signed,
          Robert_D, supporter of Green causes, LGBT rights, gay marriage and a contract for animal rights and fair treatment too. Too mention just a few !

      • Mel
        May 18, 2018 at 9:36 am

        “AD SPENDING is fueled by PERSONAL CONSUMPTION, period.”

        … or borrowed money, another period. Good thing this key on my keyboard can keep on making periods.

        • Robert_D
          May 18, 2018 at 1:32 pm

          Yes sir, I was thinking that too. But this line threw me off from applying the ‘/sarc’ modifier :

          “Next you’ll want to stop Americans from subsidizing drug research for the ROW. That’s just so wrong.”

          . . . . try as I might I just could not find any sarcasm in that line. America, with our still remaining industrial might, along with some remaining (post Marshall Plan) good intentions, should be subsidizing drug research for ROW ailments such as malaria, Ebola, AIDS, river blindness and the like. Too many to list, most of which afflict the ROW much more than the Good Ole USA .

          If indeed the comment was sarcastic, I humbly apologize for failing to see and to understand that.

      • California Bob
        May 18, 2018 at 11:22 am

        To be fair, Robert_D, I think MCH was being sarcastic.

      • Ambrose Bierce
        May 18, 2018 at 1:13 pm

        Good point, the buyer pays for the advertising. Advertising exists in a self closing loop, once the need is fulfilled. Of course there are always new products, cellphones replace dial phones. Bob Prechters parable of Two Jaguars is still the touchstone in what happens when consumers are satiated. It comes down to metaphysical values, when materialism exhausts itself, spiritual values return. The latest generation ‘buys’ experience, travel and adventure but that has a limited shelf life as well, the exotic or your own backyard? And if the wealth disparity gap continues most of us will be a lot poorer.

    • Setarcos
      May 18, 2018 at 10:15 am

      Highly educated people often have a specialized type of knowledge and often also have a lethal characteristic…hubris.

      For example, the FED has an army of analysts, highly educated. None of their models included a nationwide housing price collapse a decade ago because it had never happened.

      Their error would not be so catastropic if there was not also a concentration of power.

    • Mikey
      May 18, 2018 at 7:51 pm

      Yes, facebook in particular, has made it extremely easy to identify stupid people and what they believe in and then target them with a new product specifically tailored for them like ” blueberry essence acai nettle arthritis cure”. A polish guy became billionaire helping people do this. So, it is seperating idiots from money which I guess is a useful social function. Placebos work about one third of time so buyers happy too.

      • Randy
        May 19, 2018 at 11:23 am

        I tried the blueberry essence acai nettle arthritis cure for my roids but it didn’t work.

  4. B
    May 18, 2018 at 2:04 am

    Suppose all the algos knew everything about me and big data verified the results through tracking and what not. Then what is the point of advertising to me if all my actions can be predicted? It should be easy to factor my behavior into the market, right? The reason these ads exist is because we humans are irrational actors, some more than others, and that gives room to sell wasteful, inefficient low quality crap that is destroying the planet.

    • Mikey
      May 18, 2018 at 7:52 pm

      The ads are pretty effective when I drink too much.

  5. Enrique
    May 18, 2018 at 3:53 am

    This is one of these things that has never made sense to me on any level. I don’t think ever in my life that I have given one iota of thought to any ad on the internet (assuming same had gotten past whatever cocktail of ad-blockers I was running at the time.)

    I generally eschew using mobile devices for internet access other than in emergencies, as these tend to give you an utter sewer of adverts and other garbage that I don’t want.

    The above statements would apply to more or less my entire peer group and everyone I know.

    And then you often hear reports that FaceBorg and the like sell ads based on metrics that would imply a worldwide population of 40 billion people (or whatever) if they were actually true.

    What am I missing here? I almost feel like this is analogous to the dramatised moment in the Big Short where the guys visit all these abandoned housing subdivisions in Florida and realise an entire industry is constructed on smoke and mirrors.

    • Seb
      May 18, 2018 at 5:18 am

      60% of online ad spending is consumed by the “ad-tech” — that is, the targeting of users… But advertisers have no idea where their ads are running. If they did I’m sure many would be shocked and horrified.

      • Anon1970
        May 18, 2018 at 8:07 am

        Every once in a while, I unblock Zero Hedge just to see who is advertising on the web site. Yes, the advertisers would be shocked and horrified.

    • Mikey
      May 18, 2018 at 8:00 pm

      It is not all useless. One of my kids gets half million sales a year from internet ads. Whether he makes a profit, i cannot tell as his recordkeeping is incomprehensible to me.

  6. CIT
    May 18, 2018 at 5:13 am

    “..Google captured 38.6% of the total internet ad spend in the US and Facebook captured 19.9% in the US, for a combined total of 58.5% of total internet ad spend.”

    I understand that these are big market share numbers, but aren’t there other industries with similar or even more disproportionate figures? For example, Commercial aerospace (Boeing/Airbus), Railways (Burlington/UNP) etc.

    On the other hand, I believe if you are able to get net profit numbers, GOOG and FB market share of profit will likely be even higher than their profit share of revenue, similar to Apple’s market share of 15-20% of handphone units but >80% of the market profits.

    Maybe the key is the value the tech companies are replacing/destroying along the way. Someone once posted: Would you go ahead and create $1B of value knowing that it would destroy $5B of value elsewhere?

  7. Mike
    May 18, 2018 at 6:19 am

    After going to the Market Watch website yesterday and seeing a large online ad for “RSVP Cruises” I had a WTF moment. First off I’m not gay and haven’t searched or looked at anything remotely like a gay cruise. Whatever AI online advertisement placement algorithms they are using are clearly broken. :)

    • Bobby
      May 18, 2018 at 7:27 am

      Haha, yeah, the typical “looking for love” ads I used to get for years changed to engagement ring, tiffiny ads this week. Not that I’m going to any jewelry sites, I’m starting to wonder if accidentally I have an app that is accessing and filtering through my text messages for key words.

      • RD Blakeslee
        May 18, 2018 at 11:01 am

        I’m 87 years old in three days and my junk folder gets multiple ads every day, offering me beautiful, foreign (usually Russian – shades of Trump’s problems) women.

        Unfortunately (until this very moment – now THEY KNOW!) My weenie is now only a few centimeters long …

        • Gandalf
          May 18, 2018 at 5:06 pm

          Just get an ad blocker, there are tons available for whichever browser you are using. Adguard, Ad-block Plus (ABP) are my favorite.

        • May 18, 2018 at 5:21 pm

          Make sure you white-list my site. Or else I don’t get my beer money :-]

        • MCh
          May 19, 2018 at 7:32 pm

          I always get it confused, isn’t it blacklist?

          I always thought whitelist meant you are ok. Doh

      • Setarcos
        May 18, 2018 at 12:20 pm

        They are probably listening to what you say near your phone.

        • Crysangle
          May 20, 2018 at 9:44 am

          Bugged usb toothbrushes.

    • LessonIsNeverTry
      May 18, 2018 at 10:48 am

      Maybe they are so good they have inferred behavior or desires of which you are not yet consciously aware? :)

  8. raxadian
    May 18, 2018 at 6:30 am

    Whatever happened to Internet ads budget being reduced due to most ad clicks being from bots?

    • May 18, 2018 at 10:18 am

      Consumption spending is high enough to offset the ad-spending due that is wasted due to the click-bots . . .

      Watch out when personal consumption spending declines — and the advertisers, measuring results from ad-spending more closely — have to reduce ad dollars because the revenue that pays for the ads is not there.

      I did mention earlier that personal spending consumption is fueled by the current credit cycle. Also, I doubt, but I am not certain that most advertisers do not borrow to pay for ads, but rather pay for ad spending out of the product (being advertised) revenue stream.

      I will repeat for effect that personal consumption produces the revenue that pays for the ads. An analogy might be this, why are the Kardashians making so much money for doing nothing of any value (IMO) ? Because the ads on their shows(?) generate revenue for those that produce the products being advertised. A very straightforward relationship, IMO.

  9. Tom Welsh
    May 18, 2018 at 8:23 am

    Long ago I read about the CEO of a big corporation who said “I know that half of our advertising spend is wasted, but I don’t know which half”.

    How did he know that it wasn’t all wasted?

    • May 18, 2018 at 10:28 am

      Sales?

      • don
        May 18, 2018 at 11:37 am

        TV and internet adds assume the inability of people to psychologically tune out, in addition to using add blockers. I’m reminded of an old joke about crazies and shrinks; a crazy lives in an imaginary fake castle; the shrink collects the rent. The more crazies, the more rent, the more income for the shrink, and without having to break all those real windows in the neighborhood.

      • Kasadour
        May 18, 2018 at 12:23 pm

        Does anybody have any data on conversion rates?

        The ANA estimated that up to 28% of online traffic is a result of “click farms”, but it turns it that figure is exponentially higher.

        “No matter what you are hearing or reading about digital ad fraud, I can assure you it’s actually worse than you think.”

        • Mikey
          May 18, 2018 at 7:56 pm

          Exponentially higher would be more than all.

    • Crysangle
      May 20, 2018 at 10:02 am

      Because he also owned an advertising company and half of the corporate advertising expense ended up in his pocket and so was not wasted ?

      He never knew the other half and so could not judge between the two.

  10. Bobber
    May 18, 2018 at 9:17 am

    The problem is Facebook and Google make tons of money off our data without paying us anything. The model is too lucrative to be sustainable.

    I think it’s only a matter of time before a competitor starts paying you for that data via cash or a product discounts. If people got a cut of the advertising money, they wouldn’t care as much about their data being manipulated.

    • California Bob
      May 18, 2018 at 11:25 am

      “I think it’s only a matter of time before a competitor starts paying you for that data via cash or a product discounts.”

      I think that’s been happening for a while. Aren’t, for instance, the Nielsen Ratings–is Nielsen still a thing?–clients being paid for recording their viewing habits?

  11. Paulo
    May 18, 2018 at 9:41 am

    The only adds I get are the ‘memories’ of past Amazon purchases when I look up something on Amazon as a prelude to buying something needed…which is usually done just for price discovery. Other than that, adblocker and Firefox settings seem to work just fine. Local print adds are eclipsed by Craigs List from what I can see.

    regards

  12. G
    May 18, 2018 at 10:53 am

    So it seems if and when there is an economic slight decline, and people stop purchasing all the BS material plastic consumption and all the other on line deals, then revenue for Tech and Internet business would drop?

    Im really not sure how much advertisement over the internet translates into people actually buying their products. I have a feel that the 88 billion spent has not translated into 88 billion in profit for those who advertise, almost every comment writes about not clicking on the ads or ever buying anything because of the add.

    Is all the ad money just slush money from the low interest rates that put some extra bucks in the average American pocket, the same pocket that count buy a house and uses most of it on rent. Our we buying wasteful material garbage, because it fills up the true void of ever being able to “live the dream”?

    There must be a correlation at some point between people buying all this material waste and tech power and profits. What happens when people stop buying and all the QE trickles down theory dries out? Will tech take a big hit?

    • May 18, 2018 at 11:06 am

      I have been trying to make the same point with my comments here today. I agree with you 100%.

      I wonder from a few of the comments here today (not responses to my specific comments) if people commenting here seem resistant to the idea that product sales are the beginning and end of ad sales (ignoring public interest groups, charities, religions, etc — which “sell” a different kind of “product” in the end).

      Which is, spending and buying, by a public whose median consumer has (i) no real savings and (ii) no REAL income growth for decades and (iii) is keeping up with the Joneses by taking on more debt.

      Reading the likes of Mauldin, Stockman and other like-minded bloggers tells us with great certainty (the Writer’s certainty) that this debt-fueled binge will come to a full stop. Of course they give no other time frame but “soon” .

  13. Jon
    May 18, 2018 at 11:11 am

    I was sitting with my friend one time and both of us were not on our phones as they were sitting on the dresser in his room and he was telling me about his proposal story and the ring he bought. We both go on Instagram an hour later and the first sponsored ad that shows up is for engagement rings. I never previously typed, searched, or texted that word, ever.

    Be scared people, be very scared. They are listening.

    • Setarcos
      May 18, 2018 at 12:27 pm

      This is a common line of discussion at dinner parties nowadays. Everyone seems to have a story.

      Example, 20 something talking on the phone to her grandmother about a relative with colon cancer …then gets served up colon screening type ads.

      At one dinner, everyone began to turn their phone off, but one person reminded us that those who really want to listen don’t need our phones turned on. Just ask Angela Merkle.

  14. BirdBrain
    May 18, 2018 at 12:28 pm

    “TV falls further behind, suffers first ad revenue decline since the Financial Crisis.”

    Good—it’s about time! I can’t stomach watching the PROGRAMMING. I used to be able to watch the old-timer shows, but the incessant screaming ads made me turn even those stations off.

    Have you ever watched the behavior of (or tried to hold a conversation with) those who enjoy staring at/get their information from the lDlOT BOX / B00B T00B ?!

    PROGRAMMING.

    • Mike G
      May 18, 2018 at 1:39 pm

      I cut the cord on cable TV a year ago and don’t miss it at all, in fact I feel much clearer-minded not having loud advertising and lowest-common-denominator idiocy blasted at me. Just occasional streaming shows or DVD movies. Much happier.

    • May 18, 2018 at 4:45 pm

      Given your comment, and my agreement with it — this book by Neil Postman, “Amusing Ourselves to Death”, might be a good recommendation for you. I loved it to death !

      https://fourminutebooks.com/amusing-ourselves-to-death-summary/

      • BirdBrain
        May 18, 2018 at 6:27 pm

        Written in 2005, I think most of it would run along the lines of “Duh”.

        I prefer listening to the words of “prophets” from decades past via YouTube (for instance Robert Welch from the John Birch Society).

  15. Kelly Graham
    May 18, 2018 at 12:36 pm

    Thanks for this analysis Wolf – I love to see stories about my sector, which is the screen-based industries.

    Whatever happened to your donate button?

    • May 18, 2018 at 1:57 pm

      Kelly Graham,

      My “How to Donate” button is alive and well, thank you for asking :-]

      On a PC, it’s in the top menu bar toward the right. On a smartphone, click on the hamburger menu icon on the left just above the WOLF STREET logo. This moves the menu on the screen, where you can see all menu items, including the “How to Donate” link, but no hamburgers today.

      Or you can just skip all of this and go straight to here:

      https://wolfstreet.com/how-to-donate-to-wolf-street/

  16. Ambrose Bierce
    May 18, 2018 at 1:30 pm

    McLuhan said that the nightly news is always bad in order to provide background for corporate advertising. Ex: Story about a hurricane, followed by an ad for homeowners insurance (or a can of Flex-seal). He also said Ads were the new art form, because more talent and creativity went into ads than in any personal or non corporate artistic endeavor. Placing ads on the internet is like putting a saddle on a car, since most product discovery on the internet is self directed. Most of our technology is derived from last centuries vision of the future; Dick Tracy’s wrist radio and Orwell’s police state. Real technology is changing the world in ways we fail to comprehend, while we are dazzled with these Buck Rogers gadgets. The moment of disillusionment is coming, because no society, or global culture, has ever been this tightly bound to one set of beliefs.

  17. ewmayer
    May 18, 2018 at 4:52 pm

    “Every year the digital universe doubles in size with many estimates indicating a 50X growth between 2010 and 2020” — if the digi-crap-verse really is doubling in size every year, that would imply a roughly 1000X growth every 10 years.

    Also, I’d love to see an estimate as to how much internet content is simply duplication. I suspect the rate of growth of genuinely original content is much more modest, i.e. that it is the rampant ever-greater-duplication-of-original-content as each news story gets re-[*]-ed endlessly which is driving nearly all the growth. There’s an economic analogy here – GDP continues growing “healthily” but ever more of it is from unproductive economic churn and financialization. “We don’t actually produce anything of real value anymore, but we make it up on volume.”

  18. Gandalf
    May 18, 2018 at 4:59 pm

    That’s why you need ad blockers on your browser, including your mobile phone. I like Adguard, which has free versions for Android and iOS phones also.

    Ads? what ads? Wolf has ads on his website? (sorry, Wolf)

    • Gandalf
      May 18, 2018 at 5:19 pm

      P.S. the Opera browser has a built in ad blocker on Android phones. I use that on my Android phone rather than Adguard or the other adblockers which are a bit difficult to turn on in Android

  19. gunther
    May 18, 2018 at 10:27 pm

    As browser for lower privacy brave and for higher needs firefox with appropriate settings.Additionally you need to block flash and some javasript.

    Umatrix or noscript addons can be configured to block font reading from google and facebook tracking.
    On the mobile firefox there is a setting to prevent use of web fonts.
    Then block canvas fingerprinting.
    Block third party cookies and clear your private data frequently.
    Check your settings with ip-check.info or other similar sites.
    This covers the worst trackers but there may be more.
    On a desktop keep an account with lower privacy for online shopping and another with all the settings for privacy.

    • gunthet
      May 18, 2018 at 10:41 pm

      Edit:
      This was intended as reply to Jas from waay up but due to a browser crash ended up here.

  20. Mean Chicken
    May 18, 2018 at 10:56 pm

    “Of the $254 billion spent on advertising in 2017 in the US, online ads obtained a share of 35%.”

    US government Pentagon budget is north of 3x that yet it’s small news apparently and rarely discussed anywhere…..

    • May 18, 2018 at 11:06 pm

      The budget is a once-a-year thing. That’s when it’s covered. We might cover aspects of it a couple more times during the year. After that, the reality of the budget is the increase of the debt, which we cover a few times a year. These things begin to sound a like a broken record if you cover it more often.

      You can see our articles on these topics here:

      https://wolfstreet.com/category/all/debtor-nation/

  21. Auld Kodjer
    May 20, 2018 at 7:36 pm

    “News is what somebody somewhere wants to suppress; all the rest is advertising.”
    – Lord Northcliffe (1865-1922)

  22. Owner
    May 21, 2018 at 8:43 pm

    I’ve been selling online since 1996 (22 years). I’ve NEVER found online advertising cost-effective. 3 companies later, I still find this true. The only people “making money” with online advertiser is the people getting paid to run your ad.

    Ad blockers work great. I don’t bother with them myself and simply never, ever click an ad. I don’t look at them either. Firefox has a “reader” view that will kill all extraneous ads, banners, videos, etc., allowing you to simply view the article text.

    Advertising become stupid expensive (and so did Google) and we stopped advertising years and years ago – and it made NO difference on sales revenue (actual products sold / yearly totals). So we saved a ton of money and stopped advertising totally.

    $18 million dollars later – I don’t see any need to advertise anywhere (or play the stupid keyword / search engine game – it doesn’t work either).

    The people who are paying for ads are suckers for this scam. It’s not necessary and it’s absolutely not cost-effective.

  23. Buck Rogers
    May 22, 2018 at 12:47 pm

    I miss the early days of the ” internet ” when there was NO advertising or Targeted Ads. Today, even or email is being assaulted with advertising. The pervasiveness or ads and invasion of our privacy has gone to far.
    There are NO companies out there, who can be trusted to protect our privacy.
    Only Europe has had the guts to go after those who invade one’s right to privacy.
    Even the VPN services can’t fully eliminate the pervasive and invasive advertising.
    Television now spends almost 12 hours a day slamming us with ” paid advertising “.
    I remember as far back as the 60’s, when we actually were able to watch programming with relatively little advertising interfering with our viewing.
    It’s time to put the BIG DOG KYBOSH on advertising !!!

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