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Comment by manigandham | Hacker News Reader

This article, as usual, has no idea what it's talking about.

The first issue is that ad auctions are 2nd price, meaning that if an advertiser bids really high, they still only pay the 2nd-highest bid + $0.01. Of course the publishers wouldn't realize much from this. Second major issue is cookies and scale. You can't get high-value bids if advertisers can't recognize those users.

The industry is slowly moving toward quais-first-price but scale is a fundamental problem, which is again why Facebook, Google, and now Amazon get all the money and do really well with behavior targeting while even big publishers struggle. Add in the new privacy regulations and this will only further widen that gap.

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> This article, as usual, has no idea what it's talking about.

Are you talking about the article or the paper? The paper is published at the Workshop on the Economics of Information Security (WEIS) with the conference char being people like Bruce Schneier. Besides, the author is Alessandro Acquisti and the details of their experiments are well outlined in the paper.

I understand that you see challenges, issues with their methods but you need to perform your own experiments and make a sound argument to make any strong statement. I'd be very cautious before I make a casual remark at a well conducted study. The study may have limitations but this doesn't mean the conclusions of the study are invalid.

There is immense variation in programmatic ad pricing by publisher. Drawing conclusions about the market as a whole, or about publishers not exactly like the one studied, would be a mistake.

The article is what I said, but the paper isn't great either. Are those names supposed to mean something? The chair of the conference that the study is presented at is absolutely irrelevant, and I don't need to conduct my own experiments to discuss flaws in the process.

This wasn't a scientific study, nor is it well-conducted, because they looked at a single publisher over the course of a week in 2016 and are drawing conclusions for the entire market when they don't understand how big the market is and how the programmatic supply chain works. People in adtech deal with petabytes of data everyday. The fact that publishers don't see much revenue lift from behavioral targeting isn't a surprise, the whole industry knows it. So the study isn't completely wrong, but just looking at small picture that ends up aligning with the larger truth.

Why the rev is low isn't covered by the study, but the article tries to come up with an explanation. This is incorrect, which is what I cover in my first comment.

Agree that tfa is clueless. However even second price auctions cannot explain the data they claim to see. Any ad exchange these days has data showing publisher revenue delta of far more than 4% for cookie-able browsers.

It's not just oba... much of the non-oba demand running through programmatic requires a "cookie" for frequency capping or just basic anti-fraud.

Disclosure: work in industry; am biased.

Well the data here is also small and suspect. They need to separate mobile browsers and GDPR/EU regions that aren't available for OBA targeting anyway.

That's why I said scale (reach + cookies) is the fundamental problem.

Agree. It's absurd how many conclusions have been drawn from one flawed study of a single publisher.

GDPR/EU sounds like a natural control.

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