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Comment by falling | Hacker News Reader

I think this blind faith in Google to be a bit weird.

I still find unbelievable they can make that much money just with ads – I do believe they do, it just befuddles me – on a phone it's even harder to display them and in fact you don't see as many in the mobile web, are we really sure that Android is profitable? Maybe it's not yet and they're still trying to find the business model for it. Maybe it will never directly be, it will just serve as measure to not be excluded from the mobile world and keep competitors (not derogatory) from eating into Google.

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Average click through rates on mobile are almost 9 time that on the web (in Australia, anyway) - see Fact #4 on http://www.aimia.com.au/enews/iab/Website/FINAL%20-%20Mobile...

> I still find unbelievable they can make that much money just with ads

I do as well, and wish there were more research available on internet advertising. I'm sure a few companies at the top of the pyramid make money, but everyone else (IMNSHO) is taking money out of their left pocket and putting it into their right pocket (A buys ads on B, B buys ads on C, [...] Z buys ads on A; in the end, a zero-sum game).

I'm sure we'll be shouted down, but you're not alone in your opinion.

I do as well, and wish there were more research available on internet advertising

Have you actually looked? It's one of the most actively researched fields in the world at the moment.

Try http://www.iab.net/insights_research to start.

I'm sure a few companies at the top of the pyramid make money

This is absolutely, completely untrue. One of the reasons internet advertising is so popular is because its effectiveness can be proven - advertising companies can show how people exposed to ads buy at a higher rate. The improvement in rate can be calculated exactly, which shows the advertiser exactly how much they should spend.

Take a look at http://www.aimia.com.au/enews/IAB/IAB%20Retail%20Study%20-%2... (skip to roughly half way thorough).

There they promoted a new product in one market exclusively online, and did no promotion in the other market. Sales in the promoted market were 11% higher than the control.

Don't believe it? Try it yourself - I wanted to understand it better, so signed up for an affiliate account and did some Facebook advertising. It worked quite well - I was able to make around $15 for every $1 spent (obviously this was a very specific market segment).

You should have chosen an unbiased source to prove your point.

http://www.iab.net/about_the_iab

"The Interactive Advertising Bureau (IAB) is comprised of more than 500 leading media and technology companies that are responsible for selling 86% of online advertising in the United States."

Aside from anecdotal evidence (your returns of 15:1) I haven't found any long-term studies done by independent researchers that prove internet advertising is any more effective than other forms of advertising, if it's effective at all. The only real accomplishment internet advertisers can lay claim to is training the general population to never even glance at the left / right / top / bottom navs on a page.

In general, the poll results and comments in another recent thread on HN on ad blockers (http://news.ycombinator.com/item?id=3324709) seem to support my theories about how ineffective internet advertising is. I'd be interested in seeing some untainted long-term research on this subject.

I've personally suspected for a long time that advertising was in for a huge disruption. Either people will realize they're not getting the value they think they are or some company will realize that 10% of what Google makes is still a ton of money and undercut them heavily. Then all these business plans that rely on "give it away and make it up with ads!" will fall on their ear.

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