Adblock, and others like it will ruin the internet for all.

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Re: Adblock, and others like it will ruin the internet for all.

Postby Guest » Sat Apr 21, 2012 2:06 am

How is that relevant? A working family could save a grand if we didn't have this insane and irrational advertising culture pushing up the prices of everything. Not only would that money not be squandered, a culture of research-based buying would produce better overall decisions and make quality, not image or style, the most important buying concern.
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Re: Adblock, and others like it will ruin the internet for all.

Postby lewisje » Sat Apr 21, 2012 5:02 am

The family may well be able to save money by buying a car that isn't advertised, but how would this family be aware of what is available?

Also, I should mention that unless the price elasticity of demand for car buyers is 0, not all of the costs for things like advertising, R&D, taxes, etc. will be passed on to the consumer; a formal derivation follows for the two illustrative special cases of the constant-elasticity model and the linear model.

As a reminder, elasticity of a dependent variable with respect to an independent variable is the derivative divided by the ratio, or in the case of quantity Q and price P, it's (dQ/dP)/(Q/P); for constant elasticity E, this equation becomes (dQ/dP)/(Q/P)=E, which can be rewritten as dQ/dP=E*Q/P, in which the variables may be separated as dQ/Q=E*dP/P, which may be integrated as ln|Q|=E*ln|P|+C (where C is an arbitrary constant), which finally may be rewritten as Q=A*P^E, where A is an arbitrary constant.
In short, a curve of constant elasticity is a multiple of a power function.

With that in mind, let the price elasticities of supply and demand be S and -D, respectively, where S and D are non-negative; then the equations of the supply and demand curves look like Q=A*P^S and Q=B*P^-D, with equilibrium price given by dividing equations as 1=(A/B)Pe^(S+D), solved as Pe=(B/A)^(1/(S+D)). Then by back-substitution, equilibrium quantity is Qe=A*(B/A)^(S/(S+D)), which can be simplified as Qe=A^(D/(S+D))*B^(S/(S+D)) and further as Qe=A^(1/(1+S/D))*B^(1/(1+D/S)).
Upon the imposition of a tax at rate R (levied exclusively, as in a state sales tax), the supply curve is shifted up, by replacing P with P/(1+R), so that Q=A*P^S/(1+R)^S; equivalently this is like replacing A with A/(1+R)^S, so that the new equilibrium price is ((1+R)^S*B/A)^(1/(S+D)), simplified as (1+R)^(S/(S+D))*(B/A)^(1/(S+D)), and further as Pn=(1+R)^(1/(1+D/S))*Pe. Similarly, the new equilibrium quantity is Qn=Qe/(1+R)^(1/(1/S+1/D)). From this, two conclusions can be reached: First, because S and D are both non-negative, (1+R)^(1/(1/S+1/D)) is not less than 1, so that Qn is not more than Qe, with equality reached only if D=0 or S=0. Similarly, (1+R)^(1/(1+D/S)) is not less than 1, so that Pn is not less than Pe, with equality reached only if D=infinity or S=0.
More importantly, note that the portion of the new equilibrium price taken by the manufacturer is Pn/(1+R)=(1+R)^(-D/(S+D))*Pe=Pe/(1+R)^(1/(1+S/D)), which is not more than Pe, with equality reached only if D=0 or S=infinity; this means that for all practical purposes, the manufacturer will take a hit, and in the special case where S=D, the manufacturer takes the same proportional hit as the consumer, although smaller in absolute value, as the previously calculated value simplifies to Pe/sqrt(1+R), and Pn (new price paid by consumer) is sqrt(1+R)Pe.

Now instead let a constant fee of size C (analogous to the concept of spending $1000 per car on advertising) be imposed on the purchaser of the item; this shifts the supply curve up by replacing P with (P-C), so that Q=A*(P-C)^S; generally the two equations cannot be solved, but in the special case D=S, elimination yields 1=(A/B)*(Pc^2-C*Pc)^S, so that Pc^2-C*Pc-(B/A)^(1/S)=0, so that Pc=(C+sqrt(C^2+4(B/A)^(1/S)))/2. Remember that in this case, before the fee was levied, the equilibrium price was Pe=sqrt((B/A)^(1/S)).
To help compare Pc and Pe, let us see under what conditions Pc=Pe: Then, sqrt(C^2+4(B/A)^(1/S))=2sqrt((B/A)^(1/S))-C, and squaring both sides yields C^2+4(B/A)^(1/S)=4(B/A)^(1/S)-4sqrt(B/A)^(1/S)C+C^2, from which it follows that either B=0, A=infinity, B<A and S=0, or C=0. Of these only the C=0 case is non-degenerate, and in general the right side is actually less than the left, and because throughout the left side of the equation remained positive, it can be seen that in fact Pc>Pe, as expected. Additionally, it can graphically be seen that Pc-Pe<C, but an algebraic derivation is generally difficult.


Although less realistic, a linear model is easier to work with for the case of the constant fee; let the supply equation be Q=B*P-A, and the demand equation be Q=K-L*P, where all parameters are non-negative. Then subtraction leads to K-L*Pe=B*Pe-A, so that A+K=(B+L)Pe, so Pe=(A+K)/(B+L), and by back-substitution, Qe=(A+K)B/(B+L)-A, which can be simplified as ((A+K)B-(B+L)A)/(B+L), and more fully as Qe=(K*B-A*L)/(B+L).
Then if a constant fee of size C is imposed, the supply curve is shifted upward by replacing P with (P-C), so that Q=B*(P-C)-A=B*P-B*C-A, so this is equivalent to replacing A with (A+B*C), leading to Pc=(A+B*C+K)/(B+L)=Pe+B*C/(B+L) or equivalently Pe+C/(1+L/B); unless L=0 (perfectly inelastic demand) or B=infinity (perfectly elastic supply), this shift is not equal to the full amount of the fee. The new equilibrium quantity is Qc=(K*B-A*L-B*C*L)/(B+L)=Qe-B*C*L/(B+L), or equivalently Qe-C/(1/B+1/L); unless B=0 or L=0, this will be less than Qe, as expected.

Now if instead a tax at rate R is imposed, the supply curve is shifted by replacing P with P/(1+R), so that Q=B*P/(1+R)-A, so this is equivalent to replacing B with B/(1+R), leading to Pn=(A+K)/(B/(1+R)+L), which is more than Pe; the portion kept by the manufacturer is Pn/(1+R)=(A+K)/(B+(1+R)L), which is less than Pe. Also, Qn=(K*B/(1+R)-A*L)/(B/(1+R)+L), which is less than Qe, although again the derivation is messy.


All of this would become more understandable if I pulled out actual econometric figures for price elasticities for automobiles, but basically, don't assume that the whole advertising budget for automotive manufacturers comes out of the consumers' pockets; instead, if it were possible to keep the same level of demand but not advertise, the car companies would sell more cars without it, at higher revenues to themselves and lower costs to consumers, although with neither shift being as great as the cost of advertising foregone.

Of course, advertising actually does help to spark and maintain demand for automobiles, not so much in a subliminal or otherwise subversive manner but rather by means of constant awareness of the options...at least the options of the manufacturers who heavily advertise; without it, it is likely that few companies would be able to recoup the sunk R&D and capital costs involved in manufacturing automobiles, and there would be few cars to choose from, and in this sense, money spent on advertising is not "squandered."

P.S.: My point in my earlier post was that advertising is small compared to the price of a new car, and by the reasoning earlier in this post, its relative contribution to the final price is smaller still.

P.P.S.: There actually are numerous entities who evaluate the quality of cars in an unbiased manner; have you ever heard of Consumers Union, publishers of Consumer Reports? There is an impetus toward the common good in this manner, it's just not in the short-term interest of the manufacturers themselves to pursue it; they wouldn't even come clean on quality if they were barred from advertising, so I fail to see your point about what could be done in the absence of auto advertising.
In short: Learn economics, n00b!
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Re: Adblock, and others like it will ruin the internet for all.

Postby Guest » Sat Apr 21, 2012 5:17 am

lewisje wrote:The family may well be able to save money by buying a car that isn't advertised, but how would this family be aware of what is available?


Research - as in, actual work, not sitting in front of the idiot box letting marketing departments tell you what you are supposed to want.

The Internet allows people to obtain actual information on the goods and services they buy. Thanks to the wealth of information on the Internet, potential buyers can access objective, unbiased information, something NEVER found in an advertisement.

Advertisements these days are mostly devoid of information, and what little information they do have is biased and untrustworthy. Everything is now platinum, five star, best in class, etc. These terms have lost all meaning.

lewisje wrote:Also, I should mention that unless the price elasticity of demand for car buyers is 0, not all of the costs for things like advertising, R&D, taxes, etc. will be passed on to the consumer; a formal derivation follows for the two illustrative special cases of the constant-elasticity model and the linear model.

...

In short: Learn economics, n00b!


Put down the textbook and step into the real world. The $1000 comes from somewhere; TANSTAAFL. It wouldn't be spent if it didn't produce a positive return.

The ultimate collective idiocy was the billions spent on the cola wars. How hard is it for people to buy one of each and decide which they prefer? Why did billions of dollars need to be flushed away on meaningless advertising noise?
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Re: Adblock, and others like it will ruin the internet for all.

Postby Silico » Mon Apr 23, 2012 2:55 am

The Internet allows people to obtain actual information on the goods and services they buy. Thanks to the wealth of information on the Internet, potential buyers can access objective, unbiased information, something NEVER found in an advertisement.


Where does this information come from? Car dealers only want to sell you particular cars. A car maker's website is essentially one big ad. Most independent motoring media is substantially ad-funded, particularly material on the Web. And if you're relying on the advice of "friends", most of this will either be anecdotal or derived from that same ad-supported media -- not to mention the ad-supported platforms for interacting with them.

You get the most unbiased advice when you pay its full cost: hiring a car broker, paying for an ad-free report or magazine, or relying substantially on your own first-hand research (a lot of work). Are you willing to do this?

I think advertising has its role in circumstances where enough independent sources of information and advice aren't available. Even then, product makers will always be trying to use advertising to create a reality distortion field that allows them to sell more at a higher price than they otherwise would.

The problem is the demand for this advertising, and I agree with you that interrupting people's consumption of media is one of the silliest ways of delivering it. People are giving such ads less and less attention. This, combined with the advent of saner demand-driven ad delivery methods such as search advertising and company websites, is causing a drop-off in demand for ads inserted in media. This has driven them to make ads more numerous and intrusive, creating a death-spiral.

Media has begun to realise that they will no longer be able to run on advertising. Big media is currently attempting to move to subscriptions, but the diversity the net has given us will make this bundling only work for a few big players.

What's the solution then? We don't want to see the media sacrificing its independence by publishing more "sponsored articles", and by resorting to selling the products they're writing about.

I think micropayments are part of the solution, but there are also other ways.
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Re: Adblock, and others like it will ruin the internet for all.

Postby Guest » Mon Apr 23, 2012 4:12 am

You answered your own question. The ad model is beginning to hit its limits. Subscriptions and micropayments are gaining traction. Although there are privacy and hassle issues with having to give billing information out for every small payment, the market is ripe for innovation.

Publications such as Consumer Reports use subscription fees to fund independent evaluation.

Vehicle manufacturers can be trusted for certain types of uncontroversial, quantifiable information, such as cargo room or fuel economy. Any lying here would make for an easy class action lawsuit.

Insurers have a vested interest in reducing automobile injuries. They can be trusted as a source of independent safety information.

Why can't a publication like Edmund's move to a subscription model if people should begin to wake up and take notice of the poisonous effect of advertising? An independent vault of comparative and verifiably true information on a purchase as large as a vehicle would be worth far more than a micropayment, considering the magnitude of the purchase. Would you pay $50 or $100 for access to a wealth of vehicle information to help your purchase? Any rational person would, since they're already paying on the order of $1000 to receive biased and polluted advertising.

Even if advertisers acted with a responsible and scientific mindset, there is only so much factual information which can be packed into a 30 second commercial or a banner ad. Advertisers can't be trusted, and the limitations of the format have led to the abandonment of facts in favor of emotional appeals, such as footage of a vehicle driving, a celebrity endorsement, or meaningless buzzwords (i.e., "best in class").

Vehicles with severe manufacturing or design flaws will be outed through interactive media. When I research a purchase, I look less at people singing praise, and more for individuals reporting bad experiences, to see if those problems are outliers or to be expected.

Right now, the advertising culture causes us to pay more money to make poorer decisions. This is why it is essential that, to bring about more rational behavior in the public, unsolicited advertising be totally blocked and ignored. When marketers lose their grip over the public's emotions then engineers will have to step up to the plate to satisfy a rational customer's mind.

If some Internet content farms are ruined by ad blocking, then so be it. As it stands now, advertising is ruining the Internet and our culture at large.

This formed the basis of my objection to the non-intrusive ads being set as enabled by default. The flashing in a banner is annoying, but the effects of the banner itself are worse than any gif.
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Re: Adblock, and others like it will ruin the internet for all.

Postby Guest » Mon Apr 23, 2012 4:23 am

I'm using automobiles as an example due to their status as a large and mostly wants-driven purchase. This is where research is most important.

A trivial purchase like a frozen pizza brand needs no advertising and can benefit from only a basic scan of other people's opinions. The easiest way to determine your preference in frozen pizzas is to try a variety of frozen pizzas. Letting frozen pizza producers interrupt desired content with their meaningless brand messages is completely unnecessary and unproductive.

The problem we have is that too many people fall for the advertising. Even normally rational people might begin buying into lies, mistruths, or opinions if those messages are repeated often enough.

Advertising is there because people respond to it, and people will respond to it because it is there.

Breaking the catch-22 requires a kill switch for the advertising. The situation will improve when somebody's rational mind can make a conscious decision to unplug their subconscious mind from the effects of advertising. This is where tools like ABP become so valuable.

Change requires a shift in our culture. Right now, we allow advertisers to tell us what are problems are and how they think we should solve them. We need to begin identifying our own problems then identifying the best way to solve those problems. Step one is the elimination of advertising from our lives, one person at a time.
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Re: Adblock, and others like it will ruin the internet for all.

Postby lewisje » Mon Apr 23, 2012 11:13 am

Guest wrote:micropayments are gaining traction
This must be stopped, or all Internet users will be nickel-and-dimed just to browse.
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Re: Adblock, and others like it will ruin the internet for all.

Postby Silico » Mon Apr 23, 2012 7:03 pm

[Micropayments] must be stopped, or all Internet users will be nickel-and-dimed just to browse.


Non-advertising funding methods are going to expand whether we like it or not because, whether blocked or unblocked, people just aren't being sufficiently influenced by ads inserted into online media (unless they're part of an explicit search).

I'd rather be nickel-and-dimed rather than being forced to pay for a bundle of articles, services, or TV programs, when I'm only interested in a tiny fraction.

Micropayments seem to be working OK in the world of mobile apps.
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Re: Adblock, and others like it will ruin the internet for all.

Postby lewisje » Mon Apr 23, 2012 8:50 pm

Silico wrote:Micropayments seem to be working OK in the world of mobile apps.
There's a difference between in-app payments and having money be slowly deducted from your account as you browse the Web.
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Re: Adblock, and others like it will ruin the internet for all.

Postby Silico » Mon Apr 23, 2012 9:15 pm

Guest wrote:Why can't a publication like Edmund's move to a subscription model if people should begin to wake up and take notice of the poisonous effect of advertising? An independent vault of comparative and verifiably true information on a purchase as large as a vehicle would be worth far more than a micropayment, considering the magnitude of the purchase. Would you pay $50 or $100 for access to a wealth of vehicle information to help your purchase? Any rational person would, since they're already paying on the order of $1000 to receive biased and polluted advertising.


Realizing that it's hard to get someone to pay up-front for information of uncertain utility, Consumer Reports now has both ads and affiliate links on its website. They're lucky that years of building trust through subscriptions has allowed them to get away with this for now. But I wouldn't be surprised to see them start charging either a small per-article fee (like an easy-to-buy 99c app), or a larger charge as you suggest for access to a category-specific archive.

Guest wrote:Advertisers can't be trusted, and the limitations of the format have led to the abandonment of facts in favor of emotional appeals, such as footage of a vehicle driving, a celebrity endorsement, or meaningless buzzwords (i.e., "best in class").


Psychologists have found that people shop more emotionally than they believe, tending to use research to justify to themselves a choice they've already made emotionally. Advertisers will continue to exploit this, but it will come less and less from ads that surround media, which is what we're concerned about here.
Last edited by Silico on Mon Apr 23, 2012 9:50 pm, edited 1 time in total.
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Re: Adblock, and others like it will ruin the internet for all.

Postby Silico » Mon Apr 23, 2012 9:36 pm

Guest wrote:A trivial purchase like a frozen pizza brand needs no advertising and can benefit from only a basic scan of other people's opinions. The easiest way to determine your preference in frozen pizzas is to try a variety of frozen pizzas. Letting frozen pizza producers interrupt desired content with their meaningless brand messages is completely unnecessary and unproductive.


Advertising's best feature is that it gives businesses the freedom to tell you what's out there. It's just that there's better ways than through interrupting media consumption: point of sale, catalogs and flyers, mentions in editorial, and non-distracting media placements (particularly in classified sections that people can choose to browse).

One other problem with ad-funded media is that it gives publications an incentive to hold back on the information provided in their editorial, "leaving room" for advertisers to say more.
Last edited by Silico on Mon Apr 23, 2012 9:47 pm, edited 1 time in total.
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Re: Adblock, and others like it will ruin the internet for all.

Postby Silico » Mon Apr 23, 2012 9:44 pm

lewisje wrote:
Silico wrote:Micropayments seem to be working OK in the world of mobile apps.
There's a difference between in-app payments and having money be slowly deducted from your account as you browse the Web.


Pay-to-browse will be an end-game thing. Before that only premium material and services will be charged.

In any case, pay-to-browse is workable if people can set up white lists for particular maximum charges on particular sites, with itemized billing just like a phone account.
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Re: Adblock, and others like it will ruin the internet for all.

Postby lewisje » Mon Apr 23, 2012 11:50 pm

Silico wrote:
lewisje wrote:
Silico wrote:Micropayments seem to be working OK in the world of mobile apps.
There's a difference between in-app payments and having money be slowly deducted from your account as you browse the Web.


Pay-to-browse will be an end-game thing. Before that only premium material and services will be charged.

In any case, pay-to-browse is workable if people can set up white lists for particular maximum charges on particular sites, with itemized billing just like a phone account.
THIS
MUST
BE
STOPPED

Let's keep the free ad-supported Web, where the only major charges are for access and (maybe) data, not each pageview or something...
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Re: Adblock, and others like it will ruin the internet for all.

Postby Silico » Tue Apr 24, 2012 1:10 am

lewisje wrote:Let's keep the free ad-supported Web, where the only major charges are for access and (maybe) data, not each pageview or something...


This is only feasible if most people's shopping habits are highly influenced by ads in online media, especially for high-value high-margin purchases. Do you fall into this category, or are you relying on remaining a minority exception?
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Re: Adblock, and others like it will ruin the internet for all.

Postby lewisje » Tue Apr 24, 2012 5:51 am

Silico wrote:
lewisje wrote:Let's keep the free ad-supported Web, where the only major charges are for access and (maybe) data, not each pageview or something...
This is only feasible if most people's shopping habits are highly influenced by ads in online media, especially for high-value high-margin purchases. Do you fall into this category, or are you relying on remaining a minority exception?
Ironically I, like most fervent ABP users, am in the minority, else the future you either desire or merely regard inevitable would have already come.
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