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 via the “Contact” tab.)
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 browser, 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…