As far as I understand how things like facebook or reddit work they:
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offer an unpaid service to mass consumer
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harvest data of the people who use the service
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offer paid advertisement space to companies
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companies buy advertising because the vast data promise precise targeting
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precisely targeted ads convert into sales for companies
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the ROI (profit gained to cost of ads) when buying social media ads is greater than ROI on tv or whatever other ads
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social media expand on the profits gained from ad space sold to companies
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social media corp announces a brand new feature and we return to point 1)
Which step is the closest to breaking? Where are limits of growth and who hits them first? Is there a cap on marketing budgets beyond which companies won’t afford social media ads and tech corps won’t afford expansion and maintenance? A cap on how much data (=how precise ads) can they harvest from us? A lower threshold of general wealth below which ads won’t convert into more profit because people are too poor? A breaking point of enshittification at which user count (=ad visibility) plummets?
The recent apeshit of tech companies after the raised interest rates made me feel that the entire thing is quite fragile and ripe for falling… But I’m not a financial advice so maybe I’m completely clueless.
I really don’t understand the massive ad spend from most companies. I’m a bit of a minimalist. I have like the Ron Swanson “people who buy things are suckers” mentality. I buy wood, material, tools and occasionally computer parts. Outside of shoes most of my clothes are 5+ years old and most of my shoes are too.
All that to say, I guess I’m an outlier. I haven’t clocked on and bought anything from an ad that I can ever remember and I’ve been living a life very lacking in consumer disposable goods that they push for going on a decade ago this point.
I don’t understand anyone who doesn’t do extensive research and buy the best product in their price range on any purchase these days. If I do need to buy something I probably average an hour of research on any product I spent over $100 on and far more on anything over $1,000. Astroturfing YouTube reviews and forums would be more effective than ads on my purchase decisions. Which they do too, but they’re normally pretty easy to spot.
I don’t understand anyone who doesn’t do extensive research and buy the best product in their price range on any purchase these days
While I subscribe to your worldview significantly, a lot of people buy for personal prestige, and a lot of what is being advertised on social media consists of vanity and luxury products.
Virtually no one is buying Air Jordans primarily because of their comfort and durability, however durable and comfortable they might be.
Advertising and marketing is about creating a story. Coke will spend a billion on the story that a coke add in your feed, and one during the game, will get you to buy a coke at the gas station on your road trip or something.
Social media, and the internet in general, also provided better targeting and reports than ever before. They get tons of advertising money because they can make a report that the ad was seen X times and clicked Y times, that makes their advertisers happy.
It’s just a newer form of publishing. A quick Google, which is just a yellow pages with search, says 1488
Outdoor advertising still works. TV ads still work. Social media advertising won’t collapse. It may become less effective if legislation moves towards greater privacy protection but it’ll still be effective.
It stops as soon as we all start calling it what it really is: stalking. If this makes it into the public consciousness, it will end the ads based internet. Europe is already on board by their policies. The English word stalking is the most simple and powerful tool possible. It is black and white politics, and there is no effective countermeasure. No politician can run on a platform of I support stalkers. It is all about the wording and how arguments are phrased. It really is that simple. It is following people around collecting information and looking for opportunities to exploit people. Two or more parties colluding to exploit a person is irrelevant to the cause and effect. This is not about showing you banner ads. This is about shaping your echo chamber and the products and prices you see. It is all about exploitation and manipulation; stalking.
We had a politician when who made statements like I could stand in the middle of 5th avenue and shoot somebody dead and no one would do anything about it.
There are a reasonable number of people out there who would follow a politician to their death who said Don’t mind those stalkers it’s fine.
Newspapers, radio, television, internet, ???
???
The answer may surprise you: fax machines
Closest thing to breaking the business model is the data harvesting that makes targeted ads so profitable.
We’ve already seen Apple’s tracking restrictions hurt meta a lot. As governments, and companies that don’t have big ad businesses, continue to restrict tracking, that limits the growth of ad businesses.
