I've run ads for well over a decade: above the line and digital. All media works, to some extent and the main issue is the way marketing teams on the advertiser measure them. I've also run campaigns you'll all have seen or heard of.
Because in Europe no one has made money from consumer facing businesses.
European investors are all ex-banking / private equity spread sheet modelling morons who do not understand risk capital and are looking for risk free bets.
When you have this lens u eschew anything that can harm you holding onto your career. That is why.
B2B businesses have a very clear path to revenue / margin / profit.
A B2C business is effectively a punt, yes a punt, US VCs arent some sort of fucking oracles. If you look at the analysis Social Capital did for who backed the biggest co's at the series a level its effectively spread evenly so there is no "science" here.
There are tens of thousands of money making consumer facing businesses, the division - in my practice - between b2b and b2c is roughly 50/50.
What the USA has that Europe does not have is a huge advantage in terms of one language and currency to be able to address 300M+ people, and if you just look at the language you can add another 45M or so. That's impossible to compete with for anything with network effects or a market to launch a product in.
I think at its core this is basically it. We can argue all day about the differences in culture and mindset, but the most significant advantage the USA has that the EU cannot effectively replicate (yet) is the access to a large, homogeneous single language single currency market from the get go.
The more interesting question would be why are Google and Facebook American and not Chinese or Indian.
>European investors are all ex-banking / private equity spread sheet modelling morons who do not understand risk capital and are looking for risk free bets.
And that's not prudent because?
Why don't you go there with your investment money and show them how it's done?
"Facebook does emotional experiments on you without your direct knowledge or any outside influence. Facebook has been hell-bent on testing to see if it can make hundreds of thousands of people simultaneously depressed. They can do that and they are proud of it."
Evidence please?
There was one test conducted with 600-700k users (out of 2 billion plus). This is negligible and honestly not statistically significant enough.
Plenty of reasonable concerns around political advertising, bad actors, transparancy into who is funding / buying ads are largely things to be concerned about.
However, errant ranting as above is not exactly helpful to this debate.
Also calling $FB not successful is laughable? On what grounds can you actually say this?
There is almost no evidence that the ad product actually influenced america (it was more likely TV). If you need to be educated about advertising i'm happpy to help you here but as someone who does this for a living I can categorically tell you this - the ads did not sway the election based on the pseudo-science bullshit from Wylie, Nix and anyone else in CA.
Your post is one of the more bizarre things I have read on HN.
On the one hand, you ask for evidence. On the other hand, you admit it happened?
Then you suggest that it is not important because it is "not statistically significant enough", as if the numbers you mentioned aren't staggering? That's a bit like saying it wouldn't be significant if Rhode Island fell into the Atlantic because it only affects a tiny percent of people on Earth. Is statistical significance the only significance there is...?
A comment on the study itself, if you're here just for discussion around Facebook please move on:
I think the results of these study are not necessarily surprising. Perhaps the most intriguing bit is this:
> This observation, and the fact that people were more emotionally positive in response to positive emotion updates from their friends, stands in contrast to theories that suggest viewing positive posts by friends on Facebook may somehow affect us negatively, for example, via social comparison (6, 13).
Which I think should be looked at more closely.
Yet, I mean, hasn't this been assumed/understood to be the case about media we consume for a while (the fact it affects our emotional state?) A quick search seems to support the claim that it is widely understood that TV has the same effect [1], and I think it's been known (or at least assumed) for a while that the emotional content of other broadcasting media can have deep effect on our emotional state. During the War radio and posters were used to keep populations calm (ie, "Keep Calm and Carry On") or angry. Today Fox News, CNN (most media companies actually) try to keep you scared and mad.
I'd say in that sense the results are not very surprising, though it's interesting to think of this in the context of the internet, because internet communication is two-way and and actors are small. Rather than being a single big broadcaster reaching all nodes, social networks are more federated and clique-y. This could imply a self-enforcing network effect. If the network's collective feelings affect each individual's, it's not hard to imagine the effective reduced positivity further worsening the mood of the collective in a vicious cycle, or the opposite. The same "rich gets richer" effect should apply for positive emotions too.
Idk, I personally thing that's kinda crazy, and would like to learn more about it, where the critical points lie, and how these effects might spread across a broader network. Would the positive and negative one tend to cancel each other out?
If you look at Figure 1, I have to wonder if the difference seen in the chart on quadrant one (Positive words / Positivity reduced) being larger than the delta on the other charts means anything for this natural evolution and network effect. Is this just an artifact of the way things are measured, or does it go deeper into our psyche?
Are you really justifying making hundreds of thousands of people depressed, just because they didn't make millions of people depressed? The distances people will go here to defend Facebook are literally insane.
Making even one single person depressed on purpose is 100% pure evil. Hundreds of thousands of people depressed is a massive crime against humanity. There are sources all over the internet for this. Also I do not think Facebook had 2B+ users in 2014 or so when the "study" to hurt people was done - but that doesn't matter anyway.
> This is negligible and honestly not statistically significant enough.
300,000 depressed people doesn't matter to you? It's not statistically significant? What do you even mean by this? This is literally the most offensive thing I have ever read in my life.
> Also calling $FB not successful is laughable? On what grounds can you actually say this?
Yes I am. On the grounds that it is based on revenue from stolen money, illegally gotten gains through criminal behaviour and morally wrong actions. Not only that it is dirty money driving that price up, but it's so early in FB's days it doesn't make sense to call the stock successful yet.
For the nth time, would you please stop posting overwrought rants to HN? Few people would disagree with you that this is an important topic and I imagine most of us mostly agree with your views. But that's obviously not as important as preserving this place for substantive discussion, and what you're doing breaks it badly.
We need you to stop this habit of going beyond the pale if you want to keep commenting here. We like you and don't want to ban you but if you keep ignoring our warnings and requests about breaking the site guidelines, what choice are we going to have? So please fix this.
In case it helps, here is how I have tried to fix this in my own case: (1) notice when my system is agitated; (2) don't post until I am less agitated; (3) go over my comment after it's up and edit out any leftovers.
I've worked on every single vertical and 3rd party data / Partner Categories is rarely used by big or small advertisers a like.
The cost of the advertising increases i.e. higher CPMs for using this data. I've spent north of $40ml across all digital ads with a large chunk being on $FB and it isn't the main kind of targeting that is used and its the most expensive kind as well.
I am not hugely convinced this will dramatically affect $FB given there are so many other targeting options out there it isn't much of a concern in my eyes just a shame this is one avenue that will now be closed but its one of so many marketers can use.
"Probably going out of business due to a lack of revenue."
No. This isn't really that true, the business has placed a great deal of investment on the following: hiring sales people, partnering with measurement (millward brown, nielsen) selling ads like crazy at a premium to the largest F500 brands in the world.
The biggest content creators, celebrities and normals are on the platform. They are creating new forms of expression which have been copied by incumbents namely Instagram.
They have made their first steps into hardware with spectacles which have generated similar type of hype as Yeezys.
So your arguments are not strong enough, its actually laughable you think it lacks revenue. When the S-1 document is public and the gross margins and employee count are revealed we'll see all the risk factors clearly.
Given that the founders most likely own most of the stock, this is a company that is definitely going to succeed as so many people want to work with them.
For an internet marketer you are woefully off the mark with comments like the above.
> The biggest content creators, celebrities and normals are on the platform.
So does twitter and they are losing money every quarter. I can see snap becoming the next FB or the next twitter but I will definitely be betting on the latter due to the lack of data.
> Given that the founders most likely own most of the stock, this is a company that is definitely going to succeed as so many people want to work with them.
Companies where the founders own a large % of the stock will tend to do better. This will play out more strongly across all sectors over the long-term.
Also, given that I am a target customer that interacts with Snapchat and runs their ads and invests reasonably heavily I am better placed to judge than you are.
The ad products need a lot of work, no doubt about it, but the engagement and earned media generated is super high for a product that doesnt have a biddable solution in place just yet. My clients would agree with me.
The lack of data is being worked on, as I mentioned there are partnerships with Millward Brown and Nielsen. The business will also end up buying 3rd party data and matching it against its user base in order to provide a competitive solution to FB.
The difference is Snapchat doesn't want to collect every single datapoint about a user like FB does.
Despite a set of ad products that are far from the best they can be, this hasnt stopped advertisers wwanting to use the platform for campaigns. Early results are very positive and improvements will come leaps and bounds. Plenty of my most talented peers / colleagues have recently joined snapchat. They wouldn't if the company wasn't doing well, it is.
I am betting it will succeed where Twitter has sadly failed based on the fact it has created a completely different form of communication and expression.
There may be brands looking to drive awareness, like a P&G or Coke or Nike looking to sell you more crap, but advertisers who care about driving sales, measurable sales are not going to be using the platform.
As a marketer for a F25, the platform is a joke.
Awareness, as I mentioned. But the TV medium is dying. Internet marketing is thriving b/c of the ability to target users/consumers with the right ads, at the right time...when you don't have am option to do that, then it falls apart.
Meanwhile for companies like FB, who mine every aspect of your life, the service is now valued at over $300Billion
Do you know how to read 3 financial statements because this is a well run business that not only is printing money but it has created so much economic value around the world via jobs it has created in other industries.
"Substaining a company on advertising is a dead model"
A Deloitte report explained FB has created $40bn of economic value across the world. Let me explain to you how:
- People are selling shit on social all day everyday
- Every organisation markets themselves using social
- social media is where most attention on mobile is
- All social media platforms make ads
- Ads are charged on CPM (Cost per 1000)
- Trillions of impressions are served, therefore billions of ad dollars flow to the platform, billions with a b
- All these businesses have 100s of millions if not billions in cash on their balance sheets
For the record these ad products have kept 1000s of people in advertising jobs around the world and helped around 3 million advertisers spending billions collectively sell shit online.
Computers and the internet are relatively new, compared to advertising. The ad-blocking era is only about 5 years old.
Give it time, you will see that I am right.
Again, facebook is not a social product. Facebook is a portal product with a social feature. They're not competing with Twitter, they're competing with Google and Microsoft. It is apples and oranges.
All sorts of very mis guided comments below. Here are some points:
1/ Im an advertiser I can tell you that big brands still love the platform (and spend heavily)
2/ Revenue is $2bn+ a year, how is this not successful?
3/ Balance sheet has $1bn+
4/ NFL deal is huge, ditto bloomberg streaming
5/ Product needs to ship much quicker than Facebook does to stay relevant
6/ It is the only place that has nailed real time properly, if there is a bomb in a major city you will hear it first on twitter no where else has this edge, nowhere
7/ The worlds most important people are on this platform and readily accessible in most cases, not true on FB in terms of accessibility
8/ 80% Gross Margin business
9/ Needs to stay independent and ramp up advertising spend once logged out tweets ad product rolls out
10/ True reach of Twitter is almost 1bn users when we consider tweets appearing on TV, off the platform, in newspapers etc. This is comparable to FB
Some of the ignorant stuff people are saying about all the employees is disrespectful.
WhatsApp and IG when they were acquired were making very little money, if they had stayed independent and no one acquired them they would not be running today (they would exhaust the capital chain). WhatsApp maybe was making £10ml a year but was losing money; IG was making £0. I can tell you with certainty if they were independent and around today the growth would be stalling and there is a high chance they would not be able to continue raising venture money, it is very easy to grow products to 1bn users when you add FB growth's team which is best in class to an already solid product.
Twitter has been generating solid revenue from around 2009/10 (someone correct me if im off here) and big brands love it and there is lots of data I have seen to support the value to advertisers around the world.
Twitter does however need to tell its story a lot better afterall a Tweet means many different things to many people, its just not as easy to communicate as Facebook to an outside but this doesn't mean it is not valuable or should not exist independently.
> 2/ Revenue is $2bn+ a year, how is this not successful?
It's not successful because their expenses are $2.6 billion a year which exceeds the revenue of $2.2 billion collected.[1]
This means they lost $450 million. They have no profits. They've never had a profitable year. In short, if you spend more than you make, you're not financially successful.
Why do many people think companies like Twitter and Spotify (also $2 billion revenue and still losing money) are "successful" ?!? I'm guessing the confusion happens because observers don't understand the difference between revenue and profit.
Is there a breakdown somewhere of where those costs are coming from and what they can probably knock out to hit profitable? It's only a few, hundred million over revenue. I mean, that's a big problem but I've seen rebounds from worse when better management came along.
So the idea it is a scam is stupid.