That Paul is now in here saying that ad buyers know less than him is so perfect. If you can't figure out why you can't win buying ads it's because someone else does it better. Nobody is bidding up the ad buys in bulk to lose money.
And as thommy mentioned, some companies look 40 years into the future. I looked forever for an article on 1-800 Flowers I think it was but when I was in that space and researching Adwords costs their model was to spend something like $40 or $50 to acquire a new customer knowing that they would sell them flowers on multiple holidays over multiple years. They lost their ass on the first sale just like Dollar Shave Club and a million others. Even Facebook and similar use that model, take market share then laugh to the bank. And in the flowers example it might have been multiples higher, was like 15 years ago I had all of that data on hand.
It's also why Paul thinks it's stupid to pay affiliates 50% or a high PPS. He doesn't comprehend the ancillary benefits of owning the site nor does he factor in long term revenue. Hell a lot of companies factored in that once they quit paying affiliates 3 years later they'd cash out X.
In reality, affiliates and those with traffic dictate the payouts programs have to offer just like the ad buyers dictate how much banner ads cost on a tube. You pay me $5 PPS I'm not sending you a single surfer, $35 and we can talk.
Literally nothing Paul says is based in reality but he says it with such ego and confidence that it cracks me up every single time all these years later.