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Citation needed. I know a dozen companies who spend significant ($1m+) a year on Google or Facebook ads and performance is tracked obsessively.

Alex3917 10y ago
There are different kinds of ads though, e.g. check out Seth's post on this: http://sethgodin.typepad.com/seths_blog/2015/11/direct-marketing-and-the-other-kind.html http://sethgodin.typepad.com/seths_blog/2015/11/direct-marke... I think it was the CEO at BMW who said that if he only showed you BMW advertising the day before you bought a car, they'd go out of business because no one would ever buy a BMW. The brand only works because they start showing you the ads when you're three years old, in hopes that you'll buy one when you're 35. And when they sponsor TED or whatever it's not because they think anyone there is going to go out and buy the car, it's to prove that they're a luxury brand by showing that they can afford to spend a lot of money on advertising that everyone knows isn't going to work. If you look at brand vs direct response, you can see that it's roughly split among digital advertising.[1][2] But as Seth mentions a lot of people use direct marketing to try to do branding and so don't bother carefully measuring their funnel, and most non-digital advertising skews toward brand advertising because it's obviously harder (or impossible) to measure. And digital is less than a third of total advertising. Also look at companies of the Uber/Handy sort, who spend huge on direct marketing purposely at a loss in hopes of later creating some sort of lock in through network effects. In that case it's part measuring and part gambling in a way that's not straightforward to classify. [1] http://www.emarketer.com/Article/How-Much-Industries-Spending-on-Direct-Response-vs-Branding/1010500 http://www.emarketer.com/Article/How-Much-Industries-Spendin... [2] https://www.comscore.com/lat/Insights/Blog/On-Branding-Versus-Direct-Response-Advertising https://www.comscore.com/lat/Insights/Blog/On-Branding-Versu...
ssharp 10y ago
Yeah, I don't know too many companies spending more than paltry amounts of money ads who aren't closely monitoring performance. $1m+ is probably overstating the line at which most companies want to see performance by several multiples.

Alex3917 10y ago

There are different kinds of ads though, e.g. check out Seth's post on this: http://sethgodin.typepad.com/seths_blog/2015/11/direct-marketing-and-the-other-kind.html http://sethgodin.typepad.com/seths_blog/2015/11/direct-marke... I think it was the CEO at BMW who said that if he only showed you BMW advertising the day before you bought a car, they'd go out of business because no one would ever buy a BMW. The brand only works because they start showing you the ads when you're three years old, in hopes that you'll buy one when you're 35. And when they sponsor TED or whatever it's not because they think anyone there is going to go out and buy the car, it's to prove that they're a luxury brand by showing that they can afford to spend a lot of money on advertising that everyone knows isn't going to work. If you look at brand vs direct response, you can see that it's roughly split among digital advertising.[1][2] But as Seth mentions a lot of people use direct marketing to try to do branding and so don't bother carefully measuring their funnel, and most non-digital advertising skews toward brand advertising because it's obviously harder (or impossible) to measure. And digital is less than a third of total advertising. Also look at companies of the Uber/Handy sort, who spend huge on direct marketing purposely at a loss in hopes of later creating some sort of lock in through network effects. In that case it's part measuring and part gambling in a way that's not straightforward to classify. [1] http://www.emarketer.com/Article/How-Much-Industries-Spending-on-Direct-Response-vs-Branding/1010500 http://www.emarketer.com/Article/How-Much-Industries-Spendin... [2] https://www.comscore.com/lat/Insights/Blog/On-Branding-Versus-Direct-Response-Advertising https://www.comscore.com/lat/Insights/Blog/On-Branding-Versu...

ssharp 10y ago

Yeah, I don't know too many companies spending more than paltry amounts of money ads who aren't closely monitoring performance. $1m+ is probably overstating the line at which most companies want to see performance by several multiples.