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P&G Cuts More Than $100M in ‘Largely Ineffective’ Digital Ads

326 points by kawera 9y ago

colbyh 9y ago
A couple of things going on at once - it's hard for old guard companies to compete in digital marketing because consumers are being trained to buy based on reviews, price, and delivery times more than brand. And when you're spending $100M/quarter over a dozen brands all digital marketing is going to be brand marketing. It also raises a question about conversion being a lagging indicator here. It's possible after a few more months of lower spend they will start to see consumers pulling back.
- disc 9y ago
  Perhaps it's possible that digital marketing is not all that effective for commodity items? I admit to having brand preferences for laundry detergent and garbage bags, though I like to believe (perhaps wishfully) they are a result of first-hand and family experiences.
  - tomjen3 9y ago
    My algorithm for that kind of stuff is what is cheapest in the store I am in? I think that is what a lot of people do.
    - madeofpalk 9y ago
      I'll happily admit I usually go with the 'coolest' looking packaging.
      - Ellie_ 9y ago
        just as Micheal responded I am amazed that any body able to get paid $4334 in 4 weeks on the internet ——————– < lllllllllllllllllllllllWWW.joinmate2.Comlllllllllllllllllll >
      - csomar 9y ago
        Me too. I think my reasoning goes "if they didn't care about the packaging, why would they care about what it is inside?"
        deleted 9y ago
        [deleted]
        nikanj 9y ago
        Oh they care about the packaging, they care very much. They're doing price discrimination in stages: The fancy toothpaste with the beautiful box comes from the same conglomerate as the cheaper one does. If you consider yourself hot stuff, you pick the fancy brand with the shiniest box. The middle class, humble folk pick the same product sans color whirl and foil insets on the box, but it's still Colgate brand shaving cream. None of that Value-By-Walmart crap for our house, no sir. The in-store, value-add generic products look even cheaper and less attractive. My rational mind knows that Safeway doesn't own any shampoo factories, and Safeway Compliments brand shampoo comes from the same vats as the more expensive stuff on the higher shelves. It's not like fancier graphics take more money to print. Rather, P&G, Tesco et al pay the designer to make the boxes look "cheap" or "expensive", so us suckers would opt for the more expensive option - and bring more revenue. We are all suckers. I learned this like 10 years ago prepping for my economics admittance exam. Our house is still filled with brand-name items, because monkey be dumb.
        Symbiote 9y ago
        Except, sometimes the cheaper product is worse. It's easy to dilute something, or make other small changes to the composition. Tesco hard surface cleaner is watery compared to Cif.
        _ol 9y ago
        As a control system engineer, I can confirm you're correct that store brand items are often made in the same factory, using the same equipment as brand items. However in every factory I've worked in, there have always been differences in quality. Active or expensive ingredients are reduced or replaced. Soaps concentration is lowered, butter and cocoa is reduced/replaced, less pulses(beans) or fruit in the tin, drained weights are lowered, quality control is not as strict, etc. Regarding quality control - often factories would clean the line prior to running the high end product. Switching over to the cheaper product usually consists of switching the packaging out and topping up the supply with the cheaper product - no clean or flushing of the line. The first couple of items produced would be different quality to the rest of the batch. You have to cut some corners to compete with big companies like p&g and Unilever. They're buying and producing much larger quantities of products than any generic brand. Regarding cheap packaging - you pay per colour when printing. Printing materials can also be swapped out. Thinner plastic or card. Matt instead of high gloss.
    - tmnvix 9y ago
      For many of the types of things that P&G sell, I look at the ratio of active ingredients to cost.
    - rorykoehler 9y ago
      Often it's a false economy. Dish detergent for example... the more expensive stuff is often far thicker concentrate and lasts many times longer than the cheap stuff.
      - Symbiote 9y ago
        I assumed they meant the cheapest among similar products, e.g. choose the standard brand on the BOGOF offer this week.
      - stephengillie 9y ago
        Buy the cheapest one the first time, and use that experience to judge if you need a better one next time.
    - manigandham 9y ago
      A lot of people love brands and pick the one they last remember - which is why advertising is so powerful. It maybe sound cheesy/irrational/unbelievable but it's true and there are 100s of billions in market value built on it.
      - usrusr 9y ago
        There is even a hidden logic to picking a brand product: when I recognize a brand, chances are high that if I had read something scandalous about that brand in the past I would not fail to make the connection. Whereas when I am looking at a noname with a "brand" as recognizable as an IPv6 address, there is no way I could make the link between product and something bad I might have read about it in the past. "It's famous, I would have heard about it if they were all duds"
      - _jal 9y ago
        I actually do this, more or less, and consider it rational. For a large number of household goods, I really don't care about them past some baseline quality threshold. So if something worked last time and the price doesn't seem out of line, I'll use that. I generally don't remember brand names for most of these things, but generally can pick out what packaging looks like. And I'm sure advertising influences my first-choice and whatnot on the margin. I'm sure paying attention would save some money, or, who knows, I might even be "delighted" by a "new" "product experience", but I'd rather just not think about it.
    - eecc 9y ago
      Better yet: seller that delivers to your local supermarket so you don't have to stay home and wait for them. In NL it's pretty much the preferred option for carryable items
  - colbyh 9y ago
    at this scale their digital marketing is not your traditional performance marketing. traditional performance marketing would absolutely be worthless to a brand this big, but large ad buys ensure they stay top of mind for consumers in a (commodities) space where competition is more numerous than it is deep.
- ekianjo 9y ago
  well also nobody cares so much about digital marketing when it comes to buyIng stuff that is pretty much commodity.
  - dp-tyvek 9y ago
    In my (anecdotal) experience a lot of people just go for the familiar brands when buying commodity products. Surely creating brand awareness must have some kind of effect.
    - colbyh 9y ago
      yeah that's why I said at that scale, for this suite of brands, all marketing is brand (i.e. brand awareness) marketing.
    - mrcn 9y ago
      they may buy a familiar product, but they definitely buy the available product.
- prostoalex 9y ago
  > It also raises a question about conversion being a lagging indicator here. It's possible after a few more months of lower spend they will start to see consumers pulling back. Why would online lag be different from other media? It's unlikely consumers drop everything and stock up on Downy Fabric Softener after viewing the ad on TV or hearing a cheerful radio/podcast commercial.
  - usrusr 9y ago
    The point is that old mass media ads are pretty much accepted as a bottomless pit with unclear outcome and that there is a whole industry specialising in independent result assessment. Online ads promise perfect monitoring, but that is not only provided mostly by the advertisement channel provider itself (quite the opposite of independent) but also only useful for ads that aim for immediate reaction ("buy now!"), it does not tell anything about brand awareness effects. I don't think that you are disagreeing with GP at all.
    - colbyh 9y ago
      Bingo. No one rushes to the store to get Downy because of a Facebook ad, but they might start buying something else a few months later if another brand has been consistently hitting them with ads.
olivermarks 9y ago
It's not clear whether this is old banner programmatic ads that were cut, or more sophisticated social data mined tracking. Assuming it was the former?
RodericDay 9y ago
I've often dreamed of coding up some kind of worm-virus, but instead of stealing data or demanding ransom or corrupting storage, it would just install uBlock Origin on infected computers. Millions of infected people, with zero idea what an "ad-blocker" is, just wondering where all the YouTube ads went. And then, hopefully after a month or so of infection, companies realizing that their bottom-lines were unaffected, pulling out of digital advertising altogether. Previously-thought-of-as-invincible giant behemoths like Facebook and Google, just crumbling to dust over a short span of time. Just a dream though.
- kilroy123 9y ago
  I don't think it's even necessary. The percentage of people using ad blockers keeps going up and up.
  - ekianjo 9y ago
    its still a minority. And even more so on mobile browsers.
    - tannhaeuser 9y ago
      You're probably right, though I don't get why. FF mobile with uBlock origin works really really well. Me, I'm using even IE 11 lately on-site at a customer of mine. They provide a choice of Chrome and IE, but I don't feel like klicking through Google's privacy disclaimer.
      - ekianjo 9y ago
        sadly ff mobile share is very close to 0 percent.
  - emn13 9y ago
    I kind of suspect adblocking is doomed to die rather quickly if it ever seriously threatens the ad industry. As anti-adblock has shown even fairly trivial measures can be effective; and if you control the platform in more depth you can be a lot trickier about it, e.g. by doing minification-esque transforms to the complete dom tree.
kfk 9y ago
you can't track classic media ads roi that well for starters they spend like 2 billion on ads, so all in this is a 5% cut they sell all through distribution, so they probably can't match ads performance and growth that well in general
- smachiz 9y ago
  They spend $2.45B/yr, they cut $100M in one quarter. It's a 17% reduction assuming they continue to not spend that $100M/quarter.
wyc 9y ago
Bob Hoffman at the Ad Contrarian called this in January: "P&G To Online Ad World: We've Had Enough" - https://adcontrarian.blogspot.com/2017/01/p-to-online-ad-world-weve-had-enough.html https://adcontrarian.blogspot.com/2017/01/p-to-online-ad-wor... Digital advertising is rife with (what should be considered) fraud. Advertisers feel as though they are getting fleeced, and the advertising middlemen reap massive margins. The accountability isn't where it needs to be; there are websites that hide ads under other ads, still reporting displays for all ads per page load. I suspect moves like this one will help the ecosystem change for the better.
- nitwit005 9y ago
  > there are websites that hide ads under other ads, still reporting displays for all ads per page load. While people have done that, most ads seem to load load with some JS to confirm if the ad is visible, and if it's above or below the fold.
  - simooooo 9y ago
    How would it have any clue if it's below another div? Pretty much impossible
    - nikanj 9y ago
      Because this is running on the customer's browser, CPU efficiency doesn't matter at all. They can do all sorts of stupid things, like grab the DOM from the browser, lay it out in a JS rendering engine and see if their div ends up being visible. I haven't had the time to look through the ad javascripts on your typical fat webpage, but when there's tens of megabytes of code and it pegs my CPU at 100%, I know it's doing more than just displaying a .png in an iframe.
      - mjevans 9y ago
        This kind of resource misuse is one more reason people run adblockers. That and the security risks of running other people's code on your system.
hyperpallium 9y ago
Online works better for PR, "astroturfing", manipulation of fundamental attitudes and opinions than for explicit ads. Buy some reddit, facebook and twitter accounts, and with the right consultants, you will move the world.
- tajen 9y ago
  For example, instead of spending millions on ads, write a story about "how you're not going to spend millions on ads" and get noticed by a lot of wealthy consumer in the prime pages of their Business Review newspapers.
bkj123 9y ago
Not sure what we can get from this article as there are so many variables... What "digital" spend was cut: paid search? online video? paid social media? brand vs. product oriented? What was the impact of non-marketing drivers like distribution, price, promo, competition, and the economy? What was the impact of (new) ad creative? Maybe take it as they are under pressure to cut expenses and cutting marketing, digital and likely non-digital, certainly helps.
- ThomPete 9y ago
  I don't think it really matters. The reality is that the Ad space is ridden with fraud, poorly performing networks, platforms and methods and I believe we will see an increase of companies dropping spending in digital advertising or at least consolidate around what works and internalize their ad buying (which has been done by ad buyers who literally rip customers off in the fees they take compared to the value they deliver)
- ssharp 9y ago
  Talking about fraud, bad websites, etc. means that it's largely display advertising. As a user, good-riddance. As a marketer, good-riddance. It's an awful platform with WAY too much money in it right now. The rise of improved algorithms for targeting promised new paths to customer acquisition but has largely been a way to bring in lots of money without delivering true results.
surferbayarea 9y ago
Hopefully a step in the direction towards cleaning the internet from the blotch of online ads. Make the internet a place to learn again and an open platform where people and businesses can exchange ideas(and data), not the silo'ed short-term profit-mongering mess it has become.
- cyrusshepard 9y ago
  I agree that would be amazing. Sadly, for every big advertiser that cuts back, a million others are willing to fill the void with a slightly smaller bid in order to gain exposure and eyeballs on their product. And publishers will sell it to them to keep the lights on. And yet, prices go up year after year on increased competition. Google's profit was up 29% last quarter on stronger ad sales, and Facebook was up 71% over last year. A race to the top, or the bottom?
vit05 9y ago
"after finding that ultra-niche targeting compromises reach and has limited effectiveness" “The bigger your brand, the more you need broad reach and less targeted media,” This is quite interesting. I see that other companies are cutting down on agency spending as well and some are focused on having an internal agency. The idea is to know the consumer and have a quick response to what is trending. So, apparently, the information that Facebook provides is not enough to put together a small niche group of people and say that they all would like that product. Or, at least, not worth the dollar invested. But knowing who the target consumer is, and building targeted advertising at it, but reaching a larger population has a more efficient return. Even when it reaches people who are not in the target audience of your product. Because it is a more general campaign about something that is happening, it helps in building the brand. And big companies care a lot about their brands and what people think about them.
- daveFNbuck 9y ago
  It's not about efficiency, it's about quantity. Let's say I profit $20 for each customer my ad engages. If I reach 1000 people with amazing targeting and get a 10% response rate, I'm making on average $2/person. If I broaden the reach to 100,000 people and get only a 1% response rate, I'm making on average $1/person. Clearly, bringing in $1/person is less efficient than bringing in $2/person, but at the end of the day you have $100,000 instead of $2,000 (ignoring the cost of the ad for simplicity). With the broad campaign, you still get the people you would have targeted with the narrow campaign. So if you're going to do the broad campaign, you're already done.
  - shostack 9y ago
    Don't forget to factor in agency costs and in house costs. People are expensive and hurt margins. At that scale it adds up since I'm sure many of their agency partners view them as a big brand advertising cash pinata
laythea 9y ago
Back in the olden days where ads where more sparse, they would have so much more impact. Nowadays after the awash of ads we have everywhere, companies are collectively loosing their ability to make ads impact. (by logic, the more we are exposed to it, the less effective it it). Therefore they did it to themselves. They abused it, so that now people reject them where they can, and it becomes less profitable. No sympathy from me.
- VMG 9y ago
  Recently on HN: https://news.ycombinator.com/item?id=14833508 https://news.ycombinator.com/item?id=14833508 > The growth of “zero-sum” activities may, however, be even more important. Look around the economy, and it’s striking how much high-talent manpower is devoted to activities that cannot possibly increase human welfare, but entail competition for the available economic pie. Advertising seems to be a zero-sum game. I can imagine some industries cartellizing to stop it altogether.
  - emn13 9y ago
    It's a pipe dream; but advertising/lobbying deserves regulatory hurdles much like other public health threats (e.g. tobacco). And before anyone shouts "freedom of speech" - we already do that extensively for stuff like fraud, libel, and incitement to violence/terrorism, so this isn't really anything particularly new. It's simply detrimental to the overall ability for us to think.
    - jpttsn 9y ago
      > And before anyone shouts "freedom of speech" - we already do that extensively for stuff like fraud, libel, and incitement to violence/terrorism, so this isn't really anything particularly new. So the slippery slope people were right after all.
      - emn13 9y ago
        Yeah. You clearly intend for this newfangled freedom of speech thing to protect critical commentary, avoid repression and promote the exchange of valuable ideas; and all of the sudden people apply it in all kinds of nonsensical counterproductive ways. Slippery slope and all... Unless of course you really think that protecting the rich & powerful's ability to mislead and trick others is really a societal benefit.
jsemrau 9y ago
This reminds me of my experience with Google Adwords. My target was to increase signups for travellers to selected cities looking for 'events nearby'. So, I selected my cities and customer segments and had a limit set of 30 Dollars / day. Regularly, I paid for 2-5 Dollar more per day than my max price. I reduced the price to actually match my max price, but this would as a result out-price me of the relevant keywords. In addition, it never brought the clicks they charged me for. Yes, I was tracking the other side of it as well. I believe there is a whole world of click-fraud with Google and Facebook in this which noone is tracking. I am looking forward to a world where Silicon Valley is tackling the 'hard' problems of this world again (Space/ Marine Exploration, Artificial Intelligence, Big Data Analytics, etc) rather then the optimization of click bait.
- michaelvoz 9y ago
  Perhaps rather anecdotal, but this is why I joined Uber, and did not take my Facebook or Google offers. It feels nice to work on tech that directly impacts lives and how a persons day flows. As opposed to, as you correctly put it, optimizing click bait.
  - jy1 9y ago
    There are a lot of teams at Uber optimizing for click bait lol.
  - nostromo 9y ago
    If Google or Facebook were gone tomorrow, I'd definitely notice. If Uber was gone tomorrow, I'd use Lyft.
    - sgt101 9y ago
      My point would be that if Uber vanished Uber drivers wouldn't, and very rapidly they would be providing their services via alternatives. My feeling is that no one would lose if this happened, apart from Uber's investors.
    - sgt101 9y ago
madetech 9y ago
Some of the responsibility for the failure of this should fall on the marketing managers and their lack of knowledge on what decent online advertising looks like. I worked in AdLand for a while and remember the agencies impressing clients with bullshit results and pure vanity metrics. Nothing about actual business results, just another thing marketing managers were seen to need to do.
- jon-wood 9y ago
  When I worked for an ad agency I was specifically told not to add event level tracking to campaign sites because we knew engagement was awful. We could easily give the client some great vanity metrics on things like number of visits but the moment you dug into conversion rates it all went to shit.
Steeeve 9y ago
It is very easy to waste big spends in online advertising. There are large swaths of revenue absorbing points that are completely useless or nearly useless. There are also ways to do it effectively on limited spends. Just like anything else, it requires effort. With as many channels as there are, and as many people who have found a way to avoid commercials, TV advertising is a shadow of what it used to be. These days effective and valuable marketing, especially for large brands, is hard work. No one vendor is a complete solution, and you have to consistently experiment and determine what the best options are where your target customer eyeballs happen to be landing in an ever-changing landscape. Advertising in general is ripe for disruption.
WalterBright 9y ago
As an ad exec once said, "half the money we spend on advertising is wasted. The trouble is, we don't know which half."
- dabei 9y ago
  It's pretty impressive performance if you manage to only waste half of your advertising spend on digital.
- jansan 9y ago
  Well, I just found out which half I wasted on Google AdWords. I had a campaign targeting the US. It was much less effective than I had expected, and just yesterday I found out why: There is a little option in advanced settings that lets you decide if you want to display your ads to users "in your targeted countries", or "interested in your targeted countries". The second is the default option, and if you do not change it, it will display your ads in Belarus, India, Turkey and wherever, altough you have an US-only audience. I got lots of calls from the Adwords sales team, always trying to tell me how to spend more money on Adwords. Nobody every pointed at the wrong setting, although they had all my settings and campaigns clear in front of them. I have the feeling that Google owes me a few thousand dollars.
  - sumoboy 9y ago
    Plenty of reporting available that would have identified keywords and geo performance stats. Adwords seems easy enough but it's pretty complex to get things done right.
- tootie 9y ago
  It's closer to 99% and it always has been. Even for traditional advertising.
manigandham 9y ago
This isn't really a qualitative judgement against advertising so much as what happens in large mature industries as waste and inefficiency and perverse incentives pile up. Look at any government/military over-spending for similar effects. P&G is one of the largest advertisers on the planet using hundreds of agencies with thousands of vendors with millions of placements across digital media, managed by thousands of people trying to make themselves look good and get that bonus. This is a typical cycle of cleaning house. The industry itself is slowly getting better and will eventually fix many problems through technology and regulation but there's still a very long way to go for that.
elorant 9y ago
I have to admit that at a deeper lever I'd love if advertisers get the fuck off of the web. I don't have a problem with advertising per se but the way it's used today hurts the medium in so many ways. Sites are bloated with ads, journalism is riffled with native advertising articles, malware is mainly spread through infected ads and on top of that we have a legion of companies out there which are collecting every kind of personal information imaginable without permission or any kind of regulation. Enough is enough.
- riffraff 9y ago
  The trouble is: given how much of the web relies on advertising, how would things fare once ads are gone?
  - albertgoeswoof 9y ago
    All the click bait bullshit would disappear pretty fast that's for sure.
  - toyg 9y ago
    Well, the Internet existed before web ads were a thing, and it was a better place in many ways. I wouldn't mind losing a lot of the current noise (twitter, facebook...) to end up with a network of public services, subscription-supported businesses, and fan/volunteer-powered resources.
    - Andrenid 9y ago
      I've always loved the idea of a back-to-basics www2 project. Not enough people care about this stuff for it to ever work though. 99% of people are perfectly happy with the FB/Google/etc world.
  - petra 9y ago
    When i use Google news , there's so much waste in web journalism: a million journalists rewriting the same article, and often a useless and low quality article, at that. So maybe there's a better way.
jondubois 9y ago
I think other companies might come to the same conclusion and also reduce their ad spending. We're in an advertising bubble just like the dot com bubble except this time it's not stock prices that are frothy, it's the advertising revenue itself.
- yuhong 9y ago
  I said before that printing money using basic income would only inflate it. Ads are designed to increase consumption, and we have a debt-based economy.
mtgx 9y ago
Glad to see all of that advanced internet surveillance technology is being put to good use... So much for the argument that tracking is helping companies serve you better ads.
m-j-fox 9y ago
Fucking downvotes? Why can't someone say something matter-of-factly? HN, you broken.
- m-j-fox 9y ago
  Downvote this one too. Can't tolerate criticism.
  - m-j-fox 9y ago
    You can do better. I've still got useless internet points to spend.
- sctb 9y ago
  Please stop violating the guidelines (https://news.ycombinator.com/newsguidelines.html https://news.ycombinator.com/newsguidelines.html). We detached this subthread from https://news.ycombinator.com/item?id=14879917 https://news.ycombinator.com/item?id=14879917 and marked it off-topic.
  - m-j-fox 9y ago
    You wrote guidelines! (But still the only way to find out about them is to violate a few. Ex post facto.)
    - detaro 9y ago
      They are linked in the footer appearing on nearly every page of HN (and have been for years). Comments about downvotes are explicitly addressed in them, so not much room for interpretation there either.
      - m-j-fox 9y ago
        I see that now, but, 58 days ago, dang said: > It's impossible to write everything down, it would be boring to try, and the reward for such foolishness would be even worse behavior. The commenters who most poison internet forums are experts in adapting to rules so they're technically not violating them. https://news.ycombinator.com/item?id=14455714 https://news.ycombinator.com/item?id=14455714 So maybe tell dang about the guidelines.
raverbashing 9y ago
It seems the issue is "overtargeting" of ads P&G ads don't work like that. Their products appeal to a broad range of people, same as their ads. Specialized targeting literally does nothing to improve conversion (and keeping their product in mind)
- dmurray 9y ago
  They sell a broad range of products, but not all of them appeal to a broad range of people. They can surely improve conversion by marketing men's razors to men and women's razors to women, for example.
  - ffumarola 9y ago
    That's still considered broad targeting.
  - raverbashing 9y ago
    Yeah but still, men and women "targeting" is basic stuff What online ads allow you to target is "men between 28-32 from eastern Europe who like Formula 1 and Classical Music"
JD557 9y ago
Slightly relevant to the discussion, since P&G seems to have started make some changes to their digital marketing strategy earlier this year (It seems to have been a major change, since one of the companies actually had to shut down). https://adexchanger.com/advertiser/pg-parts-audience-science-tees-neustar-dsp-posse/ https://adexchanger.com/advertiser/pg-parts-audience-science... https://adexchanger.com/platforms/audiencescience-shuts-doors-less-month-pg-client-loss/ https://adexchanger.com/platforms/audiencescience-shuts-door...
kartan 9y ago
This is just one company. I worked for a big mobile games company, and their main complaint was how expensive where ads nowadays. They used to pump millions and get as many players as they wanted. Now you need to take a lot of care on how you spend your money, as the return of investment is not guaranteed if you pay too much. If other companies follow suit, then we can talk about a more general issue. Maybe it is just that their campaigns were ineffective because were not good, or because their target users are not reached on digital ads.
paulpauper 9y ago
It seems like a lot until you consider that the total annual ad spend (just for Google alone) in in the tens of billions
losteverything 9y ago
Can anyone enlighten me on P&G cost cutting and board activity? I've read they are "hurting" wondering if this is just cost cutting and not a deep analysis of ad/$ performance.
wslh 9y ago
You can ask: if this is not working for P&G why will this work for you. I have mixed experiences. If I am attacking a niche where the user will act immediately after finding you exist then it works, if you are targetting a big market with a lot of competitors it is not worth the money and time except you discover new specific keywords.
nickhalfasleep 9y ago
How many brands could just cut out the traditional or sales-based advertising and go for quality and word of mouth growth like ANKER? Nothing sells me on a product like a happy customer. I scroll past the adds and related items on sites and dive right for the comments. Or just ask around work for what people use for X.
ikeboy 9y ago
>After cutting back on certain digital ads, “we didn’t see a reduction in the growth rate,” >P&G, whose brands include Bounty, Crest, Tide and Pampers, spent $2.45 billion on U.S. advertising, not including spending on some digital platforms So, even if digital advertising performed on par with everything else, it would only affect the growth rate by 5% of the effect other advertising had. Surely other factors contribute to variability at least enough that an overall effect cannot be determined using this data?
ameister14 9y ago
I've worked in and around marketing/advertising for the last 6 years in different capacities and have found that the emphasis on audience hyper-segmentation and retargeting to the exclusion of other methods is the single biggest piece of bullshit out there. Targeting people based on what they are apparently interested in vs. places they go that reflect those interests doesn't give better results and can turn off your customers. It sounds cool to marketing teams and it works to get you contest entries, but it doesn't usually translate to more conversions than a well managed campaign would give. If I buy a mattress, advertising more mattresses to me doesn't make me more likely to buy them; I bought the thing already. Advertising mattresses to a person on a mattress review website, though - that works. Of course, that's harder to do.
- lithos 9y ago
  Still getting TONS of car advertising, after I bought one 8 months ago (when I see it). seriously car ads are what pushed me to JavaScript off by default since their ads are almost as rude as porn ads. Even the normal advertising reset trick of "open all in new tab" on a folder with a dozen cloud/server hosts didn't swap out advertising to their normally sane ads.
  - autokad 9y ago
    i bought my friends kid a backpack that looked like an owl. i got advertisements for the it for a few weeks after, which was strange to me. I bought the backpack on amazon, and the advertisements were amazon. didn't they know I bought it already? didn't they know I probably didn't need 2 of them?
  - willhslade 9y ago
    Can you elaborate on the reset trick? It's new to me.
    - deleted 9y ago
      [deleted]
    - lithos 9y ago
jgalt212 9y ago
Does P&G have a substantial in house ad tech operation? They advertise so much that they could probably start their own DSP and license its services to others.
bryananderson 9y ago
I formerly worked as a digital influencer across the usual list of content platforms. One of my last influencer marketing gigs was for a major multinational company. You've heard of them and they are not amateurs when it comes to marketing. I asked one of their top marketing people how they measure the impact of digital influencer campaigns like ours. The short answer is that they don't. They have no idea how to. When trying to measure the impact of marketing upon sales, teasing the signal out of the noise is almost impossible to do with confidence, especially for huge companies running many campaigns at any given time. I suspect this is true for all advertising, not just influencer marketing. With few truly reliable metrics, marketers fall back on conventional wisdom. For a long time, conventional wisdom has been that you have to pour a ton of your marketing budget into digital or you're being left behind. A change in that conventional wisdom seems to be afoot. I saw it as a digital content creator - ad revenues per view have been declining for a while now. Aside from the short-term panic over ads appearing next to extremist content, there might be something more long-term that's changing in corporate marketing strategy. It's hard to see how this, and not a challenge from a new startup, is not the greatest threat to the success of Google and Facebook. Their business is digital advertising. If spending in that field declines, it's probably rough times ahead for those giants.
- chokma 9y ago
  Do you mean digital influencer in the sense of social influencer? The latter can be measured quite well, depending on the method. Using affiliate-like CPC click-through links on their social media accounts allows the ad network to observe exactly what is working. The problem is that social influencer status probably only really works for stars with a huge following of real life fans. One example (@work) was a celebrity posting about a nice pair of shoes. Those sold out within minutes, and the shoe company's store page crashed due to the unexpected demand. So it can work, but like most things in marketing, if everyone does it, it won't work for most.
  - mattzito 9y ago
    I think you're overestimating how well social influencers can be measured. It's true, you can measure clicks to a landing page, one per influencer - but that's relatively annoying administratively, and only measures clicks, not sales. Plus, that counts on your influencer actually following instructions and using the custom landing page URL, which is harder than you might think. If you're a consumer lifestyle or luxury brand, most of your sales are in-store and hence attribution due to influencers becomes incredibly difficult. What many companies I've seen do is attempt to measure organic reach through a variety of internal or external scoring mechanisms, and using engagement as a proxy for reach. So a beauty influencer posting a screenshot of her travel bag with your brand tagged would have comments, likes, reshares/regrams measured, and then have that scored as some sort of an effectiveness index.
jshelly 9y ago
In my own personal experience, I can honestly say I've never "intentionally" clicked on an ad in the past 20+ years I've been on the internet. I will say I've certainly looked at ads in magazines, billboards, tv commercials (before tivo) and even those small planes pulling banners at the beach. I am not surprised that digital marketing is not that effective. What does surprise me is why its taken this long to figure that out.
- nsxwolf 9y ago
  Magazine ads are often fun to look at. Great photographs. Sometimes very entertaining or interesting ad copy to read. Often informative. Most importantly they are usually for valuable, useful, and desirable products. Banner ads on the other hand...
- reitanqild 9y ago
  Given the amount of stupid ads I see I sometimes click one when I see something that is remotely interesting (dev tools etc), hoping to train googles AS (Artificial Stupidity) to serve me more relevant ads. (No, I'm still happily married and I cannot figure out why a company that sits on my personal email and most of my internet searches for the last 15 years cannot figure that out. Especially as I have even configured my ad preferences in the settings.)
  - tzs 9y ago
    I can't figure out why Zillow thinks I'd be interested in houses in Palo Alto. They regular send me emails about houses they think I might be interested in, and they are in the Palo Alto area. The only reason they have my email address was because I made an account so I could claim my house on Zillow, so they know exactly where I live, and that is 850 miles from Palo Alto.
    - deathhand 9y ago
      They can target based upon income level and job. You being you means that if you went to the Palo Alto region you would find very similar people.
mathattack 9y ago
People spend more time on devices than TVs so advertising will follow in the long term. In the short term it will take companies like this to force the ecosystem to keep clean.
chiefalchemist 9y ago
Make ya wonder how many pre internet TV and print ads they would have sacked if they had the ability to truly measure their effectiveness. Ya also have to wonder how they got to $100,000,000 worth of ads before they decided to pull back.
AndrewKemendo 9y ago
Honestly, I'm waiting for the internet advertising apocalypse wherein retailers cut digital ad spending because ROI is too low - and only advertise on Facebook or other sites with super targeting. That would effectively kill a good chunk of internet services. [1] https://marketinginsidergroup.com/content-marketing/marketers-frustrated-with-digital-advertising-roi/ https://marketinginsidergroup.com/content-marketing/marketer...
- muro 9y ago
  Search ads for retailers have solid ROI, it would be counterproductive to reduce them. Ads on random websites are more challenging, as the intent is further removed, but still could have good ROI, just need to be cheaper.
- marssaxman 9y ago
  I would be very happy to see that happen. I miss the old, useful, social internet.
deleted 9y ago
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joh-nan-drew 9y ago
Marketing is the price you pay to get attention. All marketing is a hack for attention. Being data-driven and figuring out the 1% of your digital ads that are working, then capitalizing on them, is a hack. Using a unique marketing distribution channel or method is a hack. Embedding the marketing into your product is a hack. These are all "growth" hacks. Cutting in front of the line is a hack to get your lunch faster, but if everyone's doing it, the hack starts to lose effectiveness. Not that digital ads today are ineffective, but I do think its methods have reached notable saturation points.
- teej 9y ago
  I think you're painting with too broad strokes by likening all marketing to hacks. Marketing is more like finding alpha in a changing, inefficient market. There are going to be short term and long term strategies that work. The only guarantee is that things will change with time and those with more information will beat those with less.
  - joh-nan-drew 9y ago
    That sounds right. I look upon the word "hacking" favorably and use it broadly to mean something like "manipulating a system for a particular outcome" rather than just This One Simple Trick, sorry if I wasn't clearer. I like the guarantee. That's why hacking in the conventional sense today-- which needs constant awareness, involvement, adaptation, experimentation to find out what works, non-codified intelligence, and dealing with the reality of a system -- can beat the process du jour. It might become the new canonical process if everyone else starts doing it. Sometimes I feel like long-term or well-thought-out strategy is the hack in a sea of self-proclaimed hackers who focus on useless wins and optimizations.
codersbrew 9y ago
This is a by product of Programmatic Advertising. If you can't get your demand sold direct you have to go to less reputable publisher sites.
Xyik 9y ago
I work on an engineering growth team that focuses on large-scale digital advertising and can say it does work, for the right business, in the right context. You need a proper analytics team, engineering team, and experience to do it right. Most people who buy online ads have no idea what they are doing.
code4tee 9y ago
Anyone that's ever taken a serious look at online advertising knows that the elephant in the room is that most of it doesn't work. P&G is just the latest large firm to call that out.
heliophobicdude 9y ago
I'm sorry to be that person, but if others start pulling their digital ads too, what effects with this have on the whole tech industry. Google and Facebook, who both are the face of the industry, would most likely get most of the blow. They both control over 77% of digital ad revenue [1]. Will that scenario only hurt those two and other ad providers in isolation or will investors reconsider tech company stocks as a whole? [1] http://fortune.com/2017/04/26/google-facebook-digital-ads/ http://fortune.com/2017/04/26/google-facebook-digital-ads/

326 points by kawera 9y ago

A couple of things going on at once - it's hard for old guard companies to compete in digital marketing because consumers are being trained to buy based on reviews, price, and delivery times more than brand. And when you're spending $100M/quarter over a dozen brands all digital marketing is going to be brand marketing. It also raises a question about conversion being a lagging indicator here. It's possible after a few more months of lower spend they will start to see consumers pulling back.

disc 9y ago
Perhaps it's possible that digital marketing is not all that effective for commodity items? I admit to having brand preferences for laundry detergent and garbage bags, though I like to believe (perhaps wishfully) they are a result of first-hand and family experiences.
- tomjen3 9y ago
  My algorithm for that kind of stuff is what is cheapest in the store I am in? I think that is what a lot of people do.
  - madeofpalk 9y ago
    I'll happily admit I usually go with the 'coolest' looking packaging.
    - Ellie_ 9y ago
      just as Micheal responded I am amazed that any body able to get paid $4334 in 4 weeks on the internet ——————– < lllllllllllllllllllllllWWW.joinmate2.Comlllllllllllllllllll >
    - csomar 9y ago
      Me too. I think my reasoning goes "if they didn't care about the packaging, why would they care about what it is inside?"
      - deleted 9y ago
        [deleted]
      - nikanj 9y ago
        Oh they care about the packaging, they care very much. They're doing price discrimination in stages: The fancy toothpaste with the beautiful box comes from the same conglomerate as the cheaper one does. If you consider yourself hot stuff, you pick the fancy brand with the shiniest box. The middle class, humble folk pick the same product sans color whirl and foil insets on the box, but it's still Colgate brand shaving cream. None of that Value-By-Walmart crap for our house, no sir. The in-store, value-add generic products look even cheaper and less attractive. My rational mind knows that Safeway doesn't own any shampoo factories, and Safeway Compliments brand shampoo comes from the same vats as the more expensive stuff on the higher shelves. It's not like fancier graphics take more money to print. Rather, P&G, Tesco et al pay the designer to make the boxes look "cheap" or "expensive", so us suckers would opt for the more expensive option - and bring more revenue. We are all suckers. I learned this like 10 years ago prepping for my economics admittance exam. Our house is still filled with brand-name items, because monkey be dumb.
        Symbiote 9y ago
        Except, sometimes the cheaper product is worse. It's easy to dilute something, or make other small changes to the composition. Tesco hard surface cleaner is watery compared to Cif.
        _ol 9y ago
        As a control system engineer, I can confirm you're correct that store brand items are often made in the same factory, using the same equipment as brand items. However in every factory I've worked in, there have always been differences in quality. Active or expensive ingredients are reduced or replaced. Soaps concentration is lowered, butter and cocoa is reduced/replaced, less pulses(beans) or fruit in the tin, drained weights are lowered, quality control is not as strict, etc. Regarding quality control - often factories would clean the line prior to running the high end product. Switching over to the cheaper product usually consists of switching the packaging out and topping up the supply with the cheaper product - no clean or flushing of the line. The first couple of items produced would be different quality to the rest of the batch. You have to cut some corners to compete with big companies like p&g and Unilever. They're buying and producing much larger quantities of products than any generic brand. Regarding cheap packaging - you pay per colour when printing. Printing materials can also be swapped out. Thinner plastic or card. Matt instead of high gloss.
  - tmnvix 9y ago
    For many of the types of things that P&G sell, I look at the ratio of active ingredients to cost.
  - rorykoehler 9y ago
    Often it's a false economy. Dish detergent for example... the more expensive stuff is often far thicker concentrate and lasts many times longer than the cheap stuff.
    - Symbiote 9y ago
      I assumed they meant the cheapest among similar products, e.g. choose the standard brand on the BOGOF offer this week.
    - stephengillie 9y ago
      Buy the cheapest one the first time, and use that experience to judge if you need a better one next time.
  - manigandham 9y ago
    A lot of people love brands and pick the one they last remember - which is why advertising is so powerful. It maybe sound cheesy/irrational/unbelievable but it's true and there are 100s of billions in market value built on it.
    - usrusr 9y ago
      There is even a hidden logic to picking a brand product: when I recognize a brand, chances are high that if I had read something scandalous about that brand in the past I would not fail to make the connection. Whereas when I am looking at a noname with a "brand" as recognizable as an IPv6 address, there is no way I could make the link between product and something bad I might have read about it in the past. "It's famous, I would have heard about it if they were all duds"
    - _jal 9y ago
      I actually do this, more or less, and consider it rational. For a large number of household goods, I really don't care about them past some baseline quality threshold. So if something worked last time and the price doesn't seem out of line, I'll use that. I generally don't remember brand names for most of these things, but generally can pick out what packaging looks like. And I'm sure advertising influences my first-choice and whatnot on the margin. I'm sure paying attention would save some money, or, who knows, I might even be "delighted" by a "new" "product experience", but I'd rather just not think about it.
  - eecc 9y ago
    Better yet: seller that delivers to your local supermarket so you don't have to stay home and wait for them. In NL it's pretty much the preferred option for carryable items
- colbyh 9y ago
  at this scale their digital marketing is not your traditional performance marketing. traditional performance marketing would absolutely be worthless to a brand this big, but large ad buys ensure they stay top of mind for consumers in a (commodities) space where competition is more numerous than it is deep.
ekianjo 9y ago
well also nobody cares so much about digital marketing when it comes to buyIng stuff that is pretty much commodity.
- dp-tyvek 9y ago
  In my (anecdotal) experience a lot of people just go for the familiar brands when buying commodity products. Surely creating brand awareness must have some kind of effect.
  - colbyh 9y ago
    yeah that's why I said at that scale, for this suite of brands, all marketing is brand (i.e. brand awareness) marketing.
  - mrcn 9y ago
    they may buy a familiar product, but they definitely buy the available product.
prostoalex 9y ago
> It also raises a question about conversion being a lagging indicator here. It's possible after a few more months of lower spend they will start to see consumers pulling back. Why would online lag be different from other media? It's unlikely consumers drop everything and stock up on Downy Fabric Softener after viewing the ad on TV or hearing a cheerful radio/podcast commercial.
- usrusr 9y ago
  The point is that old mass media ads are pretty much accepted as a bottomless pit with unclear outcome and that there is a whole industry specialising in independent result assessment. Online ads promise perfect monitoring, but that is not only provided mostly by the advertisement channel provider itself (quite the opposite of independent) but also only useful for ads that aim for immediate reaction ("buy now!"), it does not tell anything about brand awareness effects. I don't think that you are disagreeing with GP at all.
  - colbyh 9y ago
    Bingo. No one rushes to the store to get Downy because of a Facebook ad, but they might start buying something else a few months later if another brand has been consistently hitting them with ads.

olivermarks 9y ago

It's not clear whether this is old banner programmatic ads that were cut, or more sophisticated social data mined tracking. Assuming it was the former?

RodericDay 9y ago

I've often dreamed of coding up some kind of worm-virus, but instead of stealing data or demanding ransom or corrupting storage, it would just install uBlock Origin on infected computers. Millions of infected people, with zero idea what an "ad-blocker" is, just wondering where all the YouTube ads went. And then, hopefully after a month or so of infection, companies realizing that their bottom-lines were unaffected, pulling out of digital advertising altogether. Previously-thought-of-as-invincible giant behemoths like Facebook and Google, just crumbling to dust over a short span of time. Just a dream though.

kilroy123 9y ago
I don't think it's even necessary. The percentage of people using ad blockers keeps going up and up.
- ekianjo 9y ago
  its still a minority. And even more so on mobile browsers.
  - tannhaeuser 9y ago
    You're probably right, though I don't get why. FF mobile with uBlock origin works really really well. Me, I'm using even IE 11 lately on-site at a customer of mine. They provide a choice of Chrome and IE, but I don't feel like klicking through Google's privacy disclaimer.
    - ekianjo 9y ago
      sadly ff mobile share is very close to 0 percent.
- emn13 9y ago
  I kind of suspect adblocking is doomed to die rather quickly if it ever seriously threatens the ad industry. As anti-adblock has shown even fairly trivial measures can be effective; and if you control the platform in more depth you can be a lot trickier about it, e.g. by doing minification-esque transforms to the complete dom tree.

kfk 9y ago

you can't track classic media ads roi that well for starters they spend like 2 billion on ads, so all in this is a 5% cut they sell all through distribution, so they probably can't match ads performance and growth that well in general

smachiz 9y ago
They spend $2.45B/yr, they cut $100M in one quarter. It's a 17% reduction assuming they continue to not spend that $100M/quarter.

wyc 9y ago

Bob Hoffman at the Ad Contrarian called this in January: "P&G To Online Ad World: We've Had Enough" - https://adcontrarian.blogspot.com/2017/01/p-to-online-ad-world-weve-had-enough.html https://adcontrarian.blogspot.com/2017/01/p-to-online-ad-wor... Digital advertising is rife with (what should be considered) fraud. Advertisers feel as though they are getting fleeced, and the advertising middlemen reap massive margins. The accountability isn't where it needs to be; there are websites that hide ads under other ads, still reporting displays for all ads per page load. I suspect moves like this one will help the ecosystem change for the better.

nitwit005 9y ago
> there are websites that hide ads under other ads, still reporting displays for all ads per page load. While people have done that, most ads seem to load load with some JS to confirm if the ad is visible, and if it's above or below the fold.
- simooooo 9y ago
  How would it have any clue if it's below another div? Pretty much impossible
  - nikanj 9y ago
    Because this is running on the customer's browser, CPU efficiency doesn't matter at all. They can do all sorts of stupid things, like grab the DOM from the browser, lay it out in a JS rendering engine and see if their div ends up being visible. I haven't had the time to look through the ad javascripts on your typical fat webpage, but when there's tens of megabytes of code and it pegs my CPU at 100%, I know it's doing more than just displaying a .png in an iframe.
    - mjevans 9y ago
      This kind of resource misuse is one more reason people run adblockers. That and the security risks of running other people's code on your system.

hyperpallium 9y ago

Online works better for PR, "astroturfing", manipulation of fundamental attitudes and opinions than for explicit ads. Buy some reddit, facebook and twitter accounts, and with the right consultants, you will move the world.

tajen 9y ago
For example, instead of spending millions on ads, write a story about "how you're not going to spend millions on ads" and get noticed by a lot of wealthy consumer in the prime pages of their Business Review newspapers.

bkj123 9y ago

Not sure what we can get from this article as there are so many variables... What "digital" spend was cut: paid search? online video? paid social media? brand vs. product oriented? What was the impact of non-marketing drivers like distribution, price, promo, competition, and the economy? What was the impact of (new) ad creative? Maybe take it as they are under pressure to cut expenses and cutting marketing, digital and likely non-digital, certainly helps.

ThomPete 9y ago
I don't think it really matters. The reality is that the Ad space is ridden with fraud, poorly performing networks, platforms and methods and I believe we will see an increase of companies dropping spending in digital advertising or at least consolidate around what works and internalize their ad buying (which has been done by ad buyers who literally rip customers off in the fees they take compared to the value they deliver)
ssharp 9y ago
Talking about fraud, bad websites, etc. means that it's largely display advertising. As a user, good-riddance. As a marketer, good-riddance. It's an awful platform with WAY too much money in it right now. The rise of improved algorithms for targeting promised new paths to customer acquisition but has largely been a way to bring in lots of money without delivering true results.

surferbayarea 9y ago

Hopefully a step in the direction towards cleaning the internet from the blotch of online ads. Make the internet a place to learn again and an open platform where people and businesses can exchange ideas(and data), not the silo'ed short-term profit-mongering mess it has become.

cyrusshepard 9y ago
I agree that would be amazing. Sadly, for every big advertiser that cuts back, a million others are willing to fill the void with a slightly smaller bid in order to gain exposure and eyeballs on their product. And publishers will sell it to them to keep the lights on. And yet, prices go up year after year on increased competition. Google's profit was up 29% last quarter on stronger ad sales, and Facebook was up 71% over last year. A race to the top, or the bottom?

vit05 9y ago

"after finding that ultra-niche targeting compromises reach and has limited effectiveness" “The bigger your brand, the more you need broad reach and less targeted media,” This is quite interesting. I see that other companies are cutting down on agency spending as well and some are focused on having an internal agency. The idea is to know the consumer and have a quick response to what is trending. So, apparently, the information that Facebook provides is not enough to put together a small niche group of people and say that they all would like that product. Or, at least, not worth the dollar invested. But knowing who the target consumer is, and building targeted advertising at it, but reaching a larger population has a more efficient return. Even when it reaches people who are not in the target audience of your product. Because it is a more general campaign about something that is happening, it helps in building the brand. And big companies care a lot about their brands and what people think about them.

daveFNbuck 9y ago
It's not about efficiency, it's about quantity. Let's say I profit $20 for each customer my ad engages. If I reach 1000 people with amazing targeting and get a 10% response rate, I'm making on average $2/person. If I broaden the reach to 100,000 people and get only a 1% response rate, I'm making on average $1/person. Clearly, bringing in $1/person is less efficient than bringing in $2/person, but at the end of the day you have $100,000 instead of $2,000 (ignoring the cost of the ad for simplicity). With the broad campaign, you still get the people you would have targeted with the narrow campaign. So if you're going to do the broad campaign, you're already done.
- shostack 9y ago
  Don't forget to factor in agency costs and in house costs. People are expensive and hurt margins. At that scale it adds up since I'm sure many of their agency partners view them as a big brand advertising cash pinata

laythea 9y ago

Back in the olden days where ads where more sparse, they would have so much more impact. Nowadays after the awash of ads we have everywhere, companies are collectively loosing their ability to make ads impact. (by logic, the more we are exposed to it, the less effective it it). Therefore they did it to themselves. They abused it, so that now people reject them where they can, and it becomes less profitable. No sympathy from me.

VMG 9y ago
Recently on HN: https://news.ycombinator.com/item?id=14833508 https://news.ycombinator.com/item?id=14833508 > The growth of “zero-sum” activities may, however, be even more important. Look around the economy, and it’s striking how much high-talent manpower is devoted to activities that cannot possibly increase human welfare, but entail competition for the available economic pie. Advertising seems to be a zero-sum game. I can imagine some industries cartellizing to stop it altogether.
- emn13 9y ago
  It's a pipe dream; but advertising/lobbying deserves regulatory hurdles much like other public health threats (e.g. tobacco). And before anyone shouts "freedom of speech" - we already do that extensively for stuff like fraud, libel, and incitement to violence/terrorism, so this isn't really anything particularly new. It's simply detrimental to the overall ability for us to think.
  - jpttsn 9y ago
    > And before anyone shouts "freedom of speech" - we already do that extensively for stuff like fraud, libel, and incitement to violence/terrorism, so this isn't really anything particularly new. So the slippery slope people were right after all.
    - emn13 9y ago
      Yeah. You clearly intend for this newfangled freedom of speech thing to protect critical commentary, avoid repression and promote the exchange of valuable ideas; and all of the sudden people apply it in all kinds of nonsensical counterproductive ways. Slippery slope and all... Unless of course you really think that protecting the rich & powerful's ability to mislead and trick others is really a societal benefit.

jsemrau 9y ago

This reminds me of my experience with Google Adwords. My target was to increase signups for travellers to selected cities looking for 'events nearby'. So, I selected my cities and customer segments and had a limit set of 30 Dollars / day. Regularly, I paid for 2-5 Dollar more per day than my max price. I reduced the price to actually match my max price, but this would as a result out-price me of the relevant keywords. In addition, it never brought the clicks they charged me for. Yes, I was tracking the other side of it as well. I believe there is a whole world of click-fraud with Google and Facebook in this which noone is tracking. I am looking forward to a world where Silicon Valley is tackling the 'hard' problems of this world again (Space/ Marine Exploration, Artificial Intelligence, Big Data Analytics, etc) rather then the optimization of click bait.

michaelvoz 9y ago
Perhaps rather anecdotal, but this is why I joined Uber, and did not take my Facebook or Google offers. It feels nice to work on tech that directly impacts lives and how a persons day flows. As opposed to, as you correctly put it, optimizing click bait.
- jy1 9y ago
  There are a lot of teams at Uber optimizing for click bait lol.
- nostromo 9y ago
  If Google or Facebook were gone tomorrow, I'd definitely notice. If Uber was gone tomorrow, I'd use Lyft.
  - sgt101 9y ago
    My point would be that if Uber vanished Uber drivers wouldn't, and very rapidly they would be providing their services via alternatives. My feeling is that no one would lose if this happened, apart from Uber's investors.
  - sgt101 9y ago

madetech 9y ago

Some of the responsibility for the failure of this should fall on the marketing managers and their lack of knowledge on what decent online advertising looks like. I worked in AdLand for a while and remember the agencies impressing clients with bullshit results and pure vanity metrics. Nothing about actual business results, just another thing marketing managers were seen to need to do.

jon-wood 9y ago
When I worked for an ad agency I was specifically told not to add event level tracking to campaign sites because we knew engagement was awful. We could easily give the client some great vanity metrics on things like number of visits but the moment you dug into conversion rates it all went to shit.

Steeeve 9y ago

It is very easy to waste big spends in online advertising. There are large swaths of revenue absorbing points that are completely useless or nearly useless. There are also ways to do it effectively on limited spends. Just like anything else, it requires effort. With as many channels as there are, and as many people who have found a way to avoid commercials, TV advertising is a shadow of what it used to be. These days effective and valuable marketing, especially for large brands, is hard work. No one vendor is a complete solution, and you have to consistently experiment and determine what the best options are where your target customer eyeballs happen to be landing in an ever-changing landscape. Advertising in general is ripe for disruption.

WalterBright 9y ago

As an ad exec once said, "half the money we spend on advertising is wasted. The trouble is, we don't know which half."

dabei 9y ago
It's pretty impressive performance if you manage to only waste half of your advertising spend on digital.
jansan 9y ago
Well, I just found out which half I wasted on Google AdWords. I had a campaign targeting the US. It was much less effective than I had expected, and just yesterday I found out why: There is a little option in advanced settings that lets you decide if you want to display your ads to users "in your targeted countries", or "interested in your targeted countries". The second is the default option, and if you do not change it, it will display your ads in Belarus, India, Turkey and wherever, altough you have an US-only audience. I got lots of calls from the Adwords sales team, always trying to tell me how to spend more money on Adwords. Nobody every pointed at the wrong setting, although they had all my settings and campaigns clear in front of them. I have the feeling that Google owes me a few thousand dollars.
- sumoboy 9y ago
  Plenty of reporting available that would have identified keywords and geo performance stats. Adwords seems easy enough but it's pretty complex to get things done right.
tootie 9y ago
It's closer to 99% and it always has been. Even for traditional advertising.

manigandham 9y ago

This isn't really a qualitative judgement against advertising so much as what happens in large mature industries as waste and inefficiency and perverse incentives pile up. Look at any government/military over-spending for similar effects. P&G is one of the largest advertisers on the planet using hundreds of agencies with thousands of vendors with millions of placements across digital media, managed by thousands of people trying to make themselves look good and get that bonus. This is a typical cycle of cleaning house. The industry itself is slowly getting better and will eventually fix many problems through technology and regulation but there's still a very long way to go for that.

elorant 9y ago

I have to admit that at a deeper lever I'd love if advertisers get the fuck off of the web. I don't have a problem with advertising per se but the way it's used today hurts the medium in so many ways. Sites are bloated with ads, journalism is riffled with native advertising articles, malware is mainly spread through infected ads and on top of that we have a legion of companies out there which are collecting every kind of personal information imaginable without permission or any kind of regulation. Enough is enough.

riffraff 9y ago
The trouble is: given how much of the web relies on advertising, how would things fare once ads are gone?
- albertgoeswoof 9y ago
  All the click bait bullshit would disappear pretty fast that's for sure.
- toyg 9y ago
  Well, the Internet existed before web ads were a thing, and it was a better place in many ways. I wouldn't mind losing a lot of the current noise (twitter, facebook...) to end up with a network of public services, subscription-supported businesses, and fan/volunteer-powered resources.
  - Andrenid 9y ago
    I've always loved the idea of a back-to-basics www2 project. Not enough people care about this stuff for it to ever work though. 99% of people are perfectly happy with the FB/Google/etc world.
- petra 9y ago
  When i use Google news , there's so much waste in web journalism: a million journalists rewriting the same article, and often a useless and low quality article, at that. So maybe there's a better way.

jondubois 9y ago

I think other companies might come to the same conclusion and also reduce their ad spending. We're in an advertising bubble just like the dot com bubble except this time it's not stock prices that are frothy, it's the advertising revenue itself.

yuhong 9y ago
I said before that printing money using basic income would only inflate it. Ads are designed to increase consumption, and we have a debt-based economy.

mtgx 9y ago

Glad to see all of that advanced internet surveillance technology is being put to good use... So much for the argument that tracking is helping companies serve you better ads.

m-j-fox 9y ago

Fucking downvotes? Why can't someone say something matter-of-factly? HN, you broken.

m-j-fox 9y ago
Downvote this one too. Can't tolerate criticism.
- m-j-fox 9y ago
  You can do better. I've still got useless internet points to spend.
sctb 9y ago
Please stop violating the guidelines (https://news.ycombinator.com/newsguidelines.html https://news.ycombinator.com/newsguidelines.html). We detached this subthread from https://news.ycombinator.com/item?id=14879917 https://news.ycombinator.com/item?id=14879917 and marked it off-topic.
- m-j-fox 9y ago
  You wrote guidelines! (But still the only way to find out about them is to violate a few. Ex post facto.)
  - detaro 9y ago
    They are linked in the footer appearing on nearly every page of HN (and have been for years). Comments about downvotes are explicitly addressed in them, so not much room for interpretation there either.
    - m-j-fox 9y ago
      I see that now, but, 58 days ago, dang said: > It's impossible to write everything down, it would be boring to try, and the reward for such foolishness would be even worse behavior. The commenters who most poison internet forums are experts in adapting to rules so they're technically not violating them. https://news.ycombinator.com/item?id=14455714 https://news.ycombinator.com/item?id=14455714 So maybe tell dang about the guidelines.

raverbashing 9y ago

It seems the issue is "overtargeting" of ads P&G ads don't work like that. Their products appeal to a broad range of people, same as their ads. Specialized targeting literally does nothing to improve conversion (and keeping their product in mind)

dmurray 9y ago
They sell a broad range of products, but not all of them appeal to a broad range of people. They can surely improve conversion by marketing men's razors to men and women's razors to women, for example.
- ffumarola 9y ago
  That's still considered broad targeting.
- raverbashing 9y ago
  Yeah but still, men and women "targeting" is basic stuff What online ads allow you to target is "men between 28-32 from eastern Europe who like Formula 1 and Classical Music"

JD557 9y ago

Slightly relevant to the discussion, since P&G seems to have started make some changes to their digital marketing strategy earlier this year (It seems to have been a major change, since one of the companies actually had to shut down). https://adexchanger.com/advertiser/pg-parts-audience-science-tees-neustar-dsp-posse/ https://adexchanger.com/advertiser/pg-parts-audience-science... https://adexchanger.com/platforms/audiencescience-shuts-doors-less-month-pg-client-loss/ https://adexchanger.com/platforms/audiencescience-shuts-door...

kartan 9y ago

This is just one company. I worked for a big mobile games company, and their main complaint was how expensive where ads nowadays. They used to pump millions and get as many players as they wanted. Now you need to take a lot of care on how you spend your money, as the return of investment is not guaranteed if you pay too much. If other companies follow suit, then we can talk about a more general issue. Maybe it is just that their campaigns were ineffective because were not good, or because their target users are not reached on digital ads.

paulpauper 9y ago

It seems like a lot until you consider that the total annual ad spend (just for Google alone) in in the tens of billions

losteverything 9y ago

Can anyone enlighten me on P&G cost cutting and board activity? I've read they are "hurting" wondering if this is just cost cutting and not a deep analysis of ad/$ performance.

wslh 9y ago

You can ask: if this is not working for P&G why will this work for you. I have mixed experiences. If I am attacking a niche where the user will act immediately after finding you exist then it works, if you are targetting a big market with a lot of competitors it is not worth the money and time except you discover new specific keywords.

nickhalfasleep 9y ago

How many brands could just cut out the traditional or sales-based advertising and go for quality and word of mouth growth like ANKER? Nothing sells me on a product like a happy customer. I scroll past the adds and related items on sites and dive right for the comments. Or just ask around work for what people use for X.

ikeboy 9y ago

>After cutting back on certain digital ads, “we didn’t see a reduction in the growth rate,” >P&G, whose brands include Bounty, Crest, Tide and Pampers, spent $2.45 billion on U.S. advertising, not including spending on some digital platforms So, even if digital advertising performed on par with everything else, it would only affect the growth rate by 5% of the effect other advertising had. Surely other factors contribute to variability at least enough that an overall effect cannot be determined using this data?

ameister14 9y ago

I've worked in and around marketing/advertising for the last 6 years in different capacities and have found that the emphasis on audience hyper-segmentation and retargeting to the exclusion of other methods is the single biggest piece of bullshit out there. Targeting people based on what they are apparently interested in vs. places they go that reflect those interests doesn't give better results and can turn off your customers. It sounds cool to marketing teams and it works to get you contest entries, but it doesn't usually translate to more conversions than a well managed campaign would give. If I buy a mattress, advertising more mattresses to me doesn't make me more likely to buy them; I bought the thing already. Advertising mattresses to a person on a mattress review website, though - that works. Of course, that's harder to do.

lithos 9y ago
Still getting TONS of car advertising, after I bought one 8 months ago (when I see it). seriously car ads are what pushed me to JavaScript off by default since their ads are almost as rude as porn ads. Even the normal advertising reset trick of "open all in new tab" on a folder with a dozen cloud/server hosts didn't swap out advertising to their normally sane ads.
- autokad 9y ago
  i bought my friends kid a backpack that looked like an owl. i got advertisements for the it for a few weeks after, which was strange to me. I bought the backpack on amazon, and the advertisements were amazon. didn't they know I bought it already? didn't they know I probably didn't need 2 of them?
- willhslade 9y ago
  Can you elaborate on the reset trick? It's new to me.
  - deleted 9y ago
    [deleted]
  - lithos 9y ago

jgalt212 9y ago

Does P&G have a substantial in house ad tech operation? They advertise so much that they could probably start their own DSP and license its services to others.

bryananderson 9y ago

I formerly worked as a digital influencer across the usual list of content platforms. One of my last influencer marketing gigs was for a major multinational company. You've heard of them and they are not amateurs when it comes to marketing. I asked one of their top marketing people how they measure the impact of digital influencer campaigns like ours. The short answer is that they don't. They have no idea how to. When trying to measure the impact of marketing upon sales, teasing the signal out of the noise is almost impossible to do with confidence, especially for huge companies running many campaigns at any given time. I suspect this is true for all advertising, not just influencer marketing. With few truly reliable metrics, marketers fall back on conventional wisdom. For a long time, conventional wisdom has been that you have to pour a ton of your marketing budget into digital or you're being left behind. A change in that conventional wisdom seems to be afoot. I saw it as a digital content creator - ad revenues per view have been declining for a while now. Aside from the short-term panic over ads appearing next to extremist content, there might be something more long-term that's changing in corporate marketing strategy. It's hard to see how this, and not a challenge from a new startup, is not the greatest threat to the success of Google and Facebook. Their business is digital advertising. If spending in that field declines, it's probably rough times ahead for those giants.

chokma 9y ago
Do you mean digital influencer in the sense of social influencer? The latter can be measured quite well, depending on the method. Using affiliate-like CPC click-through links on their social media accounts allows the ad network to observe exactly what is working. The problem is that social influencer status probably only really works for stars with a huge following of real life fans. One example (@work) was a celebrity posting about a nice pair of shoes. Those sold out within minutes, and the shoe company's store page crashed due to the unexpected demand. So it can work, but like most things in marketing, if everyone does it, it won't work for most.
- mattzito 9y ago
  I think you're overestimating how well social influencers can be measured. It's true, you can measure clicks to a landing page, one per influencer - but that's relatively annoying administratively, and only measures clicks, not sales. Plus, that counts on your influencer actually following instructions and using the custom landing page URL, which is harder than you might think. If you're a consumer lifestyle or luxury brand, most of your sales are in-store and hence attribution due to influencers becomes incredibly difficult. What many companies I've seen do is attempt to measure organic reach through a variety of internal or external scoring mechanisms, and using engagement as a proxy for reach. So a beauty influencer posting a screenshot of her travel bag with your brand tagged would have comments, likes, reshares/regrams measured, and then have that scored as some sort of an effectiveness index.

jshelly 9y ago

In my own personal experience, I can honestly say I've never "intentionally" clicked on an ad in the past 20+ years I've been on the internet. I will say I've certainly looked at ads in magazines, billboards, tv commercials (before tivo) and even those small planes pulling banners at the beach. I am not surprised that digital marketing is not that effective. What does surprise me is why its taken this long to figure that out.

nsxwolf 9y ago
Magazine ads are often fun to look at. Great photographs. Sometimes very entertaining or interesting ad copy to read. Often informative. Most importantly they are usually for valuable, useful, and desirable products. Banner ads on the other hand...
reitanqild 9y ago
Given the amount of stupid ads I see I sometimes click one when I see something that is remotely interesting (dev tools etc), hoping to train googles AS (Artificial Stupidity) to serve me more relevant ads. (No, I'm still happily married and I cannot figure out why a company that sits on my personal email and most of my internet searches for the last 15 years cannot figure that out. Especially as I have even configured my ad preferences in the settings.)
- tzs 9y ago
  I can't figure out why Zillow thinks I'd be interested in houses in Palo Alto. They regular send me emails about houses they think I might be interested in, and they are in the Palo Alto area. The only reason they have my email address was because I made an account so I could claim my house on Zillow, so they know exactly where I live, and that is 850 miles from Palo Alto.
  - deathhand 9y ago
    They can target based upon income level and job. You being you means that if you went to the Palo Alto region you would find very similar people.

mathattack 9y ago

People spend more time on devices than TVs so advertising will follow in the long term. In the short term it will take companies like this to force the ecosystem to keep clean.

chiefalchemist 9y ago

Make ya wonder how many pre internet TV and print ads they would have sacked if they had the ability to truly measure their effectiveness. Ya also have to wonder how they got to $100,000,000 worth of ads before they decided to pull back.

AndrewKemendo 9y ago

Honestly, I'm waiting for the internet advertising apocalypse wherein retailers cut digital ad spending because ROI is too low - and only advertise on Facebook or other sites with super targeting. That would effectively kill a good chunk of internet services. [1] https://marketinginsidergroup.com/content-marketing/marketers-frustrated-with-digital-advertising-roi/ https://marketinginsidergroup.com/content-marketing/marketer...

muro 9y ago
Search ads for retailers have solid ROI, it would be counterproductive to reduce them. Ads on random websites are more challenging, as the intent is further removed, but still could have good ROI, just need to be cheaper.
marssaxman 9y ago
I would be very happy to see that happen. I miss the old, useful, social internet.

deleted 9y ago

[deleted]

joh-nan-drew 9y ago

Marketing is the price you pay to get attention. All marketing is a hack for attention. Being data-driven and figuring out the 1% of your digital ads that are working, then capitalizing on them, is a hack. Using a unique marketing distribution channel or method is a hack. Embedding the marketing into your product is a hack. These are all "growth" hacks. Cutting in front of the line is a hack to get your lunch faster, but if everyone's doing it, the hack starts to lose effectiveness. Not that digital ads today are ineffective, but I do think its methods have reached notable saturation points.

teej 9y ago
I think you're painting with too broad strokes by likening all marketing to hacks. Marketing is more like finding alpha in a changing, inefficient market. There are going to be short term and long term strategies that work. The only guarantee is that things will change with time and those with more information will beat those with less.
- joh-nan-drew 9y ago
  That sounds right. I look upon the word "hacking" favorably and use it broadly to mean something like "manipulating a system for a particular outcome" rather than just This One Simple Trick, sorry if I wasn't clearer. I like the guarantee. That's why hacking in the conventional sense today-- which needs constant awareness, involvement, adaptation, experimentation to find out what works, non-codified intelligence, and dealing with the reality of a system -- can beat the process du jour. It might become the new canonical process if everyone else starts doing it. Sometimes I feel like long-term or well-thought-out strategy is the hack in a sea of self-proclaimed hackers who focus on useless wins and optimizations.

codersbrew 9y ago

This is a by product of Programmatic Advertising. If you can't get your demand sold direct you have to go to less reputable publisher sites.

Xyik 9y ago

I work on an engineering growth team that focuses on large-scale digital advertising and can say it does work, for the right business, in the right context. You need a proper analytics team, engineering team, and experience to do it right. Most people who buy online ads have no idea what they are doing.

code4tee 9y ago

Anyone that's ever taken a serious look at online advertising knows that the elephant in the room is that most of it doesn't work. P&G is just the latest large firm to call that out.

heliophobicdude 9y ago

I'm sorry to be that person, but if others start pulling their digital ads too, what effects with this have on the whole tech industry. Google and Facebook, who both are the face of the industry, would most likely get most of the blow. They both control over 77% of digital ad revenue [1]. Will that scenario only hurt those two and other ad providers in isolation or will investors reconsider tech company stocks as a whole? [1] http://fortune.com/2017/04/26/google-facebook-digital-ads/ http://fortune.com/2017/04/26/google-facebook-digital-ads/