6 ms·

Can you point me towards credible work determining ROI for online advertisement? Whats the current state of the art? edit: I should rephrase, this sounds hosti

by cf498 8y ago

Can you point me towards credible work determining ROI for online advertisement? Whats the current state of the art? edit: I should rephrase, this sounds hostile. I know there is wide work in influencing people to buy stuff when influenced in person. The interpersonal dynamics are widely studied. I also know, that chumming content and goating works to gather more views, but that can only be turned into a ROI by people paying for ads to serve those viewers. There is also the segment of ads, which offer a discount, but what about all the rest? Does banner or clip advertisement actually provide a measurable return of investment? Does online advertisement offer brand recognition, and does it provide a ROI? Are the adverse effects studied, so that people actively despise brands for offensive ads? What are the going rates for views and reactions to online advertisement vs traditional marketing? In short, what is the state of the art of research into online advertisement?

cwkoss 8y ago
Also interested. I suspect the lack of noise is a result of lack of impressive results.
deleted 8y ago
[deleted]
downandout 8y ago
There are two distinct areas of online advertising: performance marketing, and brand advertising. I'm a performance marketer. I make a profit only when ads result in conversions - usually sales or signups for trial offers, but in some cases we do lead generation campaigns for clients as well. We spend high 5/low 6 figures per month, mostly on Facebook ads, with a monthly ROAS (return on ad spend) that beats Berkshire Hathaway's annual returns. The idea that online advertising cannot work is absurd. The schemes mentioned in articles like this are almost exclusively targeted at brand marketers. My guess is the problem lies in the way that large brands incentivize the people running their campaigns, because the technology exists to knock out the vast majority of this type of fraud. Companies like Coke hire ad firms that send them reports about impressions, and they are thus incentivized to not pay attention to traffic quality, and just maximize impressions. That has to be the problem, because just my internal traffic quality tools that I have written would have shutdown ad delivery on the sites sending such obviously bad traffic within a few clicks from each referrer - and I don't claim to have written the most sophisticated filter out there. There are many ways to do reality checks on traffic, on a per-referrer basis, and cut out much of this stuff. Webview traffic (the kind being taken advantage of here) is among the easiest to detect. As to your question about measuring ROAS it's simple for performance marketers. Take your ad spend and compare it to revenue. I'm not sure that brand marketers have a reasonable way of determining ROAS, either online or in the physical world. I suppose they could take brand recognition surveys and compare before/after a given campaign, but that is hardly an exact science.
- DeGi 8y ago
  And without doing experimental setup (RCTs), how do you know you are not just paying for organic conversions? I had this presentation a few months ago: https://www.slideshare.net/mobile/gregak/if-youre-not-measuring-advertising-effectiveness-through-rcts-youre-doing-it-wrong-102417409 https://www.slideshare.net/mobile/gregak/if-youre-not-measur... I would be interested to know what you think.
  - downandout 8y ago
    Very interesting presentation. The question your research is attempting to answer is certainly a valid one for major sites, where people might be on the site anyway without having clicked on a given ad. In my specific case, most of the sites/offers we market through Facebook ads wouldn't have attracted many organic visitors, let alone conversions, on their own, so it's not a question I need to answer. These sites rely almost entirely on paid traffic, and if they don't get it they are out of business. The importance of being able to figure out what actually led to conversions is not lost on me though. One unique technology I created allows us to do something that I have never seen anyone else in the online marketing world do: track conversions back to the initial click and ad campaign, even if someone just texts, emails, or uses an instant messenger to send the URL to a friend. So let's say someone visits the site, sees that the offer isn't for them but texts it to a friend. A month later, that friend finally gets around to looking at it, but decides it isn't for them either but knows someone else who might be interested, and they email it to someone else, who ultimately converts. We can track that conversion and all the steps in between back to the initial click and attribute it to the initial ad campaign, which gives us a much better sense of what each ad campaign is actually producing. The technology also lets us create custom Facebook audiences of anyone that has shared a link from the site - regardless of how they shared - text, email, Facebook - doesn't matter. We can then customize campaigns to encourage those people to share again.
    - DeGi 8y ago
      If close to 0 of your traffic is organic, then you don’t have to care too much about the whole correlation vs. causality problem, yes. What you describe is certainly interesting. I guess you are building a graph of unique IDs, with each shared URL containing the ID of the parent as a query param or something like that?
simtam 8y ago
Shall I point you towards some keywords: ghost ads, conversion lift, brand lift studies. But what does it have to do with the ad fraud?
- cf498 8y ago
  I dont think its surprising, that people are involved in scams when it comes to advertisement. We know possible targets try to scam the system, this article shows so. We know, that certain parts of advertisements are trying to sell stuff to people they dont need. As naive as it sounds, most advertisement isnt there to inform us of stuff we dont know of and would want to buy if we knew. And if you pay people to make other people act against their own interests, it is not unreasonable, that they would do the same to the people hiring them. And not just the same, but alot more. I think its only reasonable to assume, that professional scammers would not just try to scam the people, they are payed to scam, but also the people who pay them in the first place, who offer a much larger payout. Why wouldnt advertising agencies not put alot more effort in convincing potential customers of their own, that they need their advertisement, then trying to influence the potential customers of their customers on the abstract level of brand awareness. If brand awareness is not a matter of ROI but bullshit and just a matter of triggering interpersonal marketing mechanisms. "Your competition is spending this amount on" brand awareness and all the other true and tested mechanisms. Marketing your advertisement services to companies for brand awareness sounds like just another sales gig. And one where the methods are true and tested. Be it selling used cars or selling you your appearal as your image or selling the concept of creating a brand throguh digital ads. Lobbying works for a reason in politics. My question was, if there is a reason to not assume the same for online banner marketing for brand awareness. Thank you for your keywords, i will look them up.
milesskorpen 8y ago
https://www.statista.com/statistics/225474/booking-holdings-operating-expenses/ https://www.statista.com/statistics/225474/booking-holdings-... Booking Holdings, for example, spent $4.1 billion dollars in 2017 on performance advertising. This would generally mean they had an ROI target (e.g., each dollar of spend should return $1.2 in revenue). The method of measuring this would generally come from an agreement between the marketing team and the finance team — it might require some assumptions on things like LTV or the value of certain actions, but the finance team would be major participants in determining this value. There's no way Booking or similar massive advertisers are spending billions of dollars without a very very clear POV on the return they're receiving. I think a lot of the "state of the art" that you're asking for won't be shared with the public by these companies.
- hn_throwaway_99 8y ago
  As pointed out elsewhere in this thread, however, there is a big difference between performance marketing, where it's relatively easy to track conversion, vs brand marketing. In fact, a huge reason Booking is so successful is because their sites convert at a higher rate than their competitors (which they themselves attribute to an early and maniacal focus on A/B testing), and thus they are able to bid more for travel-related search terms on Google as each click is worth more to them. It's pretty easy for them to track what percentage of Google AdWords click-throughs result in a completed booking. Brand advertising, though, has much fuzzier metrics, and the incentives for brand advertisers is to show that they have a larger impact than they actually do.

by cf498 8y ago

cwkoss 8y ago

Also interested. I suspect the lack of noise is a result of lack of impressive results.

deleted 8y ago

[deleted]

downandout 8y ago

There are two distinct areas of online advertising: performance marketing, and brand advertising. I'm a performance marketer. I make a profit only when ads result in conversions - usually sales or signups for trial offers, but in some cases we do lead generation campaigns for clients as well. We spend high 5/low 6 figures per month, mostly on Facebook ads, with a monthly ROAS (return on ad spend) that beats Berkshire Hathaway's annual returns. The idea that online advertising cannot work is absurd. The schemes mentioned in articles like this are almost exclusively targeted at brand marketers. My guess is the problem lies in the way that large brands incentivize the people running their campaigns, because the technology exists to knock out the vast majority of this type of fraud. Companies like Coke hire ad firms that send them reports about impressions, and they are thus incentivized to not pay attention to traffic quality, and just maximize impressions. That has to be the problem, because just my internal traffic quality tools that I have written would have shutdown ad delivery on the sites sending such obviously bad traffic within a few clicks from each referrer - and I don't claim to have written the most sophisticated filter out there. There are many ways to do reality checks on traffic, on a per-referrer basis, and cut out much of this stuff. Webview traffic (the kind being taken advantage of here) is among the easiest to detect. As to your question about measuring ROAS it's simple for performance marketers. Take your ad spend and compare it to revenue. I'm not sure that brand marketers have a reasonable way of determining ROAS, either online or in the physical world. I suppose they could take brand recognition surveys and compare before/after a given campaign, but that is hardly an exact science.

DeGi 8y ago
And without doing experimental setup (RCTs), how do you know you are not just paying for organic conversions? I had this presentation a few months ago: https://www.slideshare.net/mobile/gregak/if-youre-not-measuring-advertising-effectiveness-through-rcts-youre-doing-it-wrong-102417409 https://www.slideshare.net/mobile/gregak/if-youre-not-measur... I would be interested to know what you think.
- downandout 8y ago
  Very interesting presentation. The question your research is attempting to answer is certainly a valid one for major sites, where people might be on the site anyway without having clicked on a given ad. In my specific case, most of the sites/offers we market through Facebook ads wouldn't have attracted many organic visitors, let alone conversions, on their own, so it's not a question I need to answer. These sites rely almost entirely on paid traffic, and if they don't get it they are out of business. The importance of being able to figure out what actually led to conversions is not lost on me though. One unique technology I created allows us to do something that I have never seen anyone else in the online marketing world do: track conversions back to the initial click and ad campaign, even if someone just texts, emails, or uses an instant messenger to send the URL to a friend. So let's say someone visits the site, sees that the offer isn't for them but texts it to a friend. A month later, that friend finally gets around to looking at it, but decides it isn't for them either but knows someone else who might be interested, and they email it to someone else, who ultimately converts. We can track that conversion and all the steps in between back to the initial click and attribute it to the initial ad campaign, which gives us a much better sense of what each ad campaign is actually producing. The technology also lets us create custom Facebook audiences of anyone that has shared a link from the site - regardless of how they shared - text, email, Facebook - doesn't matter. We can then customize campaigns to encourage those people to share again.
  - DeGi 8y ago
    If close to 0 of your traffic is organic, then you don’t have to care too much about the whole correlation vs. causality problem, yes. What you describe is certainly interesting. I guess you are building a graph of unique IDs, with each shared URL containing the ID of the parent as a query param or something like that?

simtam 8y ago

Shall I point you towards some keywords: ghost ads, conversion lift, brand lift studies. But what does it have to do with the ad fraud?

cf498 8y ago
I dont think its surprising, that people are involved in scams when it comes to advertisement. We know possible targets try to scam the system, this article shows so. We know, that certain parts of advertisements are trying to sell stuff to people they dont need. As naive as it sounds, most advertisement isnt there to inform us of stuff we dont know of and would want to buy if we knew. And if you pay people to make other people act against their own interests, it is not unreasonable, that they would do the same to the people hiring them. And not just the same, but alot more. I think its only reasonable to assume, that professional scammers would not just try to scam the people, they are payed to scam, but also the people who pay them in the first place, who offer a much larger payout. Why wouldnt advertising agencies not put alot more effort in convincing potential customers of their own, that they need their advertisement, then trying to influence the potential customers of their customers on the abstract level of brand awareness. If brand awareness is not a matter of ROI but bullshit and just a matter of triggering interpersonal marketing mechanisms. "Your competition is spending this amount on" brand awareness and all the other true and tested mechanisms. Marketing your advertisement services to companies for brand awareness sounds like just another sales gig. And one where the methods are true and tested. Be it selling used cars or selling you your appearal as your image or selling the concept of creating a brand throguh digital ads. Lobbying works for a reason in politics. My question was, if there is a reason to not assume the same for online banner marketing for brand awareness. Thank you for your keywords, i will look them up.

milesskorpen 8y ago

https://www.statista.com/statistics/225474/booking-holdings-operating-expenses/ https://www.statista.com/statistics/225474/booking-holdings-... Booking Holdings, for example, spent $4.1 billion dollars in 2017 on performance advertising. This would generally mean they had an ROI target (e.g., each dollar of spend should return $1.2 in revenue). The method of measuring this would generally come from an agreement between the marketing team and the finance team — it might require some assumptions on things like LTV or the value of certain actions, but the finance team would be major participants in determining this value. There's no way Booking or similar massive advertisers are spending billions of dollars without a very very clear POV on the return they're receiving. I think a lot of the "state of the art" that you're asking for won't be shared with the public by these companies.

hn_throwaway_99 8y ago
As pointed out elsewhere in this thread, however, there is a big difference between performance marketing, where it's relatively easy to track conversion, vs brand marketing. In fact, a huge reason Booking is so successful is because their sites convert at a higher rate than their competitors (which they themselves attribute to an early and maniacal focus on A/B testing), and thus they are able to bid more for travel-related search terms on Google as each click is worth more to them. It's pretty easy for them to track what percentage of Google AdWords click-throughs result in a completed booking. Brand advertising, though, has much fuzzier metrics, and the incentives for brand advertisers is to show that they have a larger impact than they actually do.