4 ms·

I honestly expect adtech to bust at some point. At the end of the day, there are a lot of limits on how successful any ad campaign can be. How much budget you

by hakfoo 7y ago

I honestly expect adtech to bust at some point. At the end of the day, there are a lot of limits on how successful any ad campaign can be. How much budget your target has, how elastic it is, how much demand is inherent to the product type. Even with perfect 24/7 targeted advertising, Toyota's maximum possible upside is selling me one Camry every two years. Once they reach that point, any further marketing spend is wasted. There's also the problem of advertising being imperfect. We'll always have faulty data, and importantly an trustless adversarial relationship with the consumer, which will limit the ability to improve ad effectiveness. (Imagine the opportunity to say in one central place "I have bought a widget, everyone I researched with can discontinue the widget post-visit campaign as there's no further chance of victory"-- advertisers wouldn't go for it and consumers wouldn't believe it). I also suspect tighter and tighter targeting increases the risk of catastrophic ad failure-- where it undermines the brand's reputation or creates public backlash. The Uncanny Valley can be one hostile place for brands. Do expensive, high-tech ads outperform cheap spray-and-pray techniques like TV spots and dumb banners? Probably. But I suspect the price-performance curve is approaching an asymptote pretty quickly. Billions are spent to chase increasingly small gains in actual sales over older, less creepy techniques. Someone's going to do the numbers and start asking questions.

ThrustVectoring 7y ago
The real advantage of "smart" advertising isn't in better business performance, but of better legibility of the advertisement's performance. The cheap spray-and-pray techniques might work, but you don't know how well they work, so you make a guess and bid on it based off the low end of the range. With perfect information about how well an advertising campaign works, you can convince the rest of the org to spend up to 100% of the profit margin of a sale on enough marginal advertising to drive one additional sale. In other words, the end state is measuring ad performance well enough that spending on ad buys wind up cannibalizing all the corporate surplus generated from them.
cameronbrown 7y ago
> Even with perfect 24/7 targeted advertising, Toyota's maximum possible upside is selling me one Camry every two years. Once they reach that point, any further marketing spend is wasted. Not necessarily. Growing their brand and making it more trustworthy has intangible benefits, but they do exist. The idea is to make you feel better about their company.

by hakfoo 7y ago

ThrustVectoring 7y ago

The real advantage of "smart" advertising isn't in better business performance, but of better legibility of the advertisement's performance. The cheap spray-and-pray techniques might work, but you don't know how well they work, so you make a guess and bid on it based off the low end of the range. With perfect information about how well an advertising campaign works, you can convince the rest of the org to spend up to 100% of the profit margin of a sale on enough marginal advertising to drive one additional sale. In other words, the end state is measuring ad performance well enough that spending on ad buys wind up cannibalizing all the corporate surplus generated from them.

cameronbrown 7y ago

> Even with perfect 24/7 targeted advertising, Toyota's maximum possible upside is selling me one Camry every two years. Once they reach that point, any further marketing spend is wasted. Not necessarily. Growing their brand and making it more trustworthy has intangible benefits, but they do exist. The idea is to make you feel better about their company.