24 ms·

What do we really know about the effectiveness of digital advertising?

500 points by anielsen 7y ago

mars 7y ago
I disagree with the author. Although all points outlined in the article might be independently true, making a general rule out of it is not ok. Especially modern, agile marketing teams that understand the importance of testing and learning are able to produce campaigns that generate positive ROI/ROAS. Sidenote: Co-founder of Admetrics here. We provide an experimentation solution that enables businesses to run marketing experiments on their data at pace, so we see a lot of test results on a day to day basis.
zecg 7y ago
Anecdotally, a bubble sounds right, since I know I never see an ad anywhere. Firefox + ublock on both computer and mobile, never even consider a smartphone app if it has ads. So how can it be effective?
tempodox 7y ago
Has anyone ever been fired for buying digital ads? Also, there are enough examples that show that the toxicity or ineffectiveness of a technology becomes immaterial once a sufficient number of jobs (and other vested interests) depend on it.
mikeiz404 7y ago
Moral of the story: If you’re not testing the null hypothesis when measuring ROI on ads you might not be measuring what you think
mlang23 7y ago
What I notice is that internet advertisment is pretty selective, I dont know about effective... If your interests happen to diverge from mainstream just that bit enough, you can end up in a pretty much ad-free zone. I happen to watch a lot of conference recordings on YouTube, and most conferences dont monetize their channel (yet). But thats not the end of the story. Stay away from mainstream, and you get complete ad-free shows. Take Joe Rogan for instance. The people he hosts are largely pretty interesting, but the way he does controversial topics pretty much led YouTube to demonetize him. Which, for the consumer, is a blessing. Because you get 3h talkshows without a single bit of advertisment. Or ARTE, which is a german/french coop television provider. They have very interesting content, but a policy of not enoying with ads. Which makes their YouTube channel even more worthwhile subscribing to. I could go on, the pattern seems to be the same. To be honest, the more cheesy a program is, the more likely it is that you will be flooded with ads.
- d0mine 7y ago
  > stay away from mainstream Joe Rogan's podcast has millions of subscribers and multiple ads per episode (not counting ads on various cuts/highlights from the episode) — are there more mainstream podcasts on youtube?
  - mlang23 7y ago
    Interesting, I dont see this. I used to watch JRE on youtube with my iPhone, and now consume the same channel via an Apple TV 3. I never got a single ad. I know that he is doing his own ads at the beginning of the show, but only in the podcast version. The YT JRE shows are completely ad-free for me.
- elkos 7y ago
  > I could go on, the pattern seems to be the same. I think a lot of people would be interested on similar examples
- pjc50 7y ago
  So, how is Rogan funded? And what is he advertising? His Patreon? Product placement? Ideological placement?
  - k_bx 7y ago
    Only a portion of his shows gets demonetized, far from all
  - alvah 7y ago
    There are over 5 minutes of ads at the start of every Joe Rogan podcast, as well as others throughout. One analyst suggests Rogan has acheived a net worth over $1bn based on the number of downloads & estimated advertising revenue based on those figures: http://www.insideradio.com/podcastnewsdaily/joe-rogan-podcast-billionaire-and-poster-boy-for-subscription-podcasts/article_05317272-cffc-11e9-be43-2f6532b4be9c.html http://www.insideradio.com/podcastnewsdaily/joe-rogan-podcas...
    - 7y ago
rhys91 7y ago
The biggest ruse is Facebook convincing marketeers and agencies alike that three seconds counts as a video view. They justify this by saying people don't want to watch videos are attention deficit. The truth is that very few people want to watch an ad. But if there's a strong enough value exchange with the consumer, they will. Just make effective content that's emotive, funny or offers utility. Creatively, the impact of this is clients wanting ALL the messaging in the first three seconds of video content, which often causes the consumer to skip the rest of the content anyway.
The_Corres 7y ago
This article was published by The Correspondent, a new media startup funded by members – if you'd like to read more by the journalists you can become a member (pay-what-you-like)https://thecorrespondent.com/ https://thecorrespondent.com/ | or follow us on Twitter --> @The_Corres, @jessefrederik, @mauritsmartijn
vivekd 7y ago
I do not work for google facebook or any other internet company. I do however purchase online ads for my law firm. I also tried turning off the ads for a few weeks to disastrous results. I can say the big problem in the examples in this article is the keyword selection. For example ebay advertising the word ebay to customers who are googling the word ebay is probably fruitless for the most part. Those people were already looking for ebay and would find it with or without the ad. However if you are a lesser known online auction and you use the keyword "internet auction" or something similar, it would probably help. This article, to me, seems to be more about the importance of experimenting and critically evaluating the data rather than an actual indictment on online marketing. With online marketing there is no clear answer: what keyword you bid on, how you target, how you write your ad copies, how your competitors are behaving all come into play. It's difficult for anyone to parse through those factor and really come out definitively as to whether online marketing is effective or ineffective in general. We can only do the smaller measurements and see if our particular ads are effective for our particular business, which in the end is all any of us who buy ads really care about.
wyxuan 7y ago
I can’t read the article but I think it’s starting to deflate on its own. Like when J.P. Morgan stopped advertising on google after the whole controversy of ads being shown in front of extremist content and realized it didn’t make a difference.
- the_mar 7y ago
  you can, just click "maybe later" at the bottom where it says "become a member"
  - godson_drafty 7y ago
    I did that, and then afterwords it told me that the article was being gifted to me buy a paying member. After that I just closed the tab. It is kind of a stroke of genius, encouraging me to sign up by showing me that I'm enjoying the largesse of a paying customer. On the other hand, if letting me read the article is such a huge imposition, I guess I don't want it.
    - tkoolen 7y ago
      The paying member is the first author.
    - the_mar 7y ago
      im not here to engage in the debate about how much we hate online subscriptions. I'm just commenting on garbage UI trying to trick you to subscribe and pay for an article that isn't really paywalled
moltensodium 7y ago
Maybe this is just a generational thing, but I still have never clicked on an ad. I hate ads. I don't know anyone who likes them. I don't know anyone who has intentionally clicked on them. I have literally never met anyone who places any value in advertising at all. Everyone hates it with 100% of their being. It is the garbage we all just sort of accept exposure to as some sort of fee for existing online. Who are all these people that subverted technology and turned it into advertising-tech?
- Ididntdothis 7y ago
  I never click on ads either but when I see an ad often enough (even if I don’t pay attention) my mind gives that product more credibility.
  - didericis 7y ago
    That effect seems highly relative to the context in which you see an ad, and I wouldn’t be at all surprised if it was intentionally exaggerated when studied. Certain contexts increase credibility with certain people, others decrease credibility. What it does do is actually put the product in front of your face. People won’t buy your thing if they’ve never seen or heard of it. So I agree there’s value to ads even if people don’t click on them in that moment. That doesn’t mean their value isn’t inflated.
- riffraff 7y ago
  I keep ublock on all the time except on some sites. Sometimes, there is a worthy ad (e.g. one month free audible, cause I visited the site). I don't resent ads, I am totally fine with them, and if they help sustain some site I use, I am happy. The problem is when they are taking over the whole experience.
- jasode 7y ago
  >I have literally never met anyone who places any value in advertising at all. Everyone hates it with 100% of their being. I like ads -- but only if they're relevant to my interests. There lies the problem: 99% of all ads are not relevant to my interests. For online ads, 99.99% of ads are not relevant to me. So, I use a DNS blocker to filter out ads.
ghaff 7y ago
It's seemed pretty obvious for a good decade that, if a bubble were going to pop, it would probably be related to advertising. Because if online advertising falls off a cliff, that hits two of the big tech employers directly. And you can be sure there would be major secondary effects on all the companies whose plan is to more or less never make money but be acquired.
- deleted 7y ago
  [deleted]
loeg 7y ago
"New"? Pinboard-guy Maciej Cegłowski has been harping on this for years now: https://idlewords.com/2015/11/the_advertising_bubble.htm https://idlewords.com/2015/11/the_advertising_bubble.htm
leoedin 7y ago
I've always wondered about those adverts for the website I'm searching for. If I type its name into Google, I'm already 100% committed to going there. Sometimes I click the advert (it generally depends how much I like the company). The other aspect of online ads that strikes me as ingenious but probably not sustainable is the way Google inflates the auction system with fake money. Anyone who's run a website will have received a letter offering hundreds of dollars of free advertising with Google. Of course, it's an auction so the presence of that money just drives up the cost for everyone. Google wins every time!
- cubedrone 7y ago
  There was a post about this recently. They need to buy the ad to keep their competitor from being the first result. https://www.seroundtable.com/basecamp-google-ad-28161.html https://www.seroundtable.com/basecamp-google-ad-28161.html
  - pizzaparty2 7y ago
    Well, at least there is no law allowing ISPs to serve their site more slowly unless they pay a ransom (I mean business professional tier).
- Disruptive_Dave 7y ago
  It's a defense strategy. And it's necessary.
  - harry8 7y ago
    "Nice organic customer flow you've got there. It'd be a shame if it all went away because you didn't pay us." --Google
    - buboard 7y ago
      "It's not our fault that our ads look entirely identical to our search results"
- 7y ago
ngngngng 7y ago
> a Super Bowl ad cost three million dollars. Why? Because that’s how much it cost. What does it yield? Who knows. This article is awesome. In my free time I'm building an advertising platform that topic matches ads off the content of the web pages. No tracking of users. I'm hoping to allow people to host and run their own all inclusive self contained advertising platform for just a licensing fee. I also have a way to beat adblockers that I'm afraid of bringing to light since I only want it tied to my own companies completely non tracking and ethical ads. Hope it's not a bubble! Though first I have to finish the work and get a few customers so it's not like I can't pivot if it is.
- temp9187324980 7y ago
  > I also have a way to beat adblockers You'll never beat uBlock origin. https://news.ycombinator.com/item?id=21036260 https://news.ycombinator.com/item?id=21036260
- Bombthecat 7y ago
  I think it is a bubble. But we are pretty far away from popping imho...
- xmprt 7y ago
  The weird thing about websites like YouTube is they do a combination of topic matching and user matching. Why bother with tracking users so extensively if you're going to just go ahead and demonitize videos that are "sensitive" content. Just place the ads in front of the audience regardless of what they're watching. At the end of the day, advertisers and viewers can't possibly care what video it's showing on as long as they're getting the right target audience. The only people that do care are journalists looking to write a sensational hit piece to fan outrage culture. I hope your method succeeds because it would be a whole lot better than this crappy middle ground that we have right now.
  - pixl97 7y ago
    >Why bother with tracking users so extensively Because there is a good chance governments will pay for that data in the future.
itronitron 7y ago
Just as Google won the search engine wars by helping people find what they are looking for, the e-commerce winners will be the companies that help people find what they want to buy (reliably and with confidence). Retail companies are blind to just what a shit-show their websites are (a lot of them even have ads in their online store). Any company that solves this problem for their sector will win it, and this is good news for techies as every company can and should have a unique solution.
- dageshi 7y ago
  Amazon more or less won didn't it? It doesn't have total domination of ecommerce but frankly it'd run into anti-trust issues if it did. No company is going to do ecommerce bigger than amazon without getting broken up so yeah... amazon.
  - username90 7y ago
    Amazon won the US market, it hasn't won the world yet.
  - itronitron 7y ago
    Amazon is definitely the clear leader but both major brands and small companies could do better with a site focused to their own goods. In a lot of ways, most tech companies already do this but retail just hasn't caught on yet.
    - shantly 7y ago
      Discovery (if it's not on Amazon it doesn't exist, to many online shoppers—no, seriously) convenience (I already have an Amazon account) and confidence (yes Amazon is a shitty flea market at this point, but they're a shitty flea market with a known and fairly reliable return policy) matter a lot. Not sure how to solve those issues with a bunch of brand-specific sites.
  - magashna 7y ago
    Moving more and more away from Amazon. If I especially like a product or company, I'll see if it costs about the same to buy direct and do that. I've found that lots of companies actually have better deals on their site or offer a coupon.
davidedicillo 7y ago
Overstated. This article assumes that: - All online advertising is Google search - That brand search advertising is representative of the entire industry There are plenty of companies making double-digit ROAS (return over ad spend), especially direct response advertisers.
- neonate 7y ago
  Maybe overstated, but if "all" the article shows is that Google search ads don't work, that's a big deal.
- nabla9 7y ago
  How do you know it's not selection effect and the ROAS number are BS just like they are with Google? Have you tested? Google and Facebook are 60% of the market, so if it would be only them this is important.
- jessefrederik 7y ago
  Hi, I'm the author of the article, and I don't assume all online advertising is Google search. I also cite research on display advertising (meta-study of 432 display experiments on Google): https://www.ssrn.com/abstract=2701578 https://www.ssrn.com/abstract=2701578 And on Facebook advertising: https://www.kellogg.northwestern.edu/faculty/gordon_b/files/fb_comparison.pdf https://www.kellogg.northwestern.edu/faculty/gordon_b/files/... The problem with all online advertising is that there are huge selection effects, which are hard to correct for using conventional statistical methods. So you need to do experiments. And when economists do experiment, they find that advertising effects are so small that they are hard to measure.
  - glofish 7y ago
    Do you think that the situation is due to an arms race kind of scenario? -If everyone but one stopped advertising then the one still doing it would reap massive benefits? So advertising is a form of obstructing the competitor.
  - marrone12 7y ago
TekMol 7y ago
So 16 years ago it has been shown that advertising for your own brand name is worthless? Yet still in 2019, when I google for "Amazon" I see an Amazon ad? Color me skeptical. I doubt the marketing guys at the worlds biggest companies are that out of touch with reality. Would love to know why they do it though.
- hastes 7y ago
  Increased click-through I guess, and because they have unlimited money.
- tguedes 7y ago
  I think your answer is in your comment. Why would the digital marketing guys at Amazon say that their advertising doesn't work and their budget should be cut? They want a bigger budget with more responsibility, not less!
  - nitwit005 7y ago
    Unlike most companies, Amazon can easily track ad display or click to purchase. While they still can't establish causality (you might have bought it even without the ad), it's still fairly easy for them to calculate if the ads are worth it.
    - dontich 7y ago
      When you have Amazon's scale, you can easily do geo-controlled lift studies like the ones mentioned in the articles to get a pretty good estimate of the incremental ROAS.
- shantly 7y ago
  Otherwise Google will put an ad for some competitor, that many people will take for a search result, in that slot, right?
- deleted 7y ago
  [deleted]
- 7y ago
ACow_Adonis 7y ago
If you think about it, the very line that the smartest minds of our generation are working on making people click on things is itself marketing designed by marketers to sell the prestige/status of working for a big advertising company. That actually is genius in its own way... but just as the quants in finance during the early booms were "the smartest guys in the room, until they weren't and you realised they all were poor implementers of undergraduate statistics and jargon during economic bubble and crash", I don't think the workers for facebook/Google are necessarily that bright. It's depressing that our economic and social system is geared towards pushing maximum consumption, no argument there, but the smartest people on the planet already self selected out of that over the last 20 years, and what you're left with is... well... marketers and advertising dressed up as prestigious tech firms talking about how great they are.
- buboard 7y ago
  > smartest minds of our generation are working on making Considering the deterioration in software functionality that i m experiencing the past years across the board (from superheavy web apps to mobile apps that for no reason remove features to desktop apps that function worse than even mobile apps) - i m not even sure they re employing the " smartest minds of our generation"
  - username90 7y ago
    In my experience the smartest people don't want to work on UI's, which is probably the reason they are bad. The smartest go work on other parts of the stack, doing things like machine learning or infrastructure. The only place where you have the smartest people making UI's are in games, they often have very impressive performance and functionality. But even in games people hate making UI's, it is just that in games people care about the product so they bite the bullet and do it themselves. Note that I am not saying that UI is easy or unimportant, making UI's is both hard and super important which is why it is a huge problem that we can't find good people for it.
ta-49173 7y ago
I've had the impression that "online advertising" has been rife with fraud since its inception. Using cloud services to cheaply farm the clicks reported by the ads seems obvious. That we collectively turn a blind eye to it is the most disheartening part.
neonate 7y ago
https://web.archive.org/web/20191106191434/https://thecorrespondent.com/100/the-new-dot-com-bubble-is-here-its-called-online-advertising/13228924500-22d5fd24 https://web.archive.org/web/20191106191434/https://thecorres...
SaberTail 7y ago
From the article: > Marketers are often most successful at marketing their own marketing. I've seen this play out at places I've worked. After raising a funding round, marketing sold the leadership on letting them burn the lion's share of it, even though launching new marketing campaigns was never on the list of reasons we initially went out to raise money.
- bryanmgreen 7y ago
  I think that's a self-preservation tactic for many that often backfires. Most non-marketing management people want immediate and huge results... which are both hard to quantify and impossible to get without overspending or having an insanely lucky idea that goes viral. Naturally this leads to asking for a bigger budget and promising bigger results, then KPIs aren't met for X, Y, Z reasons, then they're forced to justify the spend, then they either get more budget or get fired and the cycle repeats. Marketing has too many intangibles, so marketers always feel a need to justify themselves out of fear of being an easy target.
  - Roritharr 7y ago
    What do marketing management people want?
    - bryanmgreen 7y ago
      I mean, immediate huge results are great if they happen. Really, they want what everyone else wants - ability to test ideas and executions before committing to a budget or unreasonable KPIs.
  - onlyrealcuzzo 7y ago
    I'd be nervous to work for a company where one of the co-founders isn't a marketer. Marketing is usually one of the biggest line items for a business. When your marketing team has little incentive to actually deliver, they're likely to ask for a ton of money only to add impressive things to their resumez, not really to deliver on their promises to the business. If a founder is in charge of marketing, s/he's got a lot of reasons to deliver: founder's equity.
LocalTrust 7y ago
> A former Facebook engineer once said (and he’s been quoted a thousand times over): "The best minds of my generation are thinking about how to make people click on ads." I spoke to some of those best minds: economists employed and formerly employed by the most powerful companies in Silicon Valley... Not to be a jerk, but almost none of the best minds in SV or of my generation are economists.
- tomrod 7y ago
  If you are a millennial or younger, I respectfully disagree. The "best minds" have been sought out to build out the new infrastructure in the service of the new railroad tycoons.
jameslk 7y ago
Sounds similar to this other bubble where we blindly pay software engineers to create and modify software but we don't know how much revenue those software features, refactors or bug fixes generate, if anything at all. /s
- thendrill 7y ago
  You are very correct. But what I always wonder. How long can this system perpetuate?
hannula 7y ago
> "What frustrates me is there’s a bit of magical thinking here," Johnson says. "As if Cambridge Analytica has hacked our brains so that we’re going to be like lemmings and jump off cliffs. As if we are powerless.” Probably not, but nevertheless their efforts to polarise thinking and support the formation of echo chambers have been quite successful. While selection effect has indeed been disregarded often, in the case of CA it actually amplified the outcome.
- buboard 7y ago
  its also very difficult to measure anything about political ads, so better keep the research to commercial ads for which data can be found
annoyingnoob 7y ago
I worked for an ad network for 6 years. The level of fraud in online advertising is staggering. It might work for some but a lot of it goes to waste, not even seen by humans.
cookie_monsta 7y ago
Tldr: Google is a kid handing out discount pizza coupons in the waiting area of a pizzeria
nabla9 7y ago
Is there similar studies about management consulting? It seems that most of it is just holding CEO's hand when they must flip a coin and having someone outside the company to blame. (they do it with PowerPoint)
deleted 7y ago
[deleted]
tacon 7y ago
This is a rather unimpressive article. Yes, brand advertising is a disaster, just like it has always been. But to say that all digital advertising has unknown ROI is ridiculous. Digital direct response advertising allows very accurate ROI calculations. (Admittedly, a lot of advertisers are not applying the tools to their advantage. They call that the "Google stupid tax". Ditto these days on Facebook.) And direct response advertising is nothing new. Mail order guys were cleaning up by running early (expensive!) experiments that showed if they were going to go out of business. Oddly enough, when you have skin in the game, you follow the money much more closely. Who knew? The fact that golf course brand advertising deals don't pay off is not news. They never have much. The bad news for digital direct response advertising is that the platforms are starting to remove the knobs that actually let people determine and optimize their ROI. Google is in the process of actively removing ad functionality and data that has, historically, been crucial to ad profitability. Google claims their machine learning can see much more of the data available, so "trust us." Perry Marshall, Google ads guru, has recently held several webinars about "Why Google is Objectively Evil."[0] Not pretty. [0] https://www.perrymarshall.com/60-second/gama-replay/ https://www.perrymarshall.com/60-second/gama-replay/
- jessefrederik 7y ago
  Hi this is the author of the article. You're just making the exact mistake this article is about: you assume people who click on your ad and then buy something, bought something BECAUSE of your ad. From the article: "Suppose Luigi’s Pizzeria hires three teenagers to hand out coupons to passersby. After a few weeks of flyering, one of the three turns out to be a marketing genius. Customers keep showing up with coupons distributed by this particular kid. The other two can’t make any sense of it: how does he do it? When they ask him, he explains: "I stand in the waiting area of the pizzeria." It’s plain to see that junior’s no marketing whiz. Pizzerias do not attract more customers by giving coupons to people already planning to order a quattro stagioni five minutes from now." It's the same in online marketing, you often target people who are searching for say a pair of shoes. People who are searching for shoes have way higher baseline probabilities of ending up buying a pair of Nikes, whether you show them a Nike ad or not. So if you do not correct for this 'selection bias', you have no idea what your ad did. The research I describe in the article clearly shows (and please look it up yourself, the links are all there) that selection bias is HUGE, and that it's hard to know ROI, because true advertising effects are tiny if you measure them in an experiment.
ativzzz 7y ago
I just want to say I love the little built in links/dropdowns within the article to expand information. Much more user friendly and smooth than using formal citations.
mrmrcoleman 7y ago
Measuring the effects of marketing started a bit earlier than Google: https://en.m.wikipedia.org/wiki/Scientific_Advertising https://en.m.wikipedia.org/wiki/Scientific_Advertising
chokma 7y ago
Coming from the other end (after someone clicked an ad), I got to say: ads work well. The metric used @work is: cost of sale. The merchant pays for each click on the ad that is redirected to his product page. What seems like a recipe for wasting incredible amounts of money on an army of click bots is working - because the merchant defines a target cost of sale for those clicks, meaning for example he expects a sale worth 100$ when spending 10$ on ads (a cost of sale of 10%). And the merchant will set a budget and won't repeat/continue a campaign beyond those costs, so it is in the ad publisher's best interest to deliver real paying customers instead of an army of bots. Cost of sale is of course different for each product category - clothes and perfume have huge margins (so the merchant may be willing to pay 30% of the final sale price for advertising costs), computer parts less so. In the case of ebay and amazon and other large retailers it's common to not pay per click but for a percentage of an order's total volume (x% of shopping basket's value once an order is placed). In that case, we have to trust the retailer to deliver correct sales data to us.
- tempestn 7y ago
  But doesn't this ignore the selection effect discussed in the article? IE to use your numbers say you get a $100 sale for every $10 spent on ads. And say your profit margin (outside of ads) on that sale is 20%, so you earn $20-$10 = $10 in profit. However, what if 3/4 of the people who clicked on your ads would have found you anyway, through organic search results or other means? Then that $10 spend only actually generated $5 in net income before ads, or a $5 loss after the cost of the ads. It's tough to say what that number is without doing some testing, but the point is that you can't simply treat all the business coming in via ads as attributable to the ad spend.
  - dontich 7y ago
    Almost all tech companies run lift studies / incrementality tests on all of the largest channels. For net new users, the incrementality is usually quite good. (for SEM-Brand and other high intent traffic, not so much... )
  - chokma 7y ago
    True, you could very well cannibalize your own advertising efforts. I think that may be a problem for brands who already advertise themselves. For example, I agree it makes no sense for Ebay to place an ad for the search term "ebay" if they are already the first search result. If you have a well known brand, you will have a lot of people who will search you out directly. In that case it's a matter of running campaigns and see what sticks - if you spend 10% of your budget on an agency's ad campaign, and very few new customers turn up, you may be wasting money. But if you have a small to medium online shop, I think it makes sense to have someone run ad campaigns for you on as many domains as possible - and pay only for high quality traffic. If you re-sell shoes from Nike, you will have a very hard time getting a click from someone who would have bought at your shop anyway, because your competitors will pay for Google PLA and other ad campaigns and anyone who is looking for a good offer will run into their ads.
lazyjones 7y ago
I wonder how much (in %) the 'Google tax' is these days, which is paid by businesses that advertise for their brand as keyword on Google despite being the top search result, just because Google sells the almost indistinguishable ad spot above the first result to their competitors.
- buboard 7y ago
  It shouldnt be too hard for websites to teach their users about this: "When searching for us on google, look for our domain name in the results".
buboard 7y ago
Great to see an article like this. This subject is almost suspiciously under-researched by journalists. There 's definitely something rotten in the promises that internet advertising has become somehow more effective. If that were true, wouldn't businesses notice? Wouldn't they spend a bigger part of their revenue on ads ? Wouldn't that return even bigger ROIs? Yet businesses spend roughly the same for over a century in ads, and it's not like the 2000s-2010s were the period of massive growth in consumer spending. We need more of this research, please, because advertising is a huge deal for the health of the internet, despite its vilification. And it doesn't begin and end with FB+Google Also: It would be nice if people who comment here and work for Google or FB declared their conflict of interest
- Iv 7y ago
  > because advertising is a huge deal for the health of the internet, despite its vilification [citation needed] I am of the opinion that internet would be a much saner place if advertisement was purely and simply banned.
  - layoutIfNeeded 7y ago
    I’m banning advertising via ublock origin and I can attest that the web indeed becomes a saner place without ads.
    - lucasverra 7y ago
      on ios im using a remove ads DNS thought VPN app. It is a nicer experience for sure
  - deleted 7y ago
    [deleted]
  - rhlsthrm 7y ago
    Then how would we be able to browse for free?
    - 7y ago
zenyc 7y ago
I’m skeptical about one of the main premises of the article: that brand keywords don’t have a positive ROI. Background: I took part in running millions of dollars of brand keywords for multiple companies. This is not what my business sells anymore. I’ll explain my counterargument in two different ways: with an analogy, and with data from a project that I was tasked with figuring out whether branding ads had an ROI. I'm looking for responses that can poke holes and help me have a better understanding. The analogy. Imagine you own a Chinese restaurant. John Doe is in the mood for Chinese chicken dumplings. John is hungry and in a rush so he gets in his car and starts heading to the local restaurant area because he heard about your restaurant. There are multiple ways to reach your restaurant (same as when you search a brand name in different ways + product A/B/C). No matter which route John takes when he is looking for your restaurant, he will have to go through one of the many roundabouts (the roundabout is the first page of the google search results). John reaches one of the roundabouts that’s right before your restaurant. There are 10 exits, some of them lead to your restaurant and some of the lead to other places. Since this is a roundabout, you don’t get to see each exit at once, but rather go one by one. Each exit has a sign that states the name of the place and a small description. The information on each sign was put up by the local authority (google), which is based on what the restaurant initial provided but it’s relatively the same across all roundabouts that lead to the restaurant. Since John is hungry and in a rush, he tends to take one of the very first exits he comes across (similar concept to the amount of traffic the 1st search result gets VS the 2nd Vs the 3d). The problem is that your restaurant is not the first exit for every roundabout (i.e the 1st result in google). For some roundabouts, the local concierge is the first exit (i.e a number of brands I worked with had the 2nd result for certain brand+product keywords as the 1st result was taken by major informational or review websites). For some roundabouts, the local authority agreed to add a new exit as the 1st one you come across that has a digital sign which changes based on what every "John" is looking for ("yummy chicken dumplings") and leads to the competition (paid search ad that always shows up before the organic results and the title/copy changes based on what someone is searching). For other roundabouts, your restaurant is 1st but John searched for your brand + "product by the wrong name", so the description of the first result doesn't reflect what John is searching for and he skips it (because Google doesn't let you dynamically change the organic title/description as you are allowed with the paid ads). The data. We stopped google SEM brand ads for 6 months, restarted them and let them run for a few months. We noticed that when we restarted the brand ads, the organic revenue decreased. The organic + brand ads revenue also fell by about 25% VS the time we didn't have brand ads running. The key question was: Did the number of people searching for the brand decrease during the same time? If branded ads are 100% cannibalizing the organic ROI, then the organic search impressions (i.e how many times the brand's links show up when someone searches the brand on google) and clicks should have remained the same. We looked at the top organic brand keywords that were responsible for 99% of the impressions/clicks the brand got on google. During the periods that we checked, organic impressions/clicks had fallen by about 40%. So the number of people searching for the brand fell by about 40% and yet the revenue from the organic search + brand ads only fell by about 25%. If you crunch in the numbers, you'd see that we had about a 20% increase in organic + brand ads revenue VS purely organic revenue. Last but note least... I don't have the links to the following research with me right now but it's available online: (1) competitors bidding for your brand terms can steal a double-digit percentage of your organic traffic if you don't bid as well, (2) consumers think brands are more legit the more they see their results all over the first page, (3) consumers put significant weight on the first result of the page, (4) the message brands use to get the user to take an action can have a double-digit percentage impact on whether the user will that action or not. Bonus: the high CTRs from the branded keywords help overall google ads account health/quality which helps you get cheaper ads from Google, better positions, etc.
lucd 7y ago
Just remove the ads and allow the supporters to reward creators anytime, with any amoun.. Like the Pepo app..
jariel 7y ago
The example given: Ebay spending $20M in ads for the word EBay is a very special case. People were clearly searching for EBay and click the first thing that comes up: ad or no ad. For a major well known brand, probably not a very good spend. There's a ton of 'dumb money' in advertising because strategic budgets of entities like banks and auto dealers are massive. But there's a ton of mid to smaller entities for whom the ads have to work or they go home. Ads are not fraudulent or fake - there's just a lot of grey in it, in addition to a lot of unsophisticated buyers with big budgets.
harry8 7y ago
I wonder how much under-the-radar advertising happens here. Good karma user: meaningful context to the thread "But now I just use $product" Immediate response: "Yeah $product is amazing - but here's something related and a different to the gist" The whole thing is an aside but it's in context and make sense in the flow. That kind of advertising is massively more effective than a google/facebrick ad.
- buboard 7y ago
  i notice that with a lot of comments about cloud-related services. While effective it's also limited to a few niches
josephjrobison 7y ago
A very easy way to break this argument is to not look at huge known companies like eBay and Amazon, but brand new companies 1-2 years old that have grown almost entirely by online ads. Eventually word of mouth kicks in, but there are plenty of smart operators that built their entire brand and revenue off of ads. Works best in online direct to consumer brands.
- onion2k 7y ago
  ...there are plenty of smart operators that built their entire brand and revenue off of ads. Can you name one? I find it very hard to believe there are any companies that have scaled up only using online adverts. Why would the founders of a business do that when they can grow in their local market by talking to people as well as buying online ads for wider reach?
  - jefftk 7y ago
    Here's one I worked on when I was at CogoLabs: https://venturefizz.com/deals/autotegrity-acquired-adp https://venturefizz.com/deals/autotegrity-acquired-adp
  - robryan 7y ago
    This wouldn't be too uncommon in branded ecommerce. If you are selling well known brands it is going to be very hard to get decent organic search rankings for them in the short term.
  - niknikson 7y ago
    Wayfair - you can listen to the NPR podcast "How I built this" where they talk about building their entire business around domain names and pay-per-click advertising (7 billion market cap).
  - josephjrobison 7y ago
    MVMT Watches, Boll & Branch, Casper, so many DTCs. Yes at some point word of mouth kicks in!
- kposehn 7y ago
QuantumGood 7y ago
Where companies have investment, they can afford to place ads that are unprofitable. Though LV (Lifetime Value) can make an unprofitable ad profitable eventually, I question any measure of "effectiveness" other than profitability. That said, by every measure that we make, Facebook ads for our local events have been profitable for us.
vmurthy 7y ago
Somewhere near the very bottom of the article is this gem. Emphasis mine. "And it wasn't because it was working for them. ... But there was one group of advertisers with a valid reason to purchase own brand name ads. Not that they were any more effective for this group, but because their competitors were "crowding them out" by buying ads that targeted the brand owner's name (so you search for "Bestbuy" but a sponsored ad for "Walmart" tops the list). This can enable Walmart to steal 20% of Bestbuy's organic search traffic" In other words, even if a lot of people figure out that digital advertising is worthless to increase sales or whatever, they might still buy it for defensive reasons .. It's a win for Google/FB either way
- buboard 7y ago
  this mostly works because google stopped marking their search ads with a different background color and made the search page entirely confusing so you don't know what s an organic search result anymore
- dehrmann 7y ago
  This is one of my gripes with Google and not being evil. Allowing competitors to outrank you for your brand if they pay and you don't is racketeering. Allowing this is so blatantly wrong I'm not sure why it doesn't get more attention.
rossdavidh 7y ago
So, there are a lot of reasons to think ads might not work, and a lot of reasons to think surely market forces would punish companies who spend $$ on ads that don't work. Which to believe? Well, reality check: do the ads you get shown, work? For me, almost never. It's either: 1) the thing I was google searching for anyway, or 2) the thing I bought online yesterday, which I therefore definitely don't want and won't want for a long time. This even happened with things like cars and house air conditioners, where someone who's recently made a purchase is the LEAST likely to want it. I can think of a lot of reasons for ad-supported companies (which includes news journalists) to want to claim that ads work better than they do. I can think of reasons why executives want to believe ads will save them, when they won't, because actually improving your product is much harder than spending VC money on ads.
m463 7y ago
Some advertising works on me, and might be self-selecting. The "thing x added to cart" on amazon, showing lots of similar things, and related things. At that point, I have capitulated on many occasions. It's like giving a coupon for a drink in the pizza waiting area. (Or in some cases, showing me there's a better pizza)
Razengan 7y ago
How many people here have purchased something solely because they saw an advertisement for it, or how many people do you know who have done that? I can't recall myself ever seeing an ad for something I did not already know of and then spending money on it. Whenever I have found something that I didn't already know and then purchased it, it has been because of word-of-mouth (including online comments), reviews or recommendations/features on digital stores like Steam, GOG, App Store etc.
- vangar3 7y ago
  Me neither. However HN is an echo chamber of intelligent people who aren't going to sway their opinion or purchases based on ads. It's harder for me to visualize but the majority of people out there pay attention to ads and even will convince them to purchase. When I go to the movies, people will laugh or agree at the most stupid ads. I don't think most people educate themselves or their children about not engaging in such content. It's why those morning shows that are really just ads in disguise are still airing today.
- Enginerrrd 7y ago
  I suppose it depends what you call an ad. I've definitely bought products based on 'independent' youtube reviewers who received free products to review. From a sidebar ad though? Of course not, and I never will. They do get accidental clicks from me sometimes though.
Gusen 7y ago
This is audio of the President, Donald J. Trump, demanding a $4 billion dollar bribe from child rapists to “take a blind eye” on January 3, 2019. Trump becomes one on January 14, 2019. Also, here is the big reason the major networks do not report any of it. //Download the video, turn the volume all the way up and put head phones on. Trump is on a call from with Henry Porter and Gigi Hadid. See page 63. Bribe demand at 10:18am: 3JanCh3_900-1100.avi https://drive.google.com/file/d/1Grdr8xF2psKNsuYlEnl9dIRV-77YG0Vr/view?usp=sharing https://drive.google.com/file/d/1Grdr8xF2psKNsuYlEnl9dIRV-77... //President of the United States, Donald J. Trump, rapes and kills his first boy at 6:32am. Video link below: 14JanCh3_600.avi https://drive.google.com/file/d/154QvA5hwyHGYIVXtod1ZbsOHFUJNbqZW/view?usp=sharing https://drive.google.com/file/d/154QvA5hwyHGYIVXtod1ZbsOHFUJ... 14JanCh2_600-700.avi https://drive.google.com/file/d/19UkqmnMwZiWy7xxWngltqwoKLTJL-IZ_/view?usp=sharing https://drive.google.com/file/d/19UkqmnMwZiWy7xxWngltqwoKLTJ... //On January 18, 2019 at 8:31am (see page 8) Trump acknowledges the four billion dollar bribe and says: "Let's get it done and get to fucking some kids." Video link below: 18JanCh3_725-.avi https://drive.google.com/file/d/1bVTcGq5Z9oOSAiOQcKYrmuK4TwoNmY1h/view?usp=sharing https://drive.google.com/file/d/1bVTcGq5Z9oOSAiOQcKYrmuK4Two... //A big reason this has not been reported by the major news networks is right here. Lester Holt of NBC Nightly News, apparently a member of the Illuminati since the 1980's, along with ABC Nightly News lead anchor David Muir, stop over to the Porter studio in Buffalo on January 14th, 2019 at 5:00am. They both rape and kill about two dozen boys by 6:00am. Muir starts around 5:15am, then Holt about 5:38am. Multi-billionaire Rupert Murdoch, owner of News Corp & Fox Corporation, takes his turn after Holt. Video links below: 14JanCh3_500-601.avi https://drive.google.com/file/d/1i7NKepeyG_FfdQRrM7KsnFOZOOX3o7UL/view?usp=sharing https://drive.google.com/file/d/1i7NKepeyG_FfdQRrM7KsnFOZOOX... 14JanCh2_530-600.avi https://drive.google.com/file/d/1NZzgN5ilI7ToroU5cfqMaL4o2u1RwidV/view?usp=sharing https://drive.google.com/file/d/1NZzgN5ilI7ToroU5cfqMaL4o2u1... //This is the tip of the iceberg. //Full 88 page PDF [updated 5Nov]: FBI_FinalDraft_26Jul2019_BSchlenker.pdf https://drive.google.com/file/d/1Sj9EN_pHmicKS6rFQlmk67knMdJc9cGk/view?usp=sharing https://drive.google.com/file/d/1Sj9EN_pHmicKS6rFQlmk67knMdJ... //This post will be censored when this account logs off, the posts are "shadow banned". They try to make it look like the post is live, but it is not. Here is an example. https://drive.google.com/file/d/1zxS8JESoIg7uxRkUgdptMsF6SuJedYKz/view?usp=sharing https://drive.google.com/file/d/1zxS8JESoIg7uxRkUgdptMsF6SuJ...
jessaustin 7y ago
I kept waiting for the other shoe to drop on the #fitgirl/yoga pants anecdote. It seems plausible that such a targeted campaign could be more effective than the standard "dump a bunch of money in this set of adwords" crap. At least one executive was really certain about it. The way this section is written, it seems like we're making sport of that guy without actually knowing that he is wrong.
rosstex 7y ago
There was a bus company that started service from Princeton to Philadelphia. They advertised via Facebook. I saw the ad, and I bought a ticket. Sometimes it works.
ariyadi 7y ago
saya pakai penalaran orang awam saja, saya mau ke mana dan siapa yang bisa mengantar ke sana.
mokarma 7y ago
One thing I don't understand, is why advertisers won't give me a way to tell them that I've already bought a car, so I don't need to see car ads anymore.
countryqt30 7y ago
"The experiment continued for another eight weeks. What was the effect of pulling the ads? Almost none. For every dollar eBay spent on search advertising, they lost roughly 63 cents , according to Tadelis’s calculations." - that issue isn't related to a problem with digital advertising, but to horrible financial management
countryqt30 7y ago
How successful companies do ads: ONLY invest in the ad if you have at least 3X ROI to cut out all the "bullshit tiny 1% improvement" ideas, and you don't run into any problems the article mentions. eBay ran into millions of problems, because they focussed on "how could we improve sales by 0.0001%" and is the ROI of this ad 0.001% or 0.002%?
AkshatM 7y ago
I'm still dubious about the implication that digital advertisement is fundamentally broken. My issue is that the article doesn't demonstrate selection effects dominating over advertising effects for companies with no major brand identity. The examples cited to back the case - eBay (which is huge), "large" retailers in the case of Facebook ads, "major U.S. retailers and brokerages with millions of customers" per Lewis and Rao 2015 - are all established companies that have already received substantial presence. Where are the experiments that demonstrate selection effects dominating over advertising effects for companies with no pre-existing brand identity e.g. The Correspondent (sorry, I couldn't resist :P)? Second issue: the article demonstrates convincingly that brand-keyword ads are broken, which is great. But at the same time brand-keyword ads are not (to my knowledge as a former engineer at an SEO company, so it could be imperfect) the primary kind of keyword ads. A brand-keyword ad is when someone types in "eBay" and you get paid eBay links - but the majority of keyword ads (again, this is from memory) are targeted keyword ads e.g. someone types in "fur coat" and Macy pays Google to put a link to its "fur coats" pages. Equally interesting, multiple companies can pay for the same targeted keywords, meaning you can have multiple links pointing off to different sites on the same page. The pizzeria analogy explains why brand-keyword ads make no sense monetarily (someone searching for your brand specifically will find you anyway), but it falls apart for the targeted keyword space, where people are searching by items but not by brand. Given that much of SEO and digital marketing are target-based rather than brand-based, I'm not sold yet on the ineffectiveness of digital advertising overall.
undercover89 7y ago
The "experiment" you mentioned here is observational. The reality is, major digital ad platforms today (google, facebook, etc.) all provide rigorous RCT experiments. That will reveal the true effectiveness of ads.

500 points by anielsen 7y ago

mars 7y ago

I disagree with the author. Although all points outlined in the article might be independently true, making a general rule out of it is not ok. Especially modern, agile marketing teams that understand the importance of testing and learning are able to produce campaigns that generate positive ROI/ROAS. Sidenote: Co-founder of Admetrics here. We provide an experimentation solution that enables businesses to run marketing experiments on their data at pace, so we see a lot of test results on a day to day basis.

zecg 7y ago

Anecdotally, a bubble sounds right, since I know I never see an ad anywhere. Firefox + ublock on both computer and mobile, never even consider a smartphone app if it has ads. So how can it be effective?

tempodox 7y ago

Has anyone ever been fired for buying digital ads? Also, there are enough examples that show that the toxicity or ineffectiveness of a technology becomes immaterial once a sufficient number of jobs (and other vested interests) depend on it.

mikeiz404 7y ago

Moral of the story: If you’re not testing the null hypothesis when measuring ROI on ads you might not be measuring what you think

mlang23 7y ago

What I notice is that internet advertisment is pretty selective, I dont know about effective... If your interests happen to diverge from mainstream just that bit enough, you can end up in a pretty much ad-free zone. I happen to watch a lot of conference recordings on YouTube, and most conferences dont monetize their channel (yet). But thats not the end of the story. Stay away from mainstream, and you get complete ad-free shows. Take Joe Rogan for instance. The people he hosts are largely pretty interesting, but the way he does controversial topics pretty much led YouTube to demonetize him. Which, for the consumer, is a blessing. Because you get 3h talkshows without a single bit of advertisment. Or ARTE, which is a german/french coop television provider. They have very interesting content, but a policy of not enoying with ads. Which makes their YouTube channel even more worthwhile subscribing to. I could go on, the pattern seems to be the same. To be honest, the more cheesy a program is, the more likely it is that you will be flooded with ads.

d0mine 7y ago
> stay away from mainstream Joe Rogan's podcast has millions of subscribers and multiple ads per episode (not counting ads on various cuts/highlights from the episode) — are there more mainstream podcasts on youtube?
- mlang23 7y ago
  Interesting, I dont see this. I used to watch JRE on youtube with my iPhone, and now consume the same channel via an Apple TV 3. I never got a single ad. I know that he is doing his own ads at the beginning of the show, but only in the podcast version. The YT JRE shows are completely ad-free for me.
elkos 7y ago
> I could go on, the pattern seems to be the same. I think a lot of people would be interested on similar examples
pjc50 7y ago
So, how is Rogan funded? And what is he advertising? His Patreon? Product placement? Ideological placement?
- k_bx 7y ago
  Only a portion of his shows gets demonetized, far from all
- alvah 7y ago
  There are over 5 minutes of ads at the start of every Joe Rogan podcast, as well as others throughout. One analyst suggests Rogan has acheived a net worth over $1bn based on the number of downloads & estimated advertising revenue based on those figures: http://www.insideradio.com/podcastnewsdaily/joe-rogan-podcast-billionaire-and-poster-boy-for-subscription-podcasts/article_05317272-cffc-11e9-be43-2f6532b4be9c.html http://www.insideradio.com/podcastnewsdaily/joe-rogan-podcas...
  - 7y ago

rhys91 7y ago

The biggest ruse is Facebook convincing marketeers and agencies alike that three seconds counts as a video view. They justify this by saying people don't want to watch videos are attention deficit. The truth is that very few people want to watch an ad. But if there's a strong enough value exchange with the consumer, they will. Just make effective content that's emotive, funny or offers utility. Creatively, the impact of this is clients wanting ALL the messaging in the first three seconds of video content, which often causes the consumer to skip the rest of the content anyway.

The_Corres 7y ago

This article was published by The Correspondent, a new media startup funded by members – if you'd like to read more by the journalists you can become a member (pay-what-you-like)https://thecorrespondent.com/ https://thecorrespondent.com/ | or follow us on Twitter --> @The_Corres, @jessefrederik, @mauritsmartijn

vivekd 7y ago

I do not work for google facebook or any other internet company. I do however purchase online ads for my law firm. I also tried turning off the ads for a few weeks to disastrous results. I can say the big problem in the examples in this article is the keyword selection. For example ebay advertising the word ebay to customers who are googling the word ebay is probably fruitless for the most part. Those people were already looking for ebay and would find it with or without the ad. However if you are a lesser known online auction and you use the keyword "internet auction" or something similar, it would probably help. This article, to me, seems to be more about the importance of experimenting and critically evaluating the data rather than an actual indictment on online marketing. With online marketing there is no clear answer: what keyword you bid on, how you target, how you write your ad copies, how your competitors are behaving all come into play. It's difficult for anyone to parse through those factor and really come out definitively as to whether online marketing is effective or ineffective in general. We can only do the smaller measurements and see if our particular ads are effective for our particular business, which in the end is all any of us who buy ads really care about.

wyxuan 7y ago

I can’t read the article but I think it’s starting to deflate on its own. Like when J.P. Morgan stopped advertising on google after the whole controversy of ads being shown in front of extremist content and realized it didn’t make a difference.

the_mar 7y ago
you can, just click "maybe later" at the bottom where it says "become a member"
- godson_drafty 7y ago
  I did that, and then afterwords it told me that the article was being gifted to me buy a paying member. After that I just closed the tab. It is kind of a stroke of genius, encouraging me to sign up by showing me that I'm enjoying the largesse of a paying customer. On the other hand, if letting me read the article is such a huge imposition, I guess I don't want it.
  - tkoolen 7y ago
    The paying member is the first author.
  - the_mar 7y ago
    im not here to engage in the debate about how much we hate online subscriptions. I'm just commenting on garbage UI trying to trick you to subscribe and pay for an article that isn't really paywalled

moltensodium 7y ago

Maybe this is just a generational thing, but I still have never clicked on an ad. I hate ads. I don't know anyone who likes them. I don't know anyone who has intentionally clicked on them. I have literally never met anyone who places any value in advertising at all. Everyone hates it with 100% of their being. It is the garbage we all just sort of accept exposure to as some sort of fee for existing online. Who are all these people that subverted technology and turned it into advertising-tech?

Ididntdothis 7y ago
I never click on ads either but when I see an ad often enough (even if I don’t pay attention) my mind gives that product more credibility.
- didericis 7y ago
  That effect seems highly relative to the context in which you see an ad, and I wouldn’t be at all surprised if it was intentionally exaggerated when studied. Certain contexts increase credibility with certain people, others decrease credibility. What it does do is actually put the product in front of your face. People won’t buy your thing if they’ve never seen or heard of it. So I agree there’s value to ads even if people don’t click on them in that moment. That doesn’t mean their value isn’t inflated.
riffraff 7y ago
I keep ublock on all the time except on some sites. Sometimes, there is a worthy ad (e.g. one month free audible, cause I visited the site). I don't resent ads, I am totally fine with them, and if they help sustain some site I use, I am happy. The problem is when they are taking over the whole experience.
jasode 7y ago
>I have literally never met anyone who places any value in advertising at all. Everyone hates it with 100% of their being. I like ads -- but only if they're relevant to my interests. There lies the problem: 99% of all ads are not relevant to my interests. For online ads, 99.99% of ads are not relevant to me. So, I use a DNS blocker to filter out ads.

ghaff 7y ago

It's seemed pretty obvious for a good decade that, if a bubble were going to pop, it would probably be related to advertising. Because if online advertising falls off a cliff, that hits two of the big tech employers directly. And you can be sure there would be major secondary effects on all the companies whose plan is to more or less never make money but be acquired.

deleted 7y ago
[deleted]

loeg 7y ago

"New"? Pinboard-guy Maciej Cegłowski has been harping on this for years now: https://idlewords.com/2015/11/the_advertising_bubble.htm https://idlewords.com/2015/11/the_advertising_bubble.htm

leoedin 7y ago

I've always wondered about those adverts for the website I'm searching for. If I type its name into Google, I'm already 100% committed to going there. Sometimes I click the advert (it generally depends how much I like the company). The other aspect of online ads that strikes me as ingenious but probably not sustainable is the way Google inflates the auction system with fake money. Anyone who's run a website will have received a letter offering hundreds of dollars of free advertising with Google. Of course, it's an auction so the presence of that money just drives up the cost for everyone. Google wins every time!

cubedrone 7y ago
There was a post about this recently. They need to buy the ad to keep their competitor from being the first result. https://www.seroundtable.com/basecamp-google-ad-28161.html https://www.seroundtable.com/basecamp-google-ad-28161.html
- pizzaparty2 7y ago
  Well, at least there is no law allowing ISPs to serve their site more slowly unless they pay a ransom (I mean business professional tier).
Disruptive_Dave 7y ago
It's a defense strategy. And it's necessary.
- harry8 7y ago
  "Nice organic customer flow you've got there. It'd be a shame if it all went away because you didn't pay us." --Google
  - buboard 7y ago
    "It's not our fault that our ads look entirely identical to our search results"
7y ago

ngngngng 7y ago

> a Super Bowl ad cost three million dollars. Why? Because that’s how much it cost. What does it yield? Who knows. This article is awesome. In my free time I'm building an advertising platform that topic matches ads off the content of the web pages. No tracking of users. I'm hoping to allow people to host and run their own all inclusive self contained advertising platform for just a licensing fee. I also have a way to beat adblockers that I'm afraid of bringing to light since I only want it tied to my own companies completely non tracking and ethical ads. Hope it's not a bubble! Though first I have to finish the work and get a few customers so it's not like I can't pivot if it is.

temp9187324980 7y ago
> I also have a way to beat adblockers You'll never beat uBlock origin. https://news.ycombinator.com/item?id=21036260 https://news.ycombinator.com/item?id=21036260
Bombthecat 7y ago
I think it is a bubble. But we are pretty far away from popping imho...
xmprt 7y ago
The weird thing about websites like YouTube is they do a combination of topic matching and user matching. Why bother with tracking users so extensively if you're going to just go ahead and demonitize videos that are "sensitive" content. Just place the ads in front of the audience regardless of what they're watching. At the end of the day, advertisers and viewers can't possibly care what video it's showing on as long as they're getting the right target audience. The only people that do care are journalists looking to write a sensational hit piece to fan outrage culture. I hope your method succeeds because it would be a whole lot better than this crappy middle ground that we have right now.
- pixl97 7y ago
  >Why bother with tracking users so extensively Because there is a good chance governments will pay for that data in the future.

itronitron 7y ago

Just as Google won the search engine wars by helping people find what they are looking for, the e-commerce winners will be the companies that help people find what they want to buy (reliably and with confidence). Retail companies are blind to just what a shit-show their websites are (a lot of them even have ads in their online store). Any company that solves this problem for their sector will win it, and this is good news for techies as every company can and should have a unique solution.

dageshi 7y ago
Amazon more or less won didn't it? It doesn't have total domination of ecommerce but frankly it'd run into anti-trust issues if it did. No company is going to do ecommerce bigger than amazon without getting broken up so yeah... amazon.
- username90 7y ago
  Amazon won the US market, it hasn't won the world yet.
- itronitron 7y ago
  Amazon is definitely the clear leader but both major brands and small companies could do better with a site focused to their own goods. In a lot of ways, most tech companies already do this but retail just hasn't caught on yet.
  - shantly 7y ago
    Discovery (if it's not on Amazon it doesn't exist, to many online shoppers—no, seriously) convenience (I already have an Amazon account) and confidence (yes Amazon is a shitty flea market at this point, but they're a shitty flea market with a known and fairly reliable return policy) matter a lot. Not sure how to solve those issues with a bunch of brand-specific sites.
- magashna 7y ago
  Moving more and more away from Amazon. If I especially like a product or company, I'll see if it costs about the same to buy direct and do that. I've found that lots of companies actually have better deals on their site or offer a coupon.

davidedicillo 7y ago

Overstated. This article assumes that: - All online advertising is Google search - That brand search advertising is representative of the entire industry There are plenty of companies making double-digit ROAS (return over ad spend), especially direct response advertisers.

neonate 7y ago
Maybe overstated, but if "all" the article shows is that Google search ads don't work, that's a big deal.
nabla9 7y ago
How do you know it's not selection effect and the ROAS number are BS just like they are with Google? Have you tested? Google and Facebook are 60% of the market, so if it would be only them this is important.
jessefrederik 7y ago
Hi, I'm the author of the article, and I don't assume all online advertising is Google search. I also cite research on display advertising (meta-study of 432 display experiments on Google): https://www.ssrn.com/abstract=2701578 https://www.ssrn.com/abstract=2701578 And on Facebook advertising: https://www.kellogg.northwestern.edu/faculty/gordon_b/files/fb_comparison.pdf https://www.kellogg.northwestern.edu/faculty/gordon_b/files/... The problem with all online advertising is that there are huge selection effects, which are hard to correct for using conventional statistical methods. So you need to do experiments. And when economists do experiment, they find that advertising effects are so small that they are hard to measure.
- glofish 7y ago
  Do you think that the situation is due to an arms race kind of scenario? -If everyone but one stopped advertising then the one still doing it would reap massive benefits? So advertising is a form of obstructing the competitor.
- marrone12 7y ago

TekMol 7y ago

So 16 years ago it has been shown that advertising for your own brand name is worthless? Yet still in 2019, when I google for "Amazon" I see an Amazon ad? Color me skeptical. I doubt the marketing guys at the worlds biggest companies are that out of touch with reality. Would love to know why they do it though.

hastes 7y ago
Increased click-through I guess, and because they have unlimited money.
tguedes 7y ago
I think your answer is in your comment. Why would the digital marketing guys at Amazon say that their advertising doesn't work and their budget should be cut? They want a bigger budget with more responsibility, not less!
- nitwit005 7y ago
  Unlike most companies, Amazon can easily track ad display or click to purchase. While they still can't establish causality (you might have bought it even without the ad), it's still fairly easy for them to calculate if the ads are worth it.
  - dontich 7y ago
    When you have Amazon's scale, you can easily do geo-controlled lift studies like the ones mentioned in the articles to get a pretty good estimate of the incremental ROAS.
shantly 7y ago
Otherwise Google will put an ad for some competitor, that many people will take for a search result, in that slot, right?
deleted 7y ago
[deleted]
7y ago

ACow_Adonis 7y ago

If you think about it, the very line that the smartest minds of our generation are working on making people click on things is itself marketing designed by marketers to sell the prestige/status of working for a big advertising company. That actually is genius in its own way... but just as the quants in finance during the early booms were "the smartest guys in the room, until they weren't and you realised they all were poor implementers of undergraduate statistics and jargon during economic bubble and crash", I don't think the workers for facebook/Google are necessarily that bright. It's depressing that our economic and social system is geared towards pushing maximum consumption, no argument there, but the smartest people on the planet already self selected out of that over the last 20 years, and what you're left with is... well... marketers and advertising dressed up as prestigious tech firms talking about how great they are.

buboard 7y ago
> smartest minds of our generation are working on making Considering the deterioration in software functionality that i m experiencing the past years across the board (from superheavy web apps to mobile apps that for no reason remove features to desktop apps that function worse than even mobile apps) - i m not even sure they re employing the " smartest minds of our generation"
- username90 7y ago
  In my experience the smartest people don't want to work on UI's, which is probably the reason they are bad. The smartest go work on other parts of the stack, doing things like machine learning or infrastructure. The only place where you have the smartest people making UI's are in games, they often have very impressive performance and functionality. But even in games people hate making UI's, it is just that in games people care about the product so they bite the bullet and do it themselves. Note that I am not saying that UI is easy or unimportant, making UI's is both hard and super important which is why it is a huge problem that we can't find good people for it.

ta-49173 7y ago

I've had the impression that "online advertising" has been rife with fraud since its inception. Using cloud services to cheaply farm the clicks reported by the ads seems obvious. That we collectively turn a blind eye to it is the most disheartening part.

neonate 7y ago

https://web.archive.org/web/20191106191434/https://thecorrespondent.com/100/the-new-dot-com-bubble-is-here-its-called-online-advertising/13228924500-22d5fd24 https://web.archive.org/web/20191106191434/https://thecorres...

SaberTail 7y ago

From the article: > Marketers are often most successful at marketing their own marketing. I've seen this play out at places I've worked. After raising a funding round, marketing sold the leadership on letting them burn the lion's share of it, even though launching new marketing campaigns was never on the list of reasons we initially went out to raise money.

bryanmgreen 7y ago
I think that's a self-preservation tactic for many that often backfires. Most non-marketing management people want immediate and huge results... which are both hard to quantify and impossible to get without overspending or having an insanely lucky idea that goes viral. Naturally this leads to asking for a bigger budget and promising bigger results, then KPIs aren't met for X, Y, Z reasons, then they're forced to justify the spend, then they either get more budget or get fired and the cycle repeats. Marketing has too many intangibles, so marketers always feel a need to justify themselves out of fear of being an easy target.
- Roritharr 7y ago
  What do marketing management people want?
  - bryanmgreen 7y ago
    I mean, immediate huge results are great if they happen. Really, they want what everyone else wants - ability to test ideas and executions before committing to a budget or unreasonable KPIs.
- onlyrealcuzzo 7y ago
  I'd be nervous to work for a company where one of the co-founders isn't a marketer. Marketing is usually one of the biggest line items for a business. When your marketing team has little incentive to actually deliver, they're likely to ask for a ton of money only to add impressive things to their resumez, not really to deliver on their promises to the business. If a founder is in charge of marketing, s/he's got a lot of reasons to deliver: founder's equity.

LocalTrust 7y ago

> A former Facebook engineer once said (and he’s been quoted a thousand times over): "The best minds of my generation are thinking about how to make people click on ads." I spoke to some of those best minds: economists employed and formerly employed by the most powerful companies in Silicon Valley... Not to be a jerk, but almost none of the best minds in SV or of my generation are economists.

tomrod 7y ago
If you are a millennial or younger, I respectfully disagree. The "best minds" have been sought out to build out the new infrastructure in the service of the new railroad tycoons.

jameslk 7y ago

Sounds similar to this other bubble where we blindly pay software engineers to create and modify software but we don't know how much revenue those software features, refactors or bug fixes generate, if anything at all. /s

thendrill 7y ago
You are very correct. But what I always wonder. How long can this system perpetuate?

hannula 7y ago

> "What frustrates me is there’s a bit of magical thinking here," Johnson says. "As if Cambridge Analytica has hacked our brains so that we’re going to be like lemmings and jump off cliffs. As if we are powerless.” Probably not, but nevertheless their efforts to polarise thinking and support the formation of echo chambers have been quite successful. While selection effect has indeed been disregarded often, in the case of CA it actually amplified the outcome.

buboard 7y ago
its also very difficult to measure anything about political ads, so better keep the research to commercial ads for which data can be found

annoyingnoob 7y ago

I worked for an ad network for 6 years. The level of fraud in online advertising is staggering. It might work for some but a lot of it goes to waste, not even seen by humans.

cookie_monsta 7y ago

Tldr: Google is a kid handing out discount pizza coupons in the waiting area of a pizzeria

nabla9 7y ago

Is there similar studies about management consulting? It seems that most of it is just holding CEO's hand when they must flip a coin and having someone outside the company to blame. (they do it with PowerPoint)

deleted 7y ago

[deleted]

tacon 7y ago

This is a rather unimpressive article. Yes, brand advertising is a disaster, just like it has always been. But to say that all digital advertising has unknown ROI is ridiculous. Digital direct response advertising allows very accurate ROI calculations. (Admittedly, a lot of advertisers are not applying the tools to their advantage. They call that the "Google stupid tax". Ditto these days on Facebook.) And direct response advertising is nothing new. Mail order guys were cleaning up by running early (expensive!) experiments that showed if they were going to go out of business. Oddly enough, when you have skin in the game, you follow the money much more closely. Who knew? The fact that golf course brand advertising deals don't pay off is not news. They never have much. The bad news for digital direct response advertising is that the platforms are starting to remove the knobs that actually let people determine and optimize their ROI. Google is in the process of actively removing ad functionality and data that has, historically, been crucial to ad profitability. Google claims their machine learning can see much more of the data available, so "trust us." Perry Marshall, Google ads guru, has recently held several webinars about "Why Google is Objectively Evil."[0] Not pretty. [0] https://www.perrymarshall.com/60-second/gama-replay/ https://www.perrymarshall.com/60-second/gama-replay/

jessefrederik 7y ago
Hi this is the author of the article. You're just making the exact mistake this article is about: you assume people who click on your ad and then buy something, bought something BECAUSE of your ad. From the article: "Suppose Luigi’s Pizzeria hires three teenagers to hand out coupons to passersby. After a few weeks of flyering, one of the three turns out to be a marketing genius. Customers keep showing up with coupons distributed by this particular kid. The other two can’t make any sense of it: how does he do it? When they ask him, he explains: "I stand in the waiting area of the pizzeria." It’s plain to see that junior’s no marketing whiz. Pizzerias do not attract more customers by giving coupons to people already planning to order a quattro stagioni five minutes from now." It's the same in online marketing, you often target people who are searching for say a pair of shoes. People who are searching for shoes have way higher baseline probabilities of ending up buying a pair of Nikes, whether you show them a Nike ad or not. So if you do not correct for this 'selection bias', you have no idea what your ad did. The research I describe in the article clearly shows (and please look it up yourself, the links are all there) that selection bias is HUGE, and that it's hard to know ROI, because true advertising effects are tiny if you measure them in an experiment.

ativzzz 7y ago

I just want to say I love the little built in links/dropdowns within the article to expand information. Much more user friendly and smooth than using formal citations.

mrmrcoleman 7y ago

Measuring the effects of marketing started a bit earlier than Google: https://en.m.wikipedia.org/wiki/Scientific_Advertising https://en.m.wikipedia.org/wiki/Scientific_Advertising

chokma 7y ago

Coming from the other end (after someone clicked an ad), I got to say: ads work well. The metric used @work is: cost of sale. The merchant pays for each click on the ad that is redirected to his product page. What seems like a recipe for wasting incredible amounts of money on an army of click bots is working - because the merchant defines a target cost of sale for those clicks, meaning for example he expects a sale worth 100$ when spending 10$ on ads (a cost of sale of 10%). And the merchant will set a budget and won't repeat/continue a campaign beyond those costs, so it is in the ad publisher's best interest to deliver real paying customers instead of an army of bots. Cost of sale is of course different for each product category - clothes and perfume have huge margins (so the merchant may be willing to pay 30% of the final sale price for advertising costs), computer parts less so. In the case of ebay and amazon and other large retailers it's common to not pay per click but for a percentage of an order's total volume (x% of shopping basket's value once an order is placed). In that case, we have to trust the retailer to deliver correct sales data to us.

tempestn 7y ago
But doesn't this ignore the selection effect discussed in the article? IE to use your numbers say you get a $100 sale for every $10 spent on ads. And say your profit margin (outside of ads) on that sale is 20%, so you earn $20-$10 = $10 in profit. However, what if 3/4 of the people who clicked on your ads would have found you anyway, through organic search results or other means? Then that $10 spend only actually generated $5 in net income before ads, or a $5 loss after the cost of the ads. It's tough to say what that number is without doing some testing, but the point is that you can't simply treat all the business coming in via ads as attributable to the ad spend.
- dontich 7y ago
  Almost all tech companies run lift studies / incrementality tests on all of the largest channels. For net new users, the incrementality is usually quite good. (for SEM-Brand and other high intent traffic, not so much... )
- chokma 7y ago
  True, you could very well cannibalize your own advertising efforts. I think that may be a problem for brands who already advertise themselves. For example, I agree it makes no sense for Ebay to place an ad for the search term "ebay" if they are already the first search result. If you have a well known brand, you will have a lot of people who will search you out directly. In that case it's a matter of running campaigns and see what sticks - if you spend 10% of your budget on an agency's ad campaign, and very few new customers turn up, you may be wasting money. But if you have a small to medium online shop, I think it makes sense to have someone run ad campaigns for you on as many domains as possible - and pay only for high quality traffic. If you re-sell shoes from Nike, you will have a very hard time getting a click from someone who would have bought at your shop anyway, because your competitors will pay for Google PLA and other ad campaigns and anyone who is looking for a good offer will run into their ads.

lazyjones 7y ago

I wonder how much (in %) the 'Google tax' is these days, which is paid by businesses that advertise for their brand as keyword on Google despite being the top search result, just because Google sells the almost indistinguishable ad spot above the first result to their competitors.

buboard 7y ago
It shouldnt be too hard for websites to teach their users about this: "When searching for us on google, look for our domain name in the results".

buboard 7y ago

Great to see an article like this. This subject is almost suspiciously under-researched by journalists. There 's definitely something rotten in the promises that internet advertising has become somehow more effective. If that were true, wouldn't businesses notice? Wouldn't they spend a bigger part of their revenue on ads ? Wouldn't that return even bigger ROIs? Yet businesses spend roughly the same for over a century in ads, and it's not like the 2000s-2010s were the period of massive growth in consumer spending. We need more of this research, please, because advertising is a huge deal for the health of the internet, despite its vilification. And it doesn't begin and end with FB+Google Also: It would be nice if people who comment here and work for Google or FB declared their conflict of interest

Iv 7y ago
> because advertising is a huge deal for the health of the internet, despite its vilification [citation needed] I am of the opinion that internet would be a much saner place if advertisement was purely and simply banned.
- layoutIfNeeded 7y ago
  I’m banning advertising via ublock origin and I can attest that the web indeed becomes a saner place without ads.
  - lucasverra 7y ago
    on ios im using a remove ads DNS thought VPN app. It is a nicer experience for sure
- deleted 7y ago
  [deleted]
- rhlsthrm 7y ago
  Then how would we be able to browse for free?
  - 7y ago

zenyc 7y ago

I’m skeptical about one of the main premises of the article: that brand keywords don’t have a positive ROI. Background: I took part in running millions of dollars of brand keywords for multiple companies. This is not what my business sells anymore. I’ll explain my counterargument in two different ways: with an analogy, and with data from a project that I was tasked with figuring out whether branding ads had an ROI. I'm looking for responses that can poke holes and help me have a better understanding. The analogy. Imagine you own a Chinese restaurant. John Doe is in the mood for Chinese chicken dumplings. John is hungry and in a rush so he gets in his car and starts heading to the local restaurant area because he heard about your restaurant. There are multiple ways to reach your restaurant (same as when you search a brand name in different ways + product A/B/C). No matter which route John takes when he is looking for your restaurant, he will have to go through one of the many roundabouts (the roundabout is the first page of the google search results). John reaches one of the roundabouts that’s right before your restaurant. There are 10 exits, some of them lead to your restaurant and some of the lead to other places. Since this is a roundabout, you don’t get to see each exit at once, but rather go one by one. Each exit has a sign that states the name of the place and a small description. The information on each sign was put up by the local authority (google), which is based on what the restaurant initial provided but it’s relatively the same across all roundabouts that lead to the restaurant. Since John is hungry and in a rush, he tends to take one of the very first exits he comes across (similar concept to the amount of traffic the 1st search result gets VS the 2nd Vs the 3d). The problem is that your restaurant is not the first exit for every roundabout (i.e the 1st result in google). For some roundabouts, the local concierge is the first exit (i.e a number of brands I worked with had the 2nd result for certain brand+product keywords as the 1st result was taken by major informational or review websites). For some roundabouts, the local authority agreed to add a new exit as the 1st one you come across that has a digital sign which changes based on what every "John" is looking for ("yummy chicken dumplings") and leads to the competition (paid search ad that always shows up before the organic results and the title/copy changes based on what someone is searching). For other roundabouts, your restaurant is 1st but John searched for your brand + "product by the wrong name", so the description of the first result doesn't reflect what John is searching for and he skips it (because Google doesn't let you dynamically change the organic title/description as you are allowed with the paid ads). The data. We stopped google SEM brand ads for 6 months, restarted them and let them run for a few months. We noticed that when we restarted the brand ads, the organic revenue decreased. The organic + brand ads revenue also fell by about 25% VS the time we didn't have brand ads running. The key question was: Did the number of people searching for the brand decrease during the same time? If branded ads are 100% cannibalizing the organic ROI, then the organic search impressions (i.e how many times the brand's links show up when someone searches the brand on google) and clicks should have remained the same. We looked at the top organic brand keywords that were responsible for 99% of the impressions/clicks the brand got on google. During the periods that we checked, organic impressions/clicks had fallen by about 40%. So the number of people searching for the brand fell by about 40% and yet the revenue from the organic search + brand ads only fell by about 25%. If you crunch in the numbers, you'd see that we had about a 20% increase in organic + brand ads revenue VS purely organic revenue. Last but note least... I don't have the links to the following research with me right now but it's available online: (1) competitors bidding for your brand terms can steal a double-digit percentage of your organic traffic if you don't bid as well, (2) consumers think brands are more legit the more they see their results all over the first page, (3) consumers put significant weight on the first result of the page, (4) the message brands use to get the user to take an action can have a double-digit percentage impact on whether the user will that action or not. Bonus: the high CTRs from the branded keywords help overall google ads account health/quality which helps you get cheaper ads from Google, better positions, etc.

lucd 7y ago

Just remove the ads and allow the supporters to reward creators anytime, with any amoun.. Like the Pepo app..

jariel 7y ago

The example given: Ebay spending $20M in ads for the word EBay is a very special case. People were clearly searching for EBay and click the first thing that comes up: ad or no ad. For a major well known brand, probably not a very good spend. There's a ton of 'dumb money' in advertising because strategic budgets of entities like banks and auto dealers are massive. But there's a ton of mid to smaller entities for whom the ads have to work or they go home. Ads are not fraudulent or fake - there's just a lot of grey in it, in addition to a lot of unsophisticated buyers with big budgets.

harry8 7y ago

I wonder how much under-the-radar advertising happens here. Good karma user: meaningful context to the thread "But now I just use $product" Immediate response: "Yeah $product is amazing - but here's something related and a different to the gist" The whole thing is an aside but it's in context and make sense in the flow. That kind of advertising is massively more effective than a google/facebrick ad.

buboard 7y ago
i notice that with a lot of comments about cloud-related services. While effective it's also limited to a few niches

josephjrobison 7y ago

A very easy way to break this argument is to not look at huge known companies like eBay and Amazon, but brand new companies 1-2 years old that have grown almost entirely by online ads. Eventually word of mouth kicks in, but there are plenty of smart operators that built their entire brand and revenue off of ads. Works best in online direct to consumer brands.

onion2k 7y ago
...there are plenty of smart operators that built their entire brand and revenue off of ads. Can you name one? I find it very hard to believe there are any companies that have scaled up only using online adverts. Why would the founders of a business do that when they can grow in their local market by talking to people as well as buying online ads for wider reach?
- jefftk 7y ago
  Here's one I worked on when I was at CogoLabs: https://venturefizz.com/deals/autotegrity-acquired-adp https://venturefizz.com/deals/autotegrity-acquired-adp
- robryan 7y ago
  This wouldn't be too uncommon in branded ecommerce. If you are selling well known brands it is going to be very hard to get decent organic search rankings for them in the short term.
- niknikson 7y ago
  Wayfair - you can listen to the NPR podcast "How I built this" where they talk about building their entire business around domain names and pay-per-click advertising (7 billion market cap).
- josephjrobison 7y ago
  MVMT Watches, Boll & Branch, Casper, so many DTCs. Yes at some point word of mouth kicks in!
kposehn 7y ago

QuantumGood 7y ago

Where companies have investment, they can afford to place ads that are unprofitable. Though LV (Lifetime Value) can make an unprofitable ad profitable eventually, I question any measure of "effectiveness" other than profitability. That said, by every measure that we make, Facebook ads for our local events have been profitable for us.

vmurthy 7y ago

Somewhere near the very bottom of the article is this gem. Emphasis mine. "And it wasn't because it was working for them. ... But there was one group of advertisers with a valid reason to purchase own brand name ads. Not that they were any more effective for this group, but because their competitors were "crowding them out" by buying ads that targeted the brand owner's name (so you search for "Bestbuy" but a sponsored ad for "Walmart" tops the list). This can enable Walmart to steal 20% of Bestbuy's organic search traffic" In other words, even if a lot of people figure out that digital advertising is worthless to increase sales or whatever, they might still buy it for defensive reasons .. It's a win for Google/FB either way

buboard 7y ago
this mostly works because google stopped marking their search ads with a different background color and made the search page entirely confusing so you don't know what s an organic search result anymore
dehrmann 7y ago
This is one of my gripes with Google and not being evil. Allowing competitors to outrank you for your brand if they pay and you don't is racketeering. Allowing this is so blatantly wrong I'm not sure why it doesn't get more attention.

rossdavidh 7y ago

So, there are a lot of reasons to think ads might not work, and a lot of reasons to think surely market forces would punish companies who spend $$ on ads that don't work. Which to believe? Well, reality check: do the ads you get shown, work? For me, almost never. It's either: 1) the thing I was google searching for anyway, or 2) the thing I bought online yesterday, which I therefore definitely don't want and won't want for a long time. This even happened with things like cars and house air conditioners, where someone who's recently made a purchase is the LEAST likely to want it. I can think of a lot of reasons for ad-supported companies (which includes news journalists) to want to claim that ads work better than they do. I can think of reasons why executives want to believe ads will save them, when they won't, because actually improving your product is much harder than spending VC money on ads.

m463 7y ago

Some advertising works on me, and might be self-selecting. The "thing x added to cart" on amazon, showing lots of similar things, and related things. At that point, I have capitulated on many occasions. It's like giving a coupon for a drink in the pizza waiting area. (Or in some cases, showing me there's a better pizza)

Razengan 7y ago

How many people here have purchased something solely because they saw an advertisement for it, or how many people do you know who have done that? I can't recall myself ever seeing an ad for something I did not already know of and then spending money on it. Whenever I have found something that I didn't already know and then purchased it, it has been because of word-of-mouth (including online comments), reviews or recommendations/features on digital stores like Steam, GOG, App Store etc.

vangar3 7y ago
Me neither. However HN is an echo chamber of intelligent people who aren't going to sway their opinion or purchases based on ads. It's harder for me to visualize but the majority of people out there pay attention to ads and even will convince them to purchase. When I go to the movies, people will laugh or agree at the most stupid ads. I don't think most people educate themselves or their children about not engaging in such content. It's why those morning shows that are really just ads in disguise are still airing today.
Enginerrrd 7y ago
I suppose it depends what you call an ad. I've definitely bought products based on 'independent' youtube reviewers who received free products to review. From a sidebar ad though? Of course not, and I never will. They do get accidental clicks from me sometimes though.

Gusen 7y ago

This is audio of the President, Donald J. Trump, demanding a $4 billion dollar bribe from child rapists to “take a blind eye” on January 3, 2019. Trump becomes one on January 14, 2019. Also, here is the big reason the major networks do not report any of it. //Download the video, turn the volume all the way up and put head phones on. Trump is on a call from with Henry Porter and Gigi Hadid. See page 63. Bribe demand at 10:18am: 3JanCh3_900-1100.avi https://drive.google.com/file/d/1Grdr8xF2psKNsuYlEnl9dIRV-77YG0Vr/view?usp=sharing https://drive.google.com/file/d/1Grdr8xF2psKNsuYlEnl9dIRV-77... //President of the United States, Donald J. Trump, rapes and kills his first boy at 6:32am. Video link below: 14JanCh3_600.avi https://drive.google.com/file/d/154QvA5hwyHGYIVXtod1ZbsOHFUJNbqZW/view?usp=sharing https://drive.google.com/file/d/154QvA5hwyHGYIVXtod1ZbsOHFUJ... 14JanCh2_600-700.avi https://drive.google.com/file/d/19UkqmnMwZiWy7xxWngltqwoKLTJL-IZ_/view?usp=sharing https://drive.google.com/file/d/19UkqmnMwZiWy7xxWngltqwoKLTJ... //On January 18, 2019 at 8:31am (see page 8) Trump acknowledges the four billion dollar bribe and says: "Let's get it done and get to fucking some kids." Video link below: 18JanCh3_725-.avi https://drive.google.com/file/d/1bVTcGq5Z9oOSAiOQcKYrmuK4TwoNmY1h/view?usp=sharing https://drive.google.com/file/d/1bVTcGq5Z9oOSAiOQcKYrmuK4Two... //A big reason this has not been reported by the major news networks is right here. Lester Holt of NBC Nightly News, apparently a member of the Illuminati since the 1980's, along with ABC Nightly News lead anchor David Muir, stop over to the Porter studio in Buffalo on January 14th, 2019 at 5:00am. They both rape and kill about two dozen boys by 6:00am. Muir starts around 5:15am, then Holt about 5:38am. Multi-billionaire Rupert Murdoch, owner of News Corp & Fox Corporation, takes his turn after Holt. Video links below: 14JanCh3_500-601.avi https://drive.google.com/file/d/1i7NKepeyG_FfdQRrM7KsnFOZOOX3o7UL/view?usp=sharing https://drive.google.com/file/d/1i7NKepeyG_FfdQRrM7KsnFOZOOX... 14JanCh2_530-600.avi https://drive.google.com/file/d/1NZzgN5ilI7ToroU5cfqMaL4o2u1RwidV/view?usp=sharing https://drive.google.com/file/d/1NZzgN5ilI7ToroU5cfqMaL4o2u1... //This is the tip of the iceberg. //Full 88 page PDF [updated 5Nov]: FBI_FinalDraft_26Jul2019_BSchlenker.pdf https://drive.google.com/file/d/1Sj9EN_pHmicKS6rFQlmk67knMdJc9cGk/view?usp=sharing https://drive.google.com/file/d/1Sj9EN_pHmicKS6rFQlmk67knMdJ... //This post will be censored when this account logs off, the posts are "shadow banned". They try to make it look like the post is live, but it is not. Here is an example. https://drive.google.com/file/d/1zxS8JESoIg7uxRkUgdptMsF6SuJedYKz/view?usp=sharing https://drive.google.com/file/d/1zxS8JESoIg7uxRkUgdptMsF6SuJ...

jessaustin 7y ago

I kept waiting for the other shoe to drop on the #fitgirl/yoga pants anecdote. It seems plausible that such a targeted campaign could be more effective than the standard "dump a bunch of money in this set of adwords" crap. At least one executive was really certain about it. The way this section is written, it seems like we're making sport of that guy without actually knowing that he is wrong.

rosstex 7y ago

There was a bus company that started service from Princeton to Philadelphia. They advertised via Facebook. I saw the ad, and I bought a ticket. Sometimes it works.

ariyadi 7y ago

saya pakai penalaran orang awam saja, saya mau ke mana dan siapa yang bisa mengantar ke sana.

mokarma 7y ago

One thing I don't understand, is why advertisers won't give me a way to tell them that I've already bought a car, so I don't need to see car ads anymore.

countryqt30 7y ago

"The experiment continued for another eight weeks. What was the effect of pulling the ads? Almost none. For every dollar eBay spent on search advertising, they lost roughly 63 cents , according to Tadelis’s calculations." - that issue isn't related to a problem with digital advertising, but to horrible financial management

countryqt30 7y ago

How successful companies do ads: ONLY invest in the ad if you have at least 3X ROI to cut out all the "bullshit tiny 1% improvement" ideas, and you don't run into any problems the article mentions. eBay ran into millions of problems, because they focussed on "how could we improve sales by 0.0001%" and is the ROI of this ad 0.001% or 0.002%?

AkshatM 7y ago

I'm still dubious about the implication that digital advertisement is fundamentally broken. My issue is that the article doesn't demonstrate selection effects dominating over advertising effects for companies with no major brand identity. The examples cited to back the case - eBay (which is huge), "large" retailers in the case of Facebook ads, "major U.S. retailers and brokerages with millions of customers" per Lewis and Rao 2015 - are all established companies that have already received substantial presence. Where are the experiments that demonstrate selection effects dominating over advertising effects for companies with no pre-existing brand identity e.g. The Correspondent (sorry, I couldn't resist :P)? Second issue: the article demonstrates convincingly that brand-keyword ads are broken, which is great. But at the same time brand-keyword ads are not (to my knowledge as a former engineer at an SEO company, so it could be imperfect) the primary kind of keyword ads. A brand-keyword ad is when someone types in "eBay" and you get paid eBay links - but the majority of keyword ads (again, this is from memory) are targeted keyword ads e.g. someone types in "fur coat" and Macy pays Google to put a link to its "fur coats" pages. Equally interesting, multiple companies can pay for the same targeted keywords, meaning you can have multiple links pointing off to different sites on the same page. The pizzeria analogy explains why brand-keyword ads make no sense monetarily (someone searching for your brand specifically will find you anyway), but it falls apart for the targeted keyword space, where people are searching by items but not by brand. Given that much of SEO and digital marketing are target-based rather than brand-based, I'm not sold yet on the ineffectiveness of digital advertising overall.

undercover89 7y ago

The "experiment" you mentioned here is observational. The reality is, major digital ad platforms today (google, facebook, etc.) all provide rigorous RCT experiments. That will reveal the true effectiveness of ads.