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I agree that advertising as a whole might be a bubble. In fact, my next piece is about TV advertising which is arguably worse. See: https://papers.ssrn.com/sol3

I agree that advertising as a whole might be a bubble. In fact, my next piece is about TV advertising which is arguably worse. See: https://papers.ssrn.com/sol3/papers.cfm?abstract_id=3273476 https://papers.ssrn.com/sol3/papers.cfm?abstract_id=3273476 I do think it's more accepted in traditional advertising that we just don't know how well it works. In digital advertising there is a grand illusion of measurement.

nopriorarrests 7y ago
Hey Jesse, I spent 6 years working in ad-tech, and I was researching the incrementality effect of ads, selection bias and stuff like that for last 3 years. I want to let you know that your article is good. Online advertising is not a bubble, but your article perfectly explains why it is much harder than it seems.
- jessefrederik 7y ago
  Thanks a lot! :-)
- DataWorker 7y ago
  The thing about bubbles is that nobody knows they exist. So an insider such as yourself saying, “there is no bubble,” is actually strong evidence of said bubble. Necessary but not sufficient.
  - perl4ever 7y ago
    No, it's perfectly reasonable that everyone knows there is a bubble, but nobody knows when it will pop. "Irrational exuberance" is a famous quote about the 90s stock market/internet bubble, and it was in 1996, when the party was just getting started.
  - nl 7y ago
    This isn't really the case. Bubbles usually have plenty of people claiming they are bubbles, and people on the inside privately acknowledging it. In online advertising there are few people on the inside who think that non-brand advertising is a bubble. It just works too well, in too many places, and too many people are making money using it. It's reliable and effective, and those just aren't attributes associated with bubbles. Yeah, attributing everything to the last-click isn't the best measurement in the world. But as pointed out elsewhere there are techniques to avoid it. And there are enough direct-to-consumer brands which launch on Instagram and do nothing else to be able to see how effective it is.
sosborn 7y ago
Online ad metrics tell people “what” happened, but people expect it to tell them “why.”
bjornjaja 7y ago
Not sure this has much significance, but as a consumer I usually skip online ads or tune them out mentally as they are so pervasive it’s a nuisance. T.V ads work on me to an extent if I were watching live T.V. but I try again to avoid them like the plague. Some news sites make ads agreeable if it meshes well with the content (like NY Times and such). The bottom line I think is that there’s too much competition for my attention and it gets exhausting unless the ads are really well thought out (original ideas) or subtle—in which case the probability of me seeing the ad is less, but the effectiveness most likely increases as its less like an ad and more like relevant content
Spooky23 7y ago
I disagree. Most of the people I grew up with today know that it’s Miller time, that sometimes you feel like a nut, sometimes you don’t, or that coke is the real thing. They learned that from TV. Online ads? They don’t trigger anything for me. They either need to deliver information contextually, deliver preferred placement for something I’m already looking for, or be deceptive.
- JohnFen 7y ago
  > I grew up with today know that it’s Miller time, that sometimes you feel like a nut, sometimes you don’t, or that coke is the real thing. True. I acknowledge here that anecdote is not a synonym for data, but I will offer that despite those phrases having been seared into my brain for most of my life, I don't actually drink Miller, eat Almond Joy or Mounds, or drink Coke.
  - asdff 7y ago
    If you were the kind of person who drank light beer, candy, and soda, I bet that jingle would spark something. Ad quality these days has gone down for sure. Everything is formulaic and established and safe, yet nearly every major ad over the course of advertisement history was major because it was the opposite of these. I guess quantity has gone up to compensate.
    - JohnFen 7y ago
      I'm not big on beer or soda, but I do have a candy habit!

nopriorarrests 7y ago

Hey Jesse, I spent 6 years working in ad-tech, and I was researching the incrementality effect of ads, selection bias and stuff like that for last 3 years. I want to let you know that your article is good. Online advertising is not a bubble, but your article perfectly explains why it is much harder than it seems.

jessefrederik 7y ago
Thanks a lot! :-)
DataWorker 7y ago
The thing about bubbles is that nobody knows they exist. So an insider such as yourself saying, “there is no bubble,” is actually strong evidence of said bubble. Necessary but not sufficient.
- perl4ever 7y ago
  No, it's perfectly reasonable that everyone knows there is a bubble, but nobody knows when it will pop. "Irrational exuberance" is a famous quote about the 90s stock market/internet bubble, and it was in 1996, when the party was just getting started.
- nl 7y ago
  This isn't really the case. Bubbles usually have plenty of people claiming they are bubbles, and people on the inside privately acknowledging it. In online advertising there are few people on the inside who think that non-brand advertising is a bubble. It just works too well, in too many places, and too many people are making money using it. It's reliable and effective, and those just aren't attributes associated with bubbles. Yeah, attributing everything to the last-click isn't the best measurement in the world. But as pointed out elsewhere there are techniques to avoid it. And there are enough direct-to-consumer brands which launch on Instagram and do nothing else to be able to see how effective it is.

sosborn 7y ago

Online ad metrics tell people “what” happened, but people expect it to tell them “why.”

bjornjaja 7y ago

Not sure this has much significance, but as a consumer I usually skip online ads or tune them out mentally as they are so pervasive it’s a nuisance. T.V ads work on me to an extent if I were watching live T.V. but I try again to avoid them like the plague. Some news sites make ads agreeable if it meshes well with the content (like NY Times and such). The bottom line I think is that there’s too much competition for my attention and it gets exhausting unless the ads are really well thought out (original ideas) or subtle—in which case the probability of me seeing the ad is less, but the effectiveness most likely increases as its less like an ad and more like relevant content

Spooky23 7y ago

I disagree. Most of the people I grew up with today know that it’s Miller time, that sometimes you feel like a nut, sometimes you don’t, or that coke is the real thing. They learned that from TV. Online ads? They don’t trigger anything for me. They either need to deliver information contextually, deliver preferred placement for something I’m already looking for, or be deceptive.

JohnFen 7y ago
> I grew up with today know that it’s Miller time, that sometimes you feel like a nut, sometimes you don’t, or that coke is the real thing. True. I acknowledge here that anecdote is not a synonym for data, but I will offer that despite those phrases having been seared into my brain for most of my life, I don't actually drink Miller, eat Almond Joy or Mounds, or drink Coke.
- asdff 7y ago
  If you were the kind of person who drank light beer, candy, and soda, I bet that jingle would spark something. Ad quality these days has gone down for sure. Everything is formulaic and established and safe, yet nearly every major ad over the course of advertisement history was major because it was the opposite of these. I guess quantity has gone up to compensate.
  - JohnFen 7y ago
    I'm not big on beer or soda, but I do have a candy habit!