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The problem is that the outcome of some campaigns doesn't reflect in dollars, and still you have a winning campaign. In fact, probably the most expensive campa

The problem is that the outcome of some campaigns doesn't reflect in dollars, and still you have a winning campaign. In fact, probably the most expensive campaigns are used to consolidate market shares, brand positioning and notoriety. People just seem to forget that advertising existed before the internet, and it worked without the bloat of metrics.

jlbnjmn 6y ago
> The problem is that the outcome of some campaigns doesn't reflect in dollars, and still you have a winning campaign. All winning campaigns reflect in dollars. The question is when. That's why it's imperative to separate markets entirely. Radio ads for a "branding/awareness" strategy. Search ads for a direct response strategy. The majority of people viewing/hearing one should never hear/view the other. If it takes 6 months to properly test a branding campaign, decide ahead of time whether your organization has the patience to wait. If not, just stick with direct response. Also, Scientific Advertising was written in 1923.
- libertine 6y ago
  What I mean is that on today's standards for some SMEs, you either have a lead/sales generation campaign, or nothing. There's no space for brand positioning campaigns, or brand awareness, or anything that it's not tracked into a direct sale/lead. Like you said, branding takes time, with huge investments - and usually it's almost a leap of faith because of the sheer amount of budget and pressure it requires, namely in terms of GRPs. That's why testing used to be done in focus groups, and other forms of market research, to support a brand strategy. Maybe branding is a "luxury" SMEs can't afford, but the thing they don't get is: it's a long term investment.
  - jlbnjmn 6y ago
    Ah, I see what you're saying. Yes, you're exactly right. Brand advertising has a much higher ROAS when done well. The challenge is doing it well, and knowing if you did. My experience has been that SMEs rarely have the appreciation for art necessary to do branding well, and without strong branding, brand campaigns are a waste of money. And it's not just a lack money. They'd rather spend the money on ads than on people. In some industries, that's a better strategy, but for most they would benefit greatly from recognizing that all customers, both B2B and B2C, are in fact humans. Founders have an advantage here, because they can operate on a longer time scale. (Side note, GM spent $3140000000 on ads in 2018.)
    - time0ut 6y ago
      Imagine having an ad budget of pi billion dollars...
      - jlbnjmn 6y ago
        I would launch a new $10,000,000 engineering bounty every Monday and a $30,000,000 race event every weekend. The engineering bounties would be for open source hardware, software, and tooling challenges, with a heavy focus on optimizing robots and social computer vision problems. The races each weekend would alternate between full size trucks in a strong man style competition, manned quadcopters doing search and rescue challenges, and autonomous cars in an urban race series. I would spend the remaining $10,000,000 from the week's budget on vocational scholarships and micro-loans for low income single parents. If anyone from GM is reading this, let's talk.
        llsf 6y ago
        It might be pretty close to what Tesla is doing with its own marketing budget... beside, not open sourcing it or doing weekend races (although Nurburgring and other drag tests could count).
        junius2020 6y ago
        still a better policy than what the fed is doing
linuxftw 6y ago
Before the internet, there wasn't an endless fleet of robots subscribing to the local newspaper. Metrics did exist, though more rudimentary. X subscribers, X viewers, etc.
bigtechdataeng 6y ago
How do you define “worked”, though? Was each advertising dollar the most effective way for that company to spend that dollar? Or was it just ROI positive? Most people consider the latter, because it’s hard to accept that the spend needs to compete with every other way of spending that money, not with other ad media.
- cortesoft 6y ago
  Opportunity cost strikes again
  - jlbnjmn 6y ago
    The opportunity cost of calculating opportunity cost is often higher than the underlying opportunity cost. Analysis paralysis.
- jbay808 6y ago
  Is the total amount being spent on online advertising more than the total amount that was being spent on advertising in general, in say the 90s? If so, what does it mean for all of those dollars to be more effective? Does that mean that today's average net user is now subscribing to three different car insurance plans, because of how effectively they've been advertised to?
- jlbnjmn 6y ago
  Analysis paralysis is real. For the majority of businesses, the opportunity cost of properly testing all available options is higher than any potential gains. It's like asking a developer if their code really "worked", even though they didn't write it and run tests in every popular and obscure programming language. Should more thought be given to alternative ad options? Probably. Does that mean that the ads didn't work? No. Outside of the VC backed world, people play with real money and the market decided what works and what doesn't. Unfortunately, VC money distorts the market for everyone.
- libertine 6y ago
  "Worked" depends on the goal. Effectiveness of each dollar depends on the goal. The questions you pose, though completely valid - and should be asked - are done in different levels. If you set a marketing budget, it's because there was a decision to achieve some goal that is bound to marketing. The same goes for R&D, Acquisitions, Human Resources, etc. That's why, in a classical corporate sense, at the beginning of the fiscal year, each department fights for a cut of the big budget to be invested. Within a marketing budget you then have to split it again, and again, and by this time you should be at the advertising level. Within this level you have Advertising (the creative part, copy and art) & Media Buying. Etc. But getting back to your question: being ROI positive can be quite deceiving, because you can have negative ROI yet get positive long term results. Example: You, as a manager, decided that Amazon is a viable channel for sales and distribution. You evaluate the competition and you realize that for you to have some relevance on organic results, you need to improve your ranking through Amazon PPC and external traffic. You factor in Price Promotion, to present a competitive offer and to help your product being established. You run that campaign at loss (negative ROI), for 2 months, but you manage to get yourself to the Top 10 listings for organic results. Question - assuming it's a healthy market: is this a bad campaign? (The obvious answer is: it depends. But assuming the short term, ROI negative, campaign can set you up to generate more sales in the future, it's a good campaign. Then arguably you could present other solutions, at lower cost, to produce the same outcomes.)

jlbnjmn 6y ago

> The problem is that the outcome of some campaigns doesn't reflect in dollars, and still you have a winning campaign. All winning campaigns reflect in dollars. The question is when. That's why it's imperative to separate markets entirely. Radio ads for a "branding/awareness" strategy. Search ads for a direct response strategy. The majority of people viewing/hearing one should never hear/view the other. If it takes 6 months to properly test a branding campaign, decide ahead of time whether your organization has the patience to wait. If not, just stick with direct response. Also, Scientific Advertising was written in 1923.

libertine 6y ago
What I mean is that on today's standards for some SMEs, you either have a lead/sales generation campaign, or nothing. There's no space for brand positioning campaigns, or brand awareness, or anything that it's not tracked into a direct sale/lead. Like you said, branding takes time, with huge investments - and usually it's almost a leap of faith because of the sheer amount of budget and pressure it requires, namely in terms of GRPs. That's why testing used to be done in focus groups, and other forms of market research, to support a brand strategy. Maybe branding is a "luxury" SMEs can't afford, but the thing they don't get is: it's a long term investment.
- jlbnjmn 6y ago
  Ah, I see what you're saying. Yes, you're exactly right. Brand advertising has a much higher ROAS when done well. The challenge is doing it well, and knowing if you did. My experience has been that SMEs rarely have the appreciation for art necessary to do branding well, and without strong branding, brand campaigns are a waste of money. And it's not just a lack money. They'd rather spend the money on ads than on people. In some industries, that's a better strategy, but for most they would benefit greatly from recognizing that all customers, both B2B and B2C, are in fact humans. Founders have an advantage here, because they can operate on a longer time scale. (Side note, GM spent $3140000000 on ads in 2018.)
  - time0ut 6y ago
    Imagine having an ad budget of pi billion dollars...
    - jlbnjmn 6y ago
      I would launch a new $10,000,000 engineering bounty every Monday and a $30,000,000 race event every weekend. The engineering bounties would be for open source hardware, software, and tooling challenges, with a heavy focus on optimizing robots and social computer vision problems. The races each weekend would alternate between full size trucks in a strong man style competition, manned quadcopters doing search and rescue challenges, and autonomous cars in an urban race series. I would spend the remaining $10,000,000 from the week's budget on vocational scholarships and micro-loans for low income single parents. If anyone from GM is reading this, let's talk.
      - llsf 6y ago
        It might be pretty close to what Tesla is doing with its own marketing budget... beside, not open sourcing it or doing weekend races (although Nurburgring and other drag tests could count).
      - junius2020 6y ago
        still a better policy than what the fed is doing

linuxftw 6y ago

Before the internet, there wasn't an endless fleet of robots subscribing to the local newspaper. Metrics did exist, though more rudimentary. X subscribers, X viewers, etc.

bigtechdataeng 6y ago

How do you define “worked”, though? Was each advertising dollar the most effective way for that company to spend that dollar? Or was it just ROI positive? Most people consider the latter, because it’s hard to accept that the spend needs to compete with every other way of spending that money, not with other ad media.

cortesoft 6y ago
Opportunity cost strikes again
- jlbnjmn 6y ago
  The opportunity cost of calculating opportunity cost is often higher than the underlying opportunity cost. Analysis paralysis.
jbay808 6y ago
Is the total amount being spent on online advertising more than the total amount that was being spent on advertising in general, in say the 90s? If so, what does it mean for all of those dollars to be more effective? Does that mean that today's average net user is now subscribing to three different car insurance plans, because of how effectively they've been advertised to?
jlbnjmn 6y ago
Analysis paralysis is real. For the majority of businesses, the opportunity cost of properly testing all available options is higher than any potential gains. It's like asking a developer if their code really "worked", even though they didn't write it and run tests in every popular and obscure programming language. Should more thought be given to alternative ad options? Probably. Does that mean that the ads didn't work? No. Outside of the VC backed world, people play with real money and the market decided what works and what doesn't. Unfortunately, VC money distorts the market for everyone.
libertine 6y ago
"Worked" depends on the goal. Effectiveness of each dollar depends on the goal. The questions you pose, though completely valid - and should be asked - are done in different levels. If you set a marketing budget, it's because there was a decision to achieve some goal that is bound to marketing. The same goes for R&D, Acquisitions, Human Resources, etc. That's why, in a classical corporate sense, at the beginning of the fiscal year, each department fights for a cut of the big budget to be invested. Within a marketing budget you then have to split it again, and again, and by this time you should be at the advertising level. Within this level you have Advertising (the creative part, copy and art) & Media Buying. Etc. But getting back to your question: being ROI positive can be quite deceiving, because you can have negative ROI yet get positive long term results. Example: You, as a manager, decided that Amazon is a viable channel for sales and distribution. You evaluate the competition and you realize that for you to have some relevance on organic results, you need to improve your ranking through Amazon PPC and external traffic. You factor in Price Promotion, to present a competitive offer and to help your product being established. You run that campaign at loss (negative ROI), for 2 months, but you manage to get yourself to the Top 10 listings for organic results. Question - assuming it's a healthy market: is this a bad campaign? (The obvious answer is: it depends. But assuming the short term, ROI negative, campaign can set you up to generate more sales in the future, it's a good campaign. Then arguably you could present other solutions, at lower cost, to produce the same outcomes.)