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My interpretation of what's going on: CEOs finally have leverage against their marketing departments to do black-out testing on social media ad spend. It's dif
by shoguning 6y ago
My interpretation of what's going on:
CEOs finally have leverage against their marketing departments to do black-out testing on social media ad spend. It's difficult to actually measure impact of ad spending, and marketing teams spin results to their advantage.
They will observe what happens and re-introduce spending where it actually works.
- pphysch 6y agoI doubt this very much. Doing black-out testing silently would be just as easy and allow a much greater degree of experimental control.
- ramraj07 6y agoWell if it fails, and revenue drops, that would be hard to explain to shareholders right? Especially if the test has to extend for months to be realistic. Now they can at least say it's for a social cause.
- pphysch 6y agoJust blame it on the 'rona or geopolitics.
- shoguning 6y agoMaybe? Part of the leverage is going public and saying it's about some principle. For experimental control, executives tend to think simple is better. The more complex, the more room for fudging.
- wand3r 6y agoAlso, it is being done during one of the craziest markets and climate ever to occur so it would be difficult to really get good numbers.
- fourstar 6y agoBad take. These companies are using FB as a scapegoat to reduce ad operations during this pandemic/company budget reductions.
- shoguning 6y agoSeems synergistic with what I said, no? Reduce budget and do some testing at the same time.
- product50 6y agoYou honestly have no idea how advertising works. So keep your interpretation to yourself. Social media advertising works. You don't build a $70B empire if there is no ROI. Please stop being so ignorant and take time to understand why performance advertisers and small businesses adore Facebook.
- dang 6y agoYikes, personal attacks will get you banned here. Please make your substantive points without any of that. If you know more than others, don't attack them—share some of what you know. Even if they don't learn from it, the rest of us will, and then you'll have made a positive contribution instead of a destructive one. https://news.ycombinator.com/newsguidelines.html https://news.ycombinator.com/newsguidelines.html Edit: we've had to warn you many times over the years, and it looks like you've continued to break the rules (e.g. https://news.ycombinator.com/item?id=23298011 https://news.ycombinator.com/item?id=23298011, which I would certainly have replied to if I'd seen it). Would you mind reviewing https://news.ycombinator.com/newsguidelines.html https://news.ycombinator.com/newsguidelines.html and taking the spirit of this site more to heart? It's really not ok to attack others like this on HN.
- product50 6y agoYou are right. It is becoming too difficult for me to control myself when I read something written by someone being ignorant. Maybe, I should do a better job letting it go vs. attacking. I have been working on it - but I do hope that you are noticing that the frequency of my tirades are going down.
- dang 6y agoI trust that that's true and appreciate it. All we can do is each work on this.
- Aperocky 6y agoWhen a recession happen the first to go is marketing. As a test, you would need to control other variables, the present economic uncertainty basically rendered that impossible. It's just the CEOs finding a convenient excuse to cut costs.
- adrianb 6y agoIt's an even better deal: companies are replacing paid advertising with free exposure from being mentioned in news stories and bonus points for "standing up for what's right". In addition, plenty of people (and the news organisations themselves) share these news stories on the very same social media, with 0 costs for the companies involved. Overall it means increased brand exposure for less money.
- will_pseudonym 6y agoGood ol' public relations.
- jjohansson 6y ago> When a recession happen the first to go is marketing. As a marketer, I have found the opposite to be true for some industries. For example, during 2007/2008 my digital marketing agency saw a big surge in business from companies who saw marketing as a way to grow lagging demand.
- sheeshkebab 6y agoEverything “non-core” usually gets cut... it depends I guess whether someone views marketing “core” or not.
- Aperocky 6y agoI guess it also had to do with cost effectiveness. Digital marketing might have been small but cheaper than paper/cable medias. Right now given the size of Google and Facebook (and the fact that their whole revenue is basically ads), it seems the advertising spend on them has become excessive and not cost effective.
- JMTQp8lwXL 6y agoThe results would be tainted by the free advertising brands get for boasting about cutting ad budgets.
- hellomyguys 6y ago>It's difficult to actually measure impact of ad spending, and marketing teams spin results to their advantage. Have you used any self-serve ad tool? It's quite easy actually.
- sokoloff 6y agoIt's quite easy to get a measurement on your screen. That doesn't necessarily translate to measuring the impact of ad spending. If I have social media ads, paid search, and retargeting ads all live on multiple platforms, there is undoubtedly interaction among them and the quite-easy self-serve ad tool is likely to show me a simplistic "last click attribution" at best.
- shoguning 6y agoExactly. For really large companies with many channels, it's very difficult to disentangle this. Here is a good discussion of the difficulty: https://thecorrespondent.com/100/the-new-dot-com-bubble-is-here-its-called-online-advertising/13228924500-22d5fd24 https://thecorrespondent.com/100/the-new-dot-com-bubble-is-h...
- willcipriano 6y agoOften on Google I see ads right above a organic link to the same site. I wonder if marketing teams count the ad click as a "win" when in fact I was looking for the company because I learned of it via word of mouth.
- sokoloff 6y agoI’ve always seen that considered to be “paid search-branded”, which is tracked but is tracked and treated separately (for the reason you said).
- jjohansson 6y agoMost analytics platforms will report on any straight direct line between spend and incremental revenue. The hard part is measuring the indirect part, as you mentioned, but it is possible.
- nostromo 6y ago2020 is very atypical and not a good time to run a "marketing off" test. Even if you did an A/B or multivariate test across different markets, you'd probably be measuring local responses to Covid more than you'd be measuring Facebook marketing effectiveness.
- politician 6y agoOn the other hand, with stay-at-home orders media consumption is at an all-time high. Ads should outperform in this environment.
- mmm_grayons 6y agoThis assumes your conversion rate from media is the same. It's reasonable to hypothesize that most are significantly more reluctant to spend money in this environment.
- politician 6y agoAgreed; it depends on the product.
- CaveTech 6y agoEngagement rates are way up, but conversion rates are down. Overall a net benefit in my line of business, but it's affecting other segments different ways.
- garmaine 6y agoIt doesn't matter. The test is "should we be spending money on this in 2020", not testing a hypothetical situation where the pandemic doesn't exist.
- lalos 6y agoWith that same argument you can conclude that since 2020 is very atypical then it's not a good time to run the usual strategy of last year. Might as well switch it up, cut costs or react (in case they saw that ad clicks went up, but not the actual sales).
- fullshark 6y agoMy interpretation: old media doesn't understand new media.
- emmp 6y agoIt's not exactly blackout testing if the blackout testing itself is highly visible and gets positive earned media.
- sanxiyn 6y agoLet's See Your Treatment Effects! https://www.youtube.com/watch?v=xd3gQAV1ncs https://www.youtube.com/watch?v=xd3gQAV1ncs Run an experiment And let the truth fall out
- usrusr 6y agoYes, I think it's a fault line that has been waiting to crack for quite a while. Facebook has never been a good match for those big household-name brands because for them targeted ads add very little value over blanket ads. They begrudgingly pay a heavy premium on targeting only because some demographics have completely detached themselves from blanket ad media. That's not how a happy customer relationship looks like. Marketing departments (or external intermediaries) don't mind the lower value proposition at all, because they get all those micromanagement opportunities and (perceived) necessities offered by self-serve targeting platforms. Huge opportunities to look important. I wonder how the management overhead per dollar spent on ads has developed in the last 20 years.
- neonate 6y agoThat is an ingenious interpretation. Probably too ingenious though, especially across all the companies involved.
- spootze 6y agoFacebook is actually one of the few platforms (if not the only platform?) that allows running self-serve RCTs (conversion lift tests in their lingo): https://www.facebook.com/business/help/688346554927374 https://www.facebook.com/business/help/688346554927374 Conditional on them honestly reporting numbers, it's a pretty credible way to measure effectiveness in terms of incremental conversions you get by showing ads on FB/IG