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The ad platforms have very clear incentives to deliver the ads that perform best for marketers so that the marketers spend more with the ad platform. As much a

by ssharp 6y ago

The ad platforms have very clear incentives to deliver the ads that perform best for marketers so that the marketers spend more with the ad platform. As much as you think the ads are doing a poor job, they're likely doing a better job in aggregate than alternatives. Retargeting ads deliver higher value than prospecting ads so that's likely why you get so many more of those.

frenchie4111 6y ago
Honest question: Do retargeting ads just appear to perform better because I already had purchase intent and I was already going to go back there to buy it later anyway?
- m12k 6y ago
  It's hard to tell, since that data isn't publicly available. But I read this article, which makes the case that this is often the case, and that marketing departments are willfully ignoring this, because it's in their interest to appear useful to the rest of their organization, and it's easy to hide using bad statistics: https://thecorrespondent.com/100/the-new-dot-com-bubble-is-here-its-called-online-advertising https://thecorrespondent.com/100/the-new-dot-com-bubble-is-h...
- ssharp 6y ago
  This is a completely fair question and is something anyone working in performance optimization (marketing, product, etc.) should be asking themselves all the time when looking at data and finding ways to suss it out. In the case of retargeting ads, you can run tests to figure it out. When I was doing more on the marketing side, I used to find a non-profit and then show ads for the non-profit to my retargeting audiences. That way we could test to see what kind of value our retargeting ads had vs. a completely irrelevant retargeted ad. For the most part, the relevant retargeted ad outperformed irrelevant by enough magnitude to make the retargeting campaign profitable.
WorldMaker 6y ago
I think the illusion of "cheap" confuses most marketers. Marketers are left with an unbalanced sense that they are getting higher bang for their buck, ignoring centuries of marketing best practices about expanding reach and exploring non-traditional targets for secondary/tertiary effects. But I think it works well for the ad platforms themselves in the way that it encourages whales just like microtransactions in games. A marketer has an easier time considering opportunity cost for one big ad spend, versus not even paying attention to opportunity cost as they buy a lot of individual micro-targets. (And relatedly not paying attention to how much they are over-spending on people that already have their message versus missing opportunities on greater reach.)

by ssharp 6y ago

frenchie4111 6y ago

Honest question: Do retargeting ads just appear to perform better because I already had purchase intent and I was already going to go back there to buy it later anyway?

m12k 6y ago
It's hard to tell, since that data isn't publicly available. But I read this article, which makes the case that this is often the case, and that marketing departments are willfully ignoring this, because it's in their interest to appear useful to the rest of their organization, and it's easy to hide using bad statistics: https://thecorrespondent.com/100/the-new-dot-com-bubble-is-here-its-called-online-advertising https://thecorrespondent.com/100/the-new-dot-com-bubble-is-h...
ssharp 6y ago
This is a completely fair question and is something anyone working in performance optimization (marketing, product, etc.) should be asking themselves all the time when looking at data and finding ways to suss it out. In the case of retargeting ads, you can run tests to figure it out. When I was doing more on the marketing side, I used to find a non-profit and then show ads for the non-profit to my retargeting audiences. That way we could test to see what kind of value our retargeting ads had vs. a completely irrelevant retargeted ad. For the most part, the relevant retargeted ad outperformed irrelevant by enough magnitude to make the retargeting campaign profitable.

WorldMaker 6y ago

I think the illusion of "cheap" confuses most marketers. Marketers are left with an unbalanced sense that they are getting higher bang for their buck, ignoring centuries of marketing best practices about expanding reach and exploring non-traditional targets for secondary/tertiary effects. But I think it works well for the ad platforms themselves in the way that it encourages whales just like microtransactions in games. A marketer has an easier time considering opportunity cost for one big ad spend, versus not even paying attention to opportunity cost as they buy a lot of individual micro-targets. (And relatedly not paying attention to how much they are over-spending on people that already have their message versus missing opportunities on greater reach.)