15 ms·

> Sure, you're never going to know exactly how many people you advertised to would have organically, eventually found your product and bought it. But that hones

by st1x7 6y ago

> Sure, you're never going to know exactly how many people you advertised to would have organically, eventually found your product and bought it. But that honestly doesn't seem that important compared to the other metrics... Wait, why wouldn't that be important? It seems like the most important question since it asks whether advertising has any significant impact at all.

megablast 6y ago
Does advertising create an increase in buying your product. That’s the most important question.
- monkeybutton 6y ago
  At least with ecommerce one can track users that have seen and/or clicked on ads with what they have purchased and return on ad spend can be calculated. But yes, the question still is: does it raise intent or did the user already want the thing, googled it, and clicked on the first result (which is your ad, above the organic results that also lead to your online store)?
  - dlp211 6y ago
    The fundamental problem with this is that if I bought your product, it's because I was looking for your product after doing a decent amount of research which meant I was on a bunch of retargeting lists and you've wasted money on me. I have never to my recollection purchased anything because of an ad. If I have clicked through an ad, it was simply because it was the quickest way to get to the website/product. There is a role for advertising because Google polluted their organic search results with Ads making it harder for you to find what you want and forcing you to compete for the top Ad spot. I realize that I can only speak for myself, but I have never seen any evidence that advertising works and I've worked in ad tech.
    - ipsum2 6y ago
      It's pretty clear to see direct causation when using ads to promote your product. Promote your product using ads for 1 month, then turn off ads and see how many sales you get. For a majority of e-commerce, you'll see a substantial drop.
    - secondcoming 6y ago
      You've researched every item you buy in your weekly shop? You've never bought anything on a whim, or a gift for someone else?
- Aeolun 6y ago
  If you are sinking $100M in, I sure hope it’s having some effect.
  - LoSboccacc 6y ago
    You're also bidding for eyeballs. An established player might want to scoop up the most relevant keywords forcing competitors to at least price match, effectively starving them either of views or cash
- deleted 6y ago
  [deleted]
wonnage 6y ago
There's still value in getting people to buy now instead of maybe buying later.
joe_the_user 6y ago
The thing about the "advertising doesn't matter" argument is that there are situations where advertising absolutely matters - when a company is just starting out and there's no way they can get organic referrals, when the public is unaware of their existence, etc. Moreover, most companies started small at some point so advertising and maintaining advertising made sense up to a point. And if we look at those companies where maybe advertising actually doesn't help, companies that have reached a level of success where organic referrals and public awareness drive most of their business. And they're ongoing businesses that probably reached that level through advertising and have money now to use for that. But not only are they already advertising but they don't if their word-of-mouth/public-knowledge presence will last indefinitely, they don't know if just word-of-mouth would let them control their image, would stand-up against future competitors ads and so-forth. So, even supposing you could show advertising didn't offer any immediate increase in customers, continuing to spend on it doesn't seem to me as irrational as it sounds.
- ghaff 6y ago
  Furthermore, many of the people who say they hate advertising also hate PR and other sort of marketing campaigns. So presumably their theory is that people should build something and just hope people will discover them somehow.
  - shadowgovt 6y ago
    It's a subset of the misunderstanding of "meritocracy" that defines it as "how well you can do at a narrowly-defined task" as opposed to the practical definition of "How many people know how well you do at a narrowly-defined task." Our industry is shot-through with idealists who believe meritocracy should be the former, when in reality it's always been the latter (and always will be, unless someone can invent omniscient humans).
    - ghaff 6y ago
      Well, and arguably, "How many people know how well you do at a set of tasks that are broadly relevant to them."
asdfasgasdgasdg 6y ago
Maybe the person is referencing how difficult it is to determine the value of the counterfactual? If it were possible to determine I imagine people would really want to know.
reissbaker 6y ago
I think the implication here is "that honestly doesn't seem that important" because the expectation is that the number of people who would find you anyway would be a small number compared to a well-run ad campaign, at least over timeframes startups care about. Having worked with a decent number of small teams without a lot of brand recognition, ads bring in a lot of customers: it was pretty obvious in our metrics when we ran ad campaigns vs when we didn't. Sure, eventually a few of those people may have found their way to us somehow anyway, but there was a step change in volume from ads. At least in my experience, the idea that ads have no significant impact is not really supported by the evidence. I assume that's what the OP meant by it not seeming important: they're working under the assumption that "do any ads do anything" is clear and you don't need to prove the worth there — instead you need to prove which ads work better than others, and cull the ones that don't perform well (which will also help save you from scammers). One could argue that advertising for large brands with name recognition could be less valuable. I don't really have data or experience to know that one way or another, but in a competitive market that seems a little hard to believe. Tesla is an interesting counterexample, but I think it may be in part due to the EV market in the US not being particularly competitive; no one makes attractive, mid-priced cars with long range other than Tesla, let alone having an established charging network for road trips. And Elon's antics are, tbh, a form of marketing in and of themselves; "all press is good press." Edit: I wrote the above paragraph badly. I can definitely believe ads are less valuable if you're a big brand vs a small one. But I'd be surprised if they're useless, at least in a competitive market. People don't have infinite money, so if they're looking to buy X and an ad for X from your competitor pops up, it seems reasonable to me that some percentage of the time your competitor would make the sale and thus you wouldn't, even if organically that sale might've gone to your company instead. Also, I wouldn't argue that even small companies need ads — just that they do seem to be effective at increasing the volume of people interested in using your product at a given time. That may or may not be necessary/useful depending on your situation. I have been on teams where we intentionally turned off ad campaigns because we learned what we needed to learn from the cohort of new users, and now wanted to improve the product based on their feedback before spending money on more ads.
- lasc4r 6y ago
  >One could argue that advertising for large brands with name recognition could be less valuable. It is without a doubt, and this is what the Freakonomics advertising episodes are mostly about.
mumblemumble 6y ago
It's critically important for adtech companies' customers, since it's an essential part of determining return on investment. But it's also critically important for both adtech companies and data scientists who work in the space to direct people's attention away from those sorts of metrics. You generally don't want to call the attention of the person who signs your paycheck toward the fact that it's all but impossible to really know for sure if your service has delivered them any net benefit.
- pnw_hazor 6y ago
  This is creeping pretty close to the legal definition of fraud. But advertising has had a fair amount of safe-harbor carve-outs for over a 100 years or so that are not available to other industries. So it is no surprise it continues today. edit: I hate to say it but the auto-downvoters here on HN are approaching reddit levels. Everything I said above is true.
  - deleted 6y ago
    [deleted]
    - deleted 6y ago
      [deleted]
  - TeMPOraL 6y ago
    This is the industry whose job is to manipulate and deceive people. It should surprise no one that, if they do that to others, they'll do that to themselves as well.
  - jodrellblank 6y ago
    > "edit: I hate to say it but the auto-downvoters here on HN are approaching reddit levels. Everything I said above is true." It's not that you're wrong, it's that you're boring. "I knew this years ago, look how my cynicism is superior to your naievite" is a boring comment to read. You could explain why you think this is any closer to fraud compared to selling anything else and claiming it's the best in its class, or what safe-harbor carve outs by whom, or why they matter more than other effects, or what you think should be done to change them, or anything more substantial than "I'm not surprised". Oh aren't you? Great, cool story bro. Except it's not /even/ a cool story. It's old man "get off my lawn". It's every tech forum's old-man status grabbing which is now approaching Reddit /r/SysAdmin levels on HN. The only question is whether aggressive downvoting can curb its growth here before it gets a choke-hold.

by st1x7 6y ago

megablast 6y ago

Does advertising create an increase in buying your product. That’s the most important question.

monkeybutton 6y ago
At least with ecommerce one can track users that have seen and/or clicked on ads with what they have purchased and return on ad spend can be calculated. But yes, the question still is: does it raise intent or did the user already want the thing, googled it, and clicked on the first result (which is your ad, above the organic results that also lead to your online store)?
- dlp211 6y ago
  The fundamental problem with this is that if I bought your product, it's because I was looking for your product after doing a decent amount of research which meant I was on a bunch of retargeting lists and you've wasted money on me. I have never to my recollection purchased anything because of an ad. If I have clicked through an ad, it was simply because it was the quickest way to get to the website/product. There is a role for advertising because Google polluted their organic search results with Ads making it harder for you to find what you want and forcing you to compete for the top Ad spot. I realize that I can only speak for myself, but I have never seen any evidence that advertising works and I've worked in ad tech.
  - ipsum2 6y ago
    It's pretty clear to see direct causation when using ads to promote your product. Promote your product using ads for 1 month, then turn off ads and see how many sales you get. For a majority of e-commerce, you'll see a substantial drop.
  - secondcoming 6y ago
    You've researched every item you buy in your weekly shop? You've never bought anything on a whim, or a gift for someone else?
Aeolun 6y ago
If you are sinking $100M in, I sure hope it’s having some effect.
- LoSboccacc 6y ago
  You're also bidding for eyeballs. An established player might want to scoop up the most relevant keywords forcing competitors to at least price match, effectively starving them either of views or cash
deleted 6y ago
[deleted]

wonnage 6y ago

There's still value in getting people to buy now instead of maybe buying later.

joe_the_user 6y ago

The thing about the "advertising doesn't matter" argument is that there are situations where advertising absolutely matters - when a company is just starting out and there's no way they can get organic referrals, when the public is unaware of their existence, etc. Moreover, most companies started small at some point so advertising and maintaining advertising made sense up to a point. And if we look at those companies where maybe advertising actually doesn't help, companies that have reached a level of success where organic referrals and public awareness drive most of their business. And they're ongoing businesses that probably reached that level through advertising and have money now to use for that. But not only are they already advertising but they don't if their word-of-mouth/public-knowledge presence will last indefinitely, they don't know if just word-of-mouth would let them control their image, would stand-up against future competitors ads and so-forth. So, even supposing you could show advertising didn't offer any immediate increase in customers, continuing to spend on it doesn't seem to me as irrational as it sounds.

ghaff 6y ago
Furthermore, many of the people who say they hate advertising also hate PR and other sort of marketing campaigns. So presumably their theory is that people should build something and just hope people will discover them somehow.
- shadowgovt 6y ago
  It's a subset of the misunderstanding of "meritocracy" that defines it as "how well you can do at a narrowly-defined task" as opposed to the practical definition of "How many people know how well you do at a narrowly-defined task." Our industry is shot-through with idealists who believe meritocracy should be the former, when in reality it's always been the latter (and always will be, unless someone can invent omniscient humans).
  - ghaff 6y ago
    Well, and arguably, "How many people know how well you do at a set of tasks that are broadly relevant to them."

asdfasgasdgasdg 6y ago

Maybe the person is referencing how difficult it is to determine the value of the counterfactual? If it were possible to determine I imagine people would really want to know.

reissbaker 6y ago

I think the implication here is "that honestly doesn't seem that important" because the expectation is that the number of people who would find you anyway would be a small number compared to a well-run ad campaign, at least over timeframes startups care about. Having worked with a decent number of small teams without a lot of brand recognition, ads bring in a lot of customers: it was pretty obvious in our metrics when we ran ad campaigns vs when we didn't. Sure, eventually a few of those people may have found their way to us somehow anyway, but there was a step change in volume from ads. At least in my experience, the idea that ads have no significant impact is not really supported by the evidence. I assume that's what the OP meant by it not seeming important: they're working under the assumption that "do any ads do anything" is clear and you don't need to prove the worth there — instead you need to prove which ads work better than others, and cull the ones that don't perform well (which will also help save you from scammers). One could argue that advertising for large brands with name recognition could be less valuable. I don't really have data or experience to know that one way or another, but in a competitive market that seems a little hard to believe. Tesla is an interesting counterexample, but I think it may be in part due to the EV market in the US not being particularly competitive; no one makes attractive, mid-priced cars with long range other than Tesla, let alone having an established charging network for road trips. And Elon's antics are, tbh, a form of marketing in and of themselves; "all press is good press." Edit: I wrote the above paragraph badly. I can definitely believe ads are less valuable if you're a big brand vs a small one. But I'd be surprised if they're useless, at least in a competitive market. People don't have infinite money, so if they're looking to buy X and an ad for X from your competitor pops up, it seems reasonable to me that some percentage of the time your competitor would make the sale and thus you wouldn't, even if organically that sale might've gone to your company instead. Also, I wouldn't argue that even small companies need ads — just that they do seem to be effective at increasing the volume of people interested in using your product at a given time. That may or may not be necessary/useful depending on your situation. I have been on teams where we intentionally turned off ad campaigns because we learned what we needed to learn from the cohort of new users, and now wanted to improve the product based on their feedback before spending money on more ads.

lasc4r 6y ago
>One could argue that advertising for large brands with name recognition could be less valuable. It is without a doubt, and this is what the Freakonomics advertising episodes are mostly about.

mumblemumble 6y ago

It's critically important for adtech companies' customers, since it's an essential part of determining return on investment. But it's also critically important for both adtech companies and data scientists who work in the space to direct people's attention away from those sorts of metrics. You generally don't want to call the attention of the person who signs your paycheck toward the fact that it's all but impossible to really know for sure if your service has delivered them any net benefit.

pnw_hazor 6y ago
This is creeping pretty close to the legal definition of fraud. But advertising has had a fair amount of safe-harbor carve-outs for over a 100 years or so that are not available to other industries. So it is no surprise it continues today. edit: I hate to say it but the auto-downvoters here on HN are approaching reddit levels. Everything I said above is true.
- deleted 6y ago
  [deleted]
  - deleted 6y ago
    [deleted]
- TeMPOraL 6y ago
  This is the industry whose job is to manipulate and deceive people. It should surprise no one that, if they do that to others, they'll do that to themselves as well.
- jodrellblank 6y ago
  > "edit: I hate to say it but the auto-downvoters here on HN are approaching reddit levels. Everything I said above is true." It's not that you're wrong, it's that you're boring. "I knew this years ago, look how my cynicism is superior to your naievite" is a boring comment to read. You could explain why you think this is any closer to fraud compared to selling anything else and claiming it's the best in its class, or what safe-harbor carve outs by whom, or why they matter more than other effects, or what you think should be done to change them, or anything more substantial than "I'm not surprised". Oh aren't you? Great, cool story bro. Except it's not /even/ a cool story. It's old man "get off my lawn". It's every tech forum's old-man status grabbing which is now approaching Reddit /r/SysAdmin levels on HN. The only question is whether aggressive downvoting can curb its growth here before it gets a choke-hold.