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>Stopped [some] Spending on Digital Ads, Nothing Happened. Why? [Added "some" for clarity.] Let me try to restate the author's article because he presents it

by jasode 6y ago

>Stopped [some] Spending on Digital Ads, Nothing Happened. Why? [Added "some" for clarity.] Let me try to restate the author's article because he presents it in a confusing way. The issue is that both Google and Facebook have "core ad tech" that works decently with proven ROI -- and they both have "additional ad tech inventory" (a.k.a the partners/affiliates) that's much lower quality: Facebook "quality" ad placements on their core platforms with decent ROI: - ads in Facebook Newsfeed - ads in Instagram feed The "questionable" ad placements with much lower (possibly zero) ROI: - ads in Facebook Audience Network (Here's an example screenshot in Facebook's Ads Manager to visualize the options above: https://storage.googleapis.com/website-production/uploads/2018/03/ad-placement-options-facebook-1.png https://storage.googleapis.com/website-production/uploads/20...) Same concept applies to Google AdWords. The adwords clicks on "google.com" perform better than the ones coming from partner websites. The lower quality ad tech in partner networks has more bots, more scam websites, more fraud, more negatives, etc that reduce ROI. Bottom line is... if you're buying digital ads, you need to understand exactly what type of clicks you're paying for and how it actually performs.

acfou 6y ago
great summary
croes 6y ago
Source?
- cm2012 6y ago
  This all true. Source: My 11 years running ads on these platforms.
  - Judgmentality 6y ago
    Can you please elaborate? Your source is just an appeal to authority, but I would really appreciate more evidence to help explain your position.
  - tehlike 6y ago
    It is true. Partner sites make revenue for the partner through revshare and partners attempt to create fake clicks and even conversions to inflate their revenue. Cobra effect in play. This risk is zero (except for things like ad neuseam) on first party / owned and operated placements like search/ig/fb. As with anything you should verify your roi through third party measurement providers, just like you would do for others. Disclaimer: current fb ads engineer, former google ads engineer.
  - croes 6y ago
    By that logic any lottery winner could argue that lotteries are a great pension plan.
    - cm2012 6y ago
      If they consistently win lotteries year after year with a good ROI, sure. Not sure how that comparison works.
      - anishjain2000 6y ago
        may be this is there trick
      - anishjain2000 6y ago
        what if
      - croes 6y ago
        Ever heard of survivor bias? Let me make an example: I choose 2048 random addresses. I choose I random company on the stock market. Half of the addresses I send a email stating the stock will rise in the next month, the other half the stock will fall. After a month I check the stock and disgard the addresses where my prediction was wrong. Than I repeat the previuos steps until only one address is left. Now ask him about my expertise on the stock market.
- croes 6y ago
  Really? Downvoted because I wanted to know the source for the proven ROI?
  - anishjain2000 6y ago
    i agreed with u
Animats 6y ago
That's more or less accepted. Ads that appear in Google search results have some value, since they appear when someone is looking for something specific. That's measurable. Ads that appear on irrelevant web pages have less value. That's well known. Apparently so little value that it's near zero for known brands, this article says. In the end, they're like useless banner ads. Mostly clicked on by bots.
nabla9 6y ago
It's not about clicks or traffic. The real issue is selection effect vs. advertising effect SEO traffic benchmarks don't measure the right ting or show real ROI. FB or Google don't want you to measure the right thing. Traffic to the website has licks, purchases and downloads that are happening anyway (selection effect) and clicks, purchases and downloads that would not have happened without ads (advertising effect) mixed. Only way to differentiate between the two is do real experiment where you divide target groups in two sections and show only the other group the ads. When you do this experiment correctly, you find out that online ads are usually wasted money for any established brand and lower than expected value for less known brands.
- marketingtech 6y ago
  These are pretty easy to measure on Google or FB with their "lift study" tools and a conversion pixel. The lift tools will let you create a holdout group of X% of people who should be targeted by your ad. They won't see the ad, but you can still measure the rate at which they convert on your site. Then, you can compare that conversion rate to the rate of people who actually saw/clicked the ad. Conversion pixels are never 100% accurate (and are becoming increasingly inaccurate due to browser/OS changes) and shouldn't be used to say "This ad generated exactly X sales that wouldn't have happened otherwise!", but you can examine the relative rates from people who saw or didn't see your campaign. I've also seen companies who don't trust FB/G to grade their own homework on a known lift study, so they measure the effect by running PSA ads. Their ad campaign will be something like "Donate to charity XYZ!" but will be set to measure purchases on their website. That lets them establish the baseline purchase rate of the customers in their audience.
  - dylan604 6y ago
    > They won't see the ad, but you can still measure the rate at which they convert on your site. This sounds like such an assumption. There's no guarantee that any one person will ever "convert" on your site. That's such an ugly carrot that FB/G are dangling in front of you. "If you spend enough money with us, we'll eventually show your ad to someone that will absolutely buy your product. Pinky swear, just keep putting coins in the slot to continue".
tnt128 6y ago
Just because the ad placement is low quality (eg audience network) doesn’t mean they can’t produce a positive ROI. Keep in mind, Lower quality comes with a lower price, so it makes sense for some brands, and some products. The reason people dont get a positive return on low quality ad placement is that they often use the same ad, or adverse the same product as for the higher quality ad placement. These ads and product often needs to be tailored for that specific placement.
jariel 6y ago
Text-based search ads - are completely different from - network banners ads. They are used for different reasons. 100% of ad buyers, marketing people know this, it's not an insight. Nobody is 'accidentally spending money' on banner ads, when they thought they'd be spending money on Text ads. Also - it's very straight forward to apply different measurements to FB ads in and out of network.
MichaelMoser123 6y ago
i usually get ads for things that i just bought. That means they are very good at snooping, on the other hand if I just bought a TV set then that doesn't mean that i would need another one soon. Funny that Goole/Facebook currently don't seem to be running ads for complements of products too often; Amazon is better at that (if you bought this book, then you might also want this one).
- jrumbut 6y ago
  It seems like we've been talking about this so long that a complementary product feature would be standard everywhere even if it didn't work.
lumost 6y ago
There’s a useful correlary to this for consumer tech. While it is tempting to monetize with a publisher network, these networks don’t work well enough to justify their own spend for many advertisers. As a publisher you’ll likely be stuck in a race to the bottom until you have sufficient scale for direct ad deals (read as 10s of million MAU). I’m not sure if kicking fraud out of these platforms would raise ROI, or reveal that the real price of banner ads and interstitials is 0.

by jasode 6y ago

acfou 6y ago

great summary

croes 6y ago

Source?

cm2012 6y ago
This all true. Source: My 11 years running ads on these platforms.
- Judgmentality 6y ago
  Can you please elaborate? Your source is just an appeal to authority, but I would really appreciate more evidence to help explain your position.
- tehlike 6y ago
  It is true. Partner sites make revenue for the partner through revshare and partners attempt to create fake clicks and even conversions to inflate their revenue. Cobra effect in play. This risk is zero (except for things like ad neuseam) on first party / owned and operated placements like search/ig/fb. As with anything you should verify your roi through third party measurement providers, just like you would do for others. Disclaimer: current fb ads engineer, former google ads engineer.
- croes 6y ago
  By that logic any lottery winner could argue that lotteries are a great pension plan.
  - cm2012 6y ago
    If they consistently win lotteries year after year with a good ROI, sure. Not sure how that comparison works.
    - anishjain2000 6y ago
      may be this is there trick
    - anishjain2000 6y ago
      what if
    - croes 6y ago
      Ever heard of survivor bias? Let me make an example: I choose 2048 random addresses. I choose I random company on the stock market. Half of the addresses I send a email stating the stock will rise in the next month, the other half the stock will fall. After a month I check the stock and disgard the addresses where my prediction was wrong. Than I repeat the previuos steps until only one address is left. Now ask him about my expertise on the stock market.
croes 6y ago
Really? Downvoted because I wanted to know the source for the proven ROI?
- anishjain2000 6y ago
  i agreed with u

Animats 6y ago

That's more or less accepted. Ads that appear in Google search results have some value, since they appear when someone is looking for something specific. That's measurable. Ads that appear on irrelevant web pages have less value. That's well known. Apparently so little value that it's near zero for known brands, this article says. In the end, they're like useless banner ads. Mostly clicked on by bots.

nabla9 6y ago

It's not about clicks or traffic. The real issue is selection effect vs. advertising effect SEO traffic benchmarks don't measure the right ting or show real ROI. FB or Google don't want you to measure the right thing. Traffic to the website has licks, purchases and downloads that are happening anyway (selection effect) and clicks, purchases and downloads that would not have happened without ads (advertising effect) mixed. Only way to differentiate between the two is do real experiment where you divide target groups in two sections and show only the other group the ads. When you do this experiment correctly, you find out that online ads are usually wasted money for any established brand and lower than expected value for less known brands.

marketingtech 6y ago
These are pretty easy to measure on Google or FB with their "lift study" tools and a conversion pixel. The lift tools will let you create a holdout group of X% of people who should be targeted by your ad. They won't see the ad, but you can still measure the rate at which they convert on your site. Then, you can compare that conversion rate to the rate of people who actually saw/clicked the ad. Conversion pixels are never 100% accurate (and are becoming increasingly inaccurate due to browser/OS changes) and shouldn't be used to say "This ad generated exactly X sales that wouldn't have happened otherwise!", but you can examine the relative rates from people who saw or didn't see your campaign. I've also seen companies who don't trust FB/G to grade their own homework on a known lift study, so they measure the effect by running PSA ads. Their ad campaign will be something like "Donate to charity XYZ!" but will be set to measure purchases on their website. That lets them establish the baseline purchase rate of the customers in their audience.
- dylan604 6y ago
  > They won't see the ad, but you can still measure the rate at which they convert on your site. This sounds like such an assumption. There's no guarantee that any one person will ever "convert" on your site. That's such an ugly carrot that FB/G are dangling in front of you. "If you spend enough money with us, we'll eventually show your ad to someone that will absolutely buy your product. Pinky swear, just keep putting coins in the slot to continue".

tnt128 6y ago

Just because the ad placement is low quality (eg audience network) doesn’t mean they can’t produce a positive ROI. Keep in mind, Lower quality comes with a lower price, so it makes sense for some brands, and some products. The reason people dont get a positive return on low quality ad placement is that they often use the same ad, or adverse the same product as for the higher quality ad placement. These ads and product often needs to be tailored for that specific placement.

jariel 6y ago

Text-based search ads - are completely different from - network banners ads. They are used for different reasons. 100% of ad buyers, marketing people know this, it's not an insight. Nobody is 'accidentally spending money' on banner ads, when they thought they'd be spending money on Text ads. Also - it's very straight forward to apply different measurements to FB ads in and out of network.

MichaelMoser123 6y ago

i usually get ads for things that i just bought. That means they are very good at snooping, on the other hand if I just bought a TV set then that doesn't mean that i would need another one soon. Funny that Goole/Facebook currently don't seem to be running ads for complements of products too often; Amazon is better at that (if you bought this book, then you might also want this one).

jrumbut 6y ago
It seems like we've been talking about this so long that a complementary product feature would be standard everywhere even if it didn't work.

lumost 6y ago

There’s a useful correlary to this for consumer tech. While it is tempting to monetize with a publisher network, these networks don’t work well enough to justify their own spend for many advertisers. As a publisher you’ll likely be stuck in a race to the bottom until you have sufficient scale for direct ad deals (read as 10s of million MAU). I’m not sure if kicking fraud out of these platforms would raise ROI, or reveal that the real price of banner ads and interstitials is 0.