10 ms·
Ineffective ads require higher spend than the effective ones. At 100% effectiveness (100% conversion rate) you only need to buy N ads to target your sale targe
by mrcode007 3y ago
Ineffective ads require higher spend than the effective ones.
At 100% effectiveness (100% conversion rate) you only need to buy N ads to target your sale target of N.
Less effective ads mean you need to buy more of them
- thehappypm 3y agoBut that also means they’d be cheaper. Advertisers don’t buy ads unless they have measurable ROI. It doesn’t matter if it’s 1000 impressions for $1 for 1 conversion, or 10 video views for $1 for 1 conversion, or a million impressions for $1 for 1 conversion. It’s just money spent vs money gained.
- tuxpenguine 3y agoMarketers should spend every extra dollar on the ad platform with the lowest customer acquisition cost, so if Google ads are more ineffective compared to others, then its customer will go somewhere else and hence it will have less revenue.
- mrcode007 3y agoDuring the social media ad pause of the 2020, we had multiple companies admit in earnings calls and elsewhere that pausing advertisement had no impact on their sales at all. The extreme end of that spectrum is Tesla with no advertising whatsoever. This kind of observation makes me pause and cause some reflection on ads in general.
- minsc_and_boo 3y agoNit: Tesla has word of mouth advertising, which works for automobiles when you have brand loyalty.
- seydor 3y agoDo they pay for it?
- candiodari 3y agoWell they have to pay some engineers occasionally to work on flamethrowers.
- minsc_and_boo 3y agoYes - https://www.tesla.com/support/refer-and-earn https://www.tesla.com/support/refer-and-earn
- minsc_and_boo 3y agoEven at hypothetical 100% effectiveness, you're still going to be spending the same budget to match variable ROI on CPCs and CPA.