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While this is probably true -- or even worse -- I think this is already baked into the rates advertisers are paying. Sophisticated advertisers have conversion r

While this is probably true -- or even worse -- I think this is already baked into the rates advertisers are paying. Sophisticated advertisers have conversion rates they track carefully and what they bid/spend on ads is worked-to backwards from that number. In other words, if a conversion is worth $5 to me, and I see I get a 3% conversion rate, I'm not going to spend more than $0.15 per click. Obviously this isn't a universal truth, and branding campaigns are more difficult to price, but this story is posted cyclically and it I often read people's take that this is a stat indicating things are unsustainable and headed for a correction, but I think we're past that. Online advertisers have grown more sophisticated over the last decade and CPMs & CPCs have dropped significantly along with that. Curious what anybody else thinks..

dave_sullivan 13y ago
I agree. Fake traffic or not, it's factored into the price and the stats are still just too good compared to what you can get anywhere else from an information standpoint. As a marketing person, you're always proving your worth--digital ads make this a lot easier (at least if you're good at your job). The problem (at least if you're selling digital ads) is I don't see a scenario where margins increase. The "ad network" effect will continue and there will be more consolidation in the industry with more link-bait headlines coming out of blog mills. The area where there could be more profit would be if content creators integrated more with advertisers, which is only going to get hairy and annoying in a different way. But for something like NYT--I wouldn't be all that surprised if the line between advertiser and content continues getting more fuzzy in order to maintain decent CPMs on what is probably a relatively fixed amount of traffic/inventory. Another opportunity comes to mind--better demographic targeting, better inference algorithms (given a list of factors, what can we tell about this person re: age/sex/income/likelihood-to-buy-our-specific product-based-on-past-purchases?)--these will also allow content creators to maintain higher CPMs, so there's probably a market there.
gettheyayo 13y ago
'Sophisticated advertisers have conversion rates" But many are not sophisticated. "I'm not going to spend more than $0.15 per click." You might for a while to test it, hoping it works or maybe try it with a fixed amount each month. Fraud hurts advertisers, can't gloss it over.
brandnewlow 13y ago
Yep, this is absolutely true. At Perfect Audience, our advertisers are often using as many as 3 or even 4 tools to track and measure their return on ad spend. The numbers don't always line up exactly from tool to tool, but they can see pretty quickly and clearly if a new channel's going to product ROI or be a dog for them.
corin_ 13y ago
On the one hand you're true, on the other hand if somebody steals £10 from my wallet every day I can budget my life to not care about it, but I'm still having money stolen from me. Just because it works now, if you could get rid of the fraud then either advertisers could get better value, or legitimate sellers could make more money, or both. Also, you'd be amazed how many advertisers don't track conversions. I've experience in both digital sales and buying, and on the sales side a huge number of clients wouldn't look at anything more than the impressions/clicks figures that we (truthfully) told them we delivered.
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dave_sullivan 13y ago

I agree. Fake traffic or not, it's factored into the price and the stats are still just too good compared to what you can get anywhere else from an information standpoint. As a marketing person, you're always proving your worth--digital ads make this a lot easier (at least if you're good at your job). The problem (at least if you're selling digital ads) is I don't see a scenario where margins increase. The "ad network" effect will continue and there will be more consolidation in the industry with more link-bait headlines coming out of blog mills. The area where there could be more profit would be if content creators integrated more with advertisers, which is only going to get hairy and annoying in a different way. But for something like NYT--I wouldn't be all that surprised if the line between advertiser and content continues getting more fuzzy in order to maintain decent CPMs on what is probably a relatively fixed amount of traffic/inventory. Another opportunity comes to mind--better demographic targeting, better inference algorithms (given a list of factors, what can we tell about this person re: age/sex/income/likelihood-to-buy-our-specific product-based-on-past-purchases?)--these will also allow content creators to maintain higher CPMs, so there's probably a market there.

gettheyayo 13y ago

'Sophisticated advertisers have conversion rates" But many are not sophisticated. "I'm not going to spend more than $0.15 per click." You might for a while to test it, hoping it works or maybe try it with a fixed amount each month. Fraud hurts advertisers, can't gloss it over.

brandnewlow 13y ago

Yep, this is absolutely true. At Perfect Audience, our advertisers are often using as many as 3 or even 4 tools to track and measure their return on ad spend. The numbers don't always line up exactly from tool to tool, but they can see pretty quickly and clearly if a new channel's going to product ROI or be a dog for them.

corin_ 13y ago

On the one hand you're true, on the other hand if somebody steals £10 from my wallet every day I can budget my life to not care about it, but I'm still having money stolen from me. Just because it works now, if you could get rid of the fraud then either advertisers could get better value, or legitimate sellers could make more money, or both. Also, you'd be amazed how many advertisers don't track conversions. I've experience in both digital sales and buying, and on the sales side a huge number of clients wouldn't look at anything more than the impressions/clicks figures that we (truthfully) told them we delivered.

deleted 13y ago
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