7 ms·

If you've got a team of smart people willing to drop $500k on a banner campaign and you can accurately measure the results and it's still worth it with all the

If you've got a team of smart people willing to drop $500k on a banner campaign and you can accurately measure the results and it's still worth it with all the fraud, good for you. If you're a mom and pop store looking to spend $500 on advertisements they should be made aware there's a good chance they will be defrauded unless they know what they are doing.

morley 11y ago
I think the article's point is that, if you compare banners to physical billboards, then you have the same issue but the billboard still works. So even your theoretical mom and pop store is getting value out of the impressions.
- moron4hire 11y ago
  There is no value to "impressions". Impressions != sales. Sales are the only thing we should be counting as value. Focusing on impressions is how we get click-fraud in the first place.
  - ryanworl 11y ago
    While sales resulting from ad impressions are important (i.e. direct response ads), wouldn't you also agree ads for establishing branding are important as well? The vast majority of ads for luxury cars, for example, aren't going to elicit an immediate purchase, but still provide value for the automaker down the line. Obviously the ads have to eventually lead to sales, but an immediate and trackable sale isn't always an option.
    - moron4hire 11y ago
      Startups aren't luxury car brands. If you're selling a product or service, I think you establish brand by making happy customers. That first requires a sale.
      - blowski 11y ago
        > You establish brand by making happy customers. That first requires a sale. In some cases, that may be right, but in general branding begins the first time someone interacts with your product (or even your industry). If I notice your business name on Google SERPS, I am engaging with your brand. I didn't really use NewRelic for 2 years after I first heard of it, but I did keep seeing them and speaking to them at events, reading blog posts, etc. Eventually, I signed up and paid for the product. What convinced me to do that was the branding work they did before I became a customer. Even for freemium products, the business builds a brand to encourage people to invest the effort into signing up. Even government services (e.g. in the UK - the BBC, the NHS) do branding work. Branding doesn't start at the point the customer enters their credit card. Lovemarks is a good read on branding - http://www.amazon.co.uk/Lovemarks-Effect-Winning-Consumer-Revolution/dp/157687267X/ref=sr_1_2?ie=UTF8&qid=1437397249&sr=8-2&keywords=lovemarks http://www.amazon.co.uk/Lovemarks-Effect-Winning-Consumer-Re...
      - JupiterMoon 11y ago
        And that first requires reputation. I'm not giving your company my credit card number if I've never heard of it.
        moron4hire 11y ago
        You should be able to get your first few sales without any brand identity, just based on the merits of your product. I expect the majority of people reading this site who actually have a project in the works are probably boot-strapping. There is no way they'll be able to spend on "building brand" before they start making sales. Whatever Facebook or Lexus or NHS or whomever does has no baring on us, we are fundamentally different beasts. Also, you're not sending me your credit card number, you're sending it to Stripe, or Amazon, or PayPal. Regardless, I think you severely overestimating how cautious people are with their credit card info.
        tankenmate 11y ago
        The bulk of the market are conscious of these issues; the "leading tail" of the market, the early adopters much less so. Obviously the "lagging tail" of the market won't buy without cash and without personally knowing the seller and inspecting the goods in person before buying. Branding however is for the rest of the market.
  - justuk 11y ago
    Click fraud is the opposite of impression based advertising. Click fraud is when the bad guys encourage people to sign up for services or click on links that offer a sales based bounty and are rewarded for their actions. Impression based brand advertising is a different model to click based lead advertising. The former places all the risk and work on the adveriser, the later pushes it towards the publisher. If you run a website that's hugely popular and don't want to waste your resources on other business's ad campaigns then selling by impression is the only sensible option.
  - maroonblazer 11y ago
    How can I buy a product or service I'm not even aware exists? That's the value of display advertising.
    - moron4hire 11y ago
      There are more ways to advertise than online.
    - dublinben 11y ago
      Do you only hear about good products from paid advertisements?
  - exelius 11y ago
    No, but if you're a brand marketer, you need to be able to perform demand planning. If $(ad spend) > (impressions) * (conversion rate) * (price) then you do it. You can't get around counting impressions. But it's not important that impressions are accurate; just that they behave roughly like they have in the past. What the article is saying is that there's an upper limit on the amount of fraud that can be perpetrated without showing up in other metrics, and at current prices, brand marketers just don't care. Because brand marketers don't care about impressions; they care about P&L at the brand level. If a banner ad campaign drives top line brand revenue, that's all they need it to do.
- jameshart 11y ago
  But when you pay someone to put up a billboard, there isn't a risk that they'll put it by a road they think gets tons of traffic, but is actually just used by one guy being paid by the building owner to drive past it repeatedly.
  - jaawn 11y ago
    ...and you also don't get thousands/millions of billboards put up for $500. This part of the comparison should probably be ignored as it is more to do with the intrinsic differences between the physical world and the digital "world" than it is with banner ads vs. billboards.
moron4hire 11y ago
This is really important. I really believe small-time projects have no business buying advertising online. It's just so incredibly low value that to scale it to meaningful results takes a lot more money than a person or small group of people bootstrapping their project on a shoestring can muster. For example: my wife has written a sci-fi novel. You can buy an eBook or paperback on Amazon. We would have to spend a few thousand dollars a month to acquire a single, purchasing reader. In contrast, I can drop around $100 on a booth at a book fair and sell 50 copies in about 8 hours. And we get almost all of those people to sign up for the mailing list (and almost all of them remember their email address well enough and have good enough handwriting to ensure it's a valid address). I don't get any chance to reconnect with my paying customers with just Amazon. No, I'm sure it doesn't scale as well, but we don't have anywhere near the money it would take to scale online advertising to even those low of sales numbers. But we have a large enough margin on the paperback (we're self publishing and print-on-demand has gotten pretty cheap) that we typically break even for the combined print/booth costs. Similarly, growing the mailing list for when we finish editing the next book (which will be any day now) has been a lot easier in-person. From the article: We use them to measure the efficacy of campaigns we run our way, using our metrics. We’ll spend a million bucks on a literal f**k ton of banners (I mean, just billions of the things, it’s crazy). And then we’ll do targeted brand sentiment and purchase- intent surveys using our internal peeps, online along with companies like Nielsen and Foresee, and offline with a bunch of (really quite awesome) companies you’ve never heard of. Then we’ll see whether the banners moved the needle, and if they did (and they often do), we’re happy. In other words, if you're not already successful, this article isn't for you.
- gjm11 11y ago
  I know it's terribly old-fashioned to take the word "literal" literally ... but I'm now trying to imagine what a "literal fuckton of banners" might actually be. It's pretty disturbing.
- fweespeech 11y ago
  As easy as it might be for some people to buy into your narrative, on HN, it realllllly isn't true. The basic statistics to calculate the RoI on a banner ad spend isn't particularly difficult when you have a software dev/web dev available. No matter how much click/impression fraud there is...you are trying to track conversions not clicks/impressions at that scale. If I know I spend $500 and get 10 sales, it isn't a statistically valid sample but its pretty clear if I break even on that $500...I should keep doing it since its essentially free marketing. Similarly, if I'm willing to eat $N per customer acquired via marketing, the same is true as long as $50/customer is equal to or less than my margin per sale + $N. "Sale" in this context is tracking what exactly those 10 people bought over the lifetime of them being a customer, generally. The only real thing the "already successful" people have is a bunch of smoke and mirrors that honestly doesn't have verifiable value that they use to bullshit clients. Conversion rate is literally the only statistic that is verifiable, cost effective to verify, and able to give you a concrete idea of whether or not the RoI of the campaign is worth it. We have an on staff statistician and his primary job is just automating the conversion rate calculations, the return-per-ad-campaign, etc. We spend enough money its worth hiring a staff statistician to do that but honestly any programmer with a book on statistics would 90% as good.

morley 11y ago

I think the article's point is that, if you compare banners to physical billboards, then you have the same issue but the billboard still works. So even your theoretical mom and pop store is getting value out of the impressions.

moron4hire 11y ago
There is no value to "impressions". Impressions != sales. Sales are the only thing we should be counting as value. Focusing on impressions is how we get click-fraud in the first place.
- ryanworl 11y ago
  While sales resulting from ad impressions are important (i.e. direct response ads), wouldn't you also agree ads for establishing branding are important as well? The vast majority of ads for luxury cars, for example, aren't going to elicit an immediate purchase, but still provide value for the automaker down the line. Obviously the ads have to eventually lead to sales, but an immediate and trackable sale isn't always an option.
  - moron4hire 11y ago
    Startups aren't luxury car brands. If you're selling a product or service, I think you establish brand by making happy customers. That first requires a sale.
    - blowski 11y ago
      > You establish brand by making happy customers. That first requires a sale. In some cases, that may be right, but in general branding begins the first time someone interacts with your product (or even your industry). If I notice your business name on Google SERPS, I am engaging with your brand. I didn't really use NewRelic for 2 years after I first heard of it, but I did keep seeing them and speaking to them at events, reading blog posts, etc. Eventually, I signed up and paid for the product. What convinced me to do that was the branding work they did before I became a customer. Even for freemium products, the business builds a brand to encourage people to invest the effort into signing up. Even government services (e.g. in the UK - the BBC, the NHS) do branding work. Branding doesn't start at the point the customer enters their credit card. Lovemarks is a good read on branding - http://www.amazon.co.uk/Lovemarks-Effect-Winning-Consumer-Revolution/dp/157687267X/ref=sr_1_2?ie=UTF8&qid=1437397249&sr=8-2&keywords=lovemarks http://www.amazon.co.uk/Lovemarks-Effect-Winning-Consumer-Re...
    - JupiterMoon 11y ago
      And that first requires reputation. I'm not giving your company my credit card number if I've never heard of it.
      - moron4hire 11y ago
        You should be able to get your first few sales without any brand identity, just based on the merits of your product. I expect the majority of people reading this site who actually have a project in the works are probably boot-strapping. There is no way they'll be able to spend on "building brand" before they start making sales. Whatever Facebook or Lexus or NHS or whomever does has no baring on us, we are fundamentally different beasts. Also, you're not sending me your credit card number, you're sending it to Stripe, or Amazon, or PayPal. Regardless, I think you severely overestimating how cautious people are with their credit card info.
        tankenmate 11y ago
        The bulk of the market are conscious of these issues; the "leading tail" of the market, the early adopters much less so. Obviously the "lagging tail" of the market won't buy without cash and without personally knowing the seller and inspecting the goods in person before buying. Branding however is for the rest of the market.
- justuk 11y ago
  Click fraud is the opposite of impression based advertising. Click fraud is when the bad guys encourage people to sign up for services or click on links that offer a sales based bounty and are rewarded for their actions. Impression based brand advertising is a different model to click based lead advertising. The former places all the risk and work on the adveriser, the later pushes it towards the publisher. If you run a website that's hugely popular and don't want to waste your resources on other business's ad campaigns then selling by impression is the only sensible option.
- maroonblazer 11y ago
  How can I buy a product or service I'm not even aware exists? That's the value of display advertising.
  - moron4hire 11y ago
    There are more ways to advertise than online.
  - dublinben 11y ago
    Do you only hear about good products from paid advertisements?
- exelius 11y ago
  No, but if you're a brand marketer, you need to be able to perform demand planning. If $(ad spend) > (impressions) * (conversion rate) * (price) then you do it. You can't get around counting impressions. But it's not important that impressions are accurate; just that they behave roughly like they have in the past. What the article is saying is that there's an upper limit on the amount of fraud that can be perpetrated without showing up in other metrics, and at current prices, brand marketers just don't care. Because brand marketers don't care about impressions; they care about P&L at the brand level. If a banner ad campaign drives top line brand revenue, that's all they need it to do.
jameshart 11y ago
But when you pay someone to put up a billboard, there isn't a risk that they'll put it by a road they think gets tons of traffic, but is actually just used by one guy being paid by the building owner to drive past it repeatedly.
- jaawn 11y ago
  ...and you also don't get thousands/millions of billboards put up for $500. This part of the comparison should probably be ignored as it is more to do with the intrinsic differences between the physical world and the digital "world" than it is with banner ads vs. billboards.

moron4hire 11y ago

This is really important. I really believe small-time projects have no business buying advertising online. It's just so incredibly low value that to scale it to meaningful results takes a lot more money than a person or small group of people bootstrapping their project on a shoestring can muster. For example: my wife has written a sci-fi novel. You can buy an eBook or paperback on Amazon. We would have to spend a few thousand dollars a month to acquire a single, purchasing reader. In contrast, I can drop around $100 on a booth at a book fair and sell 50 copies in about 8 hours. And we get almost all of those people to sign up for the mailing list (and almost all of them remember their email address well enough and have good enough handwriting to ensure it's a valid address). I don't get any chance to reconnect with my paying customers with just Amazon. No, I'm sure it doesn't scale as well, but we don't have anywhere near the money it would take to scale online advertising to even those low of sales numbers. But we have a large enough margin on the paperback (we're self publishing and print-on-demand has gotten pretty cheap) that we typically break even for the combined print/booth costs. Similarly, growing the mailing list for when we finish editing the next book (which will be any day now) has been a lot easier in-person. From the article: We use them to measure the efficacy of campaigns we run our way, using our metrics. We’ll spend a million bucks on a literal f**k ton of banners (I mean, just billions of the things, it’s crazy). And then we’ll do targeted brand sentiment and purchase- intent surveys using our internal peeps, online along with companies like Nielsen and Foresee, and offline with a bunch of (really quite awesome) companies you’ve never heard of. Then we’ll see whether the banners moved the needle, and if they did (and they often do), we’re happy. In other words, if you're not already successful, this article isn't for you.

gjm11 11y ago
I know it's terribly old-fashioned to take the word "literal" literally ... but I'm now trying to imagine what a "literal fuckton of banners" might actually be. It's pretty disturbing.
fweespeech 11y ago
As easy as it might be for some people to buy into your narrative, on HN, it realllllly isn't true. The basic statistics to calculate the RoI on a banner ad spend isn't particularly difficult when you have a software dev/web dev available. No matter how much click/impression fraud there is...you are trying to track conversions not clicks/impressions at that scale. If I know I spend $500 and get 10 sales, it isn't a statistically valid sample but its pretty clear if I break even on that $500...I should keep doing it since its essentially free marketing. Similarly, if I'm willing to eat $N per customer acquired via marketing, the same is true as long as $50/customer is equal to or less than my margin per sale + $N. "Sale" in this context is tracking what exactly those 10 people bought over the lifetime of them being a customer, generally. The only real thing the "already successful" people have is a bunch of smoke and mirrors that honestly doesn't have verifiable value that they use to bullshit clients. Conversion rate is literally the only statistic that is verifiable, cost effective to verify, and able to give you a concrete idea of whether or not the RoI of the campaign is worth it. We have an on staff statistician and his primary job is just automating the conversion rate calculations, the return-per-ad-campaign, etc. We spend enough money its worth hiring a staff statistician to do that but honestly any programmer with a book on statistics would 90% as good.