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Google: End of the Online Advertising Bubble

kalkis-research.com

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Re: Google: End of the Online Advertising Bubble

#101

Post by fish44 »

red_admiral wrote: post #15

"Facebook on the other hand, has a better control of who is actually seeing its ads, and will benefit from the turmoil by gaining market share." Did they pay you to write this? Google ads in search will always be valuable because you can advertise nail varnish to people who have just searched for "buy nail varnish". This is also about the millionth post I've read which assumes that companies simply throw money at adv…

I think he is naively talking about the display part of googles business - author forgot about adwords, adsense: which makes most of google's cash...

Re: Google: End of the Online Advertising Bubble

#102

Post by melvinmt »

austinsharp wrote: post #97
Yhippa wrote: post #77

Earlier quoted context omitted.

Facebook is trying to head that off by having app integrations in Messenger. The whole new bot craze too. Wonder if Google will jump on this train via Hangouts.

There have been rumors that Google is planning a new, entirely separate messaging service, with bot integrations etc. http://venturebeat.com/2015/12/22/google-is-reportedly-devel...

Brace yourselves, Google is launching something social again...

This is why I have mad respect for Zuckerberg. He's willing to place gigantic bets (Instagram/WhatsApp) when and where it matters.

Re: Google: End of the Online Advertising Bubble

#104

Post by Alex3917 »

tomblomfield wrote: post #87
Alex3917 wrote: post #79

Earlier quoted context omitted.

> If you spend a lot on an ad campaign for a product and your sales don't go up, you notice that and rethink your next campaign. Most people who spend money on ads just want to be seen as the kind of people who spend money on ads, or else they just want to make their boss happy in the short term by telling them that they bought ads on Facebook or whatever. The chain of accountability is very diffuse, and most results…

Citation needed. I know a dozen companies who spend significant ($1m+) a year on Google or Facebook ads and performance is tracked obsessively.

There are different kinds of ads though, e.g. check out Seth's post on this: http://sethgodin.typepad.com/seths_blog/2015/11/direct-marke...

I think it was the CEO at BMW who said that if he only showed you BMW advertising the day before you bought a car, they'd go out of business because no one would ever buy a BMW. The brand only works because they start showing you the ads when you're three years old, in hopes that you'll buy one when you're 35. And when they sponsor TED or whatever it's not because they think anyone there is going to go out and buy the car, it's to prove that they're a luxury brand by showing that they can afford to spend a lot of money on advertising that everyone knows isn't going to work.

If you look at brand vs direct response, you can see that it's roughly split among digital advertising.[1][2] But as Seth mentions a lot of people use direct marketing to try to do branding and so don't bother carefully measuring their funnel, and most non-digital advertising skews toward brand advertising because it's obviously harder (or impossible) to measure. And digital is less than a third of total advertising.

Also look at companies of the Uber/Handy sort, who spend huge on direct marketing purposely at a loss in hopes of later creating some sort of lock in through network effects. In that case it's part measuring and part gambling in a way that's not straightforward to classify.

[1] http://www.emarketer.com/Article/How-Much-Industries-Spendin...

[2] https://www.comscore.com/lat/Insights/Blog/On-Branding-Versu...

Re: Google: End of the Online Advertising Bubble

#105

Post by qaq »

geocar wrote: post #92
qaq wrote: post #85

Earlier quoted context omitted.

It's way less drastic in the context of ad network it means a % of users that reached the landing page and then completed signup deposited no less ten X money played Y rounds in the next 30 or whatever days. Still even 5% given the industry was considered decent so >20% is very good.

I don't know if you're trying to be confusing, but you're being confusing. You might try using plain language like, "For every dollar of advertising I spend, I generate two dollars of sales per year." Or adjust as needed. If you meant 200 sales out of 1000 ads, then that's very impressive, and as I said: I'd like to know more. However: If you meant 20 sales out of 100 visitors, then I'm not impressed. That means ther…

I have no intention of confusing you. I mean 20 "sales" out of 100 visitors. I was a tech lead for the partner network so have no skin in trying to impress anyone by results of external partners. To me a 20 year old dude making 50-60K per week is pretty impressive, I can't speak globally of what was the cost of traffic acquisition for all of them but for the guys I knew that was their net profit on +- 100K payouts.

Re: Google: End of the Online Advertising Bubble

#106

Post by ssharp »

tomblomfield wrote: post #87
Alex3917 wrote: post #79

Earlier quoted context omitted.

> If you spend a lot on an ad campaign for a product and your sales don't go up, you notice that and rethink your next campaign. Most people who spend money on ads just want to be seen as the kind of people who spend money on ads, or else they just want to make their boss happy in the short term by telling them that they bought ads on Facebook or whatever. The chain of accountability is very diffuse, and most results…

Citation needed. I know a dozen companies who spend significant ($1m+) a year on Google or Facebook ads and performance is tracked obsessively.

Yeah, I don't know too many companies spending more than paltry amounts of money ads who aren't closely monitoring performance. $1m+ is probably overstating the line at which most companies want to see performance by several multiples.

Re: Google: End of the Online Advertising Bubble

#107

Post by a_small_island »

onion2k wrote: post #41
red_admiral wrote: post #15

"Facebook on the other hand, has a better control of who is actually seeing its ads, and will benefit from the turmoil by gaining market share." Did they pay you to write this? Google ads in search will always be valuable because you can advertise nail varnish to people who have just searched for "buy nail varnish". This is also about the millionth post I've read which assumes that companies simply throw money at adv…

Google ads in search will always be valuable because you can advertise nail varnish to people who have just searched for "buy nail varnish". Google and Facebook both have the problem that their business model is predicated on having thousands of small advertisers bidding on ads. That's what they leverage to generate profit. In any market that's dominated by a single entity that smaller companies won't compete with fo…

>When the majority of people who want to buy nail varnish bypass search entirely and go straight to Amazon

Do you even do this? My guess is the majority will never do what you're setting out to believe. Strictly speaking of Amazon, they don't even have the best prices these days.

Re: Google: End of the Online Advertising Bubble

#109

Post by ChuckMcM »

Well I can't say I disagree :-)

The more damning thing are the statistics. One of the great things about advertising on the Internet is you get lots and lots of feedback on how much "work" your ad has done (nominally page views and clicks) and you can compare your sales before and after advertising to understand how valuable it is to you. But chart 6 (https://kalkis-research.com/imagecache/532f1ae2393a0502f601a...) is the bottom line. If advertising more doesn't get you more sales, then you won't use it. And that means Internet advertising has to change.

Re: Google: End of the Online Advertising Bubble

#110

Post by dialtone »

Udik wrote: post #60
ssharp wrote: post #51

Earlier quoted context omitted.

A few comments on this: 1) The company might be better off capping their impressions to you. 2) The company might be better off focusing on setting their remarketing pixels further down the funnel (unless you entered their funnel as part of the process). 3) How do you reasonably expect the company to treat you differently than they do actual leads? I'll assume the majority of traffic that goes to their website is int…

I don't understand why the job of figuring out how to place the ads best should be a concern of the company, instead of Google itself. Google knows basically everything about me, including where I work and what type of job I do, I'm surprised they can't do a better job at placing their customer's ads.

What Google knows about you, or Facebook for the matter or any other buyer, can be used for targeting and as user features in the ML model which is used to determine the price the buyer is willing to pay for a given impression in the auction.

Most advanced buyers with actual ML in their buying algorithms do this. But ML works in statistical averages on the behavior seen across all users visiting a particular site. At that point the buying process works by figuring out the expected value of a new impression and bids that value, the expected value depends on how the advertiser values clicks or conversions or impressions, so as long as the cost of the impression is lower than the marginal value an algorithm will continue to bid, and potentially win, because it's worth it.

And you can do all the A/B tests you want and you'll see that this is actually true, capping frequency. or choosing to not show an ad because the position on the site is not great, is not a good idea, the right process is to determine a price that, all things considered, is the maximum price (proxy for value and risk) you are willing to pay to be shown in that bad slot that adds marginal value for the advertiser, and marginal value is measured however the advertiser wants.

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