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What do we really know about the effectiveness of digital advertising?

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Re: What do we really know about the effectiveness of digital advertising?

#91

Post by munchbunny »

ngngngng wrote: post #8

> a Super Bowl ad cost three million dollars. Why? Because that’s how much it cost. What does it yield? Who knows. This article is awesome. In my free time I'm building an advertising platform that topic matches ads off the content of the web pages. No tracking of users. I'm hoping to allow people to host and run their own all inclusive self contained advertising platform for just a licensing fee. I also have a way t…

> I also have a way to beat adblockers that I'm afraid of bringing to light since I only want it tied to my own companies completely non tracking and ethical ads.

Beating ad blockers is not hard. Just serve them from the first party domain. If you’re not tracking users outside of whatever the first party tracks, you don’t need third party cookies either.

As a former ad tech guy though... I think the biggest hurdle you will run into is precisely the lack of tracking. It’s both problematic for privacy but also crucial for measuring ROI.

Re: What do we really know about the effectiveness of digital advertising?

#92

Post by jerkstate »

jasode wrote: post #12
moltensodium wrote: post #3

Maybe this is just a generational thing, but I still have never clicked on an ad. I hate ads. I don't know anyone who likes them. I don't know anyone who has intentionally clicked on them. I have literally never met anyone who places any value in advertising at all. Everyone hates it with 100% of their being. It is the garbage we all just sort of accept exposure to as some sort of fee for existing online. Who are all…

>I have literally never met anyone who places any value in advertising at all. Everyone hates it with 100% of their being. I like ads -- but only if they're relevant to my interests . There lies the problem: 99% of all ads are not relevant to my interests. For online ads, 99.99% of ads are not relevant to me. So, I use a DNS blocker to filter out ads.

The other problem is in order to figure out which ads are relevant to your interests, advertisers have to collect, store, and analyze tons and tons of data about you. Personally, I'd rather see ads that are not relevant to me.

Re: What do we really know about the effectiveness of digital advertising?

#94

Post by nitwit005 »

tguedes wrote: post #67
TekMol wrote: post #20

So 16 years ago it has been shown that advertising for your own brand name is worthless? Yet still in 2019, when I google for "Amazon" I see an Amazon ad? Color me skeptical. I doubt the marketing guys at the worlds biggest companies are that out of touch with reality. Would love to know why they do it though.

I think your answer is in your comment. Why would the digital marketing guys at Amazon say that their advertising doesn't work and their budget should be cut? They want a bigger budget with more responsibility, not less!

Unlike most companies, Amazon can easily track ad display or click to purchase. While they still can't establish causality (you might have bought it even without the ad), it's still fairly easy for them to calculate if the ads are worth it.

Re: What do we really know about the effectiveness of digital advertising?

#95

Post by marrone12 »

jessefrederik wrote: post #76
davidedicillo wrote: post #17

Overstated. This article assumes that: - All online advertising is Google search - That brand search advertising is representative of the entire industry There are plenty of companies making double-digit ROAS (return over ad spend), especially direct response advertisers.

Hi, I'm the author of the article, and I don't assume all online advertising is Google search. I also cite research on display advertising (meta-study of 432 display experiments on Google): https://www.ssrn.com/abstract=2701578 And on Facebook advertising: https://www.kellogg.northwestern.edu/faculty/gordon_b/files/... The problem with all online advertising is that there are huge selection effects, which are hard to…

There is a selection bias in these studies as well -- that you are focusing on large, already established brands that have good brand recall and people who had intent to purchase there anyways.

For smaller companies that are just starting out, it's relatively impossible to have prior intent when people don't know who you are or what you offer. There are a number of companies who started with nothing and grew their business via online ads and this seems like a giant blind spot in the article as well as the studies that you mentioned.

Re: What do we really know about the effectiveness of digital advertising?

#96

Post by etblg »

stvswn wrote: post #16
moltensodium wrote: post #3

Maybe this is just a generational thing, but I still have never clicked on an ad. I hate ads. I don't know anyone who likes them. I don't know anyone who has intentionally clicked on them. I have literally never met anyone who places any value in advertising at all. Everyone hates it with 100% of their being. It is the garbage we all just sort of accept exposure to as some sort of fee for existing online. Who are all…

But, you like accessing content for free, correct? That content doesn't exist and then ads are layered on, the context exists BECAUSE of ads. Like, no one would produce the content without the plan to make their money back via ads. This is how mass media has worked from the get-go. Radio stations were built by advertisers for the purpose of advertising. Entire genres of popular music wouldn't have happened otherwise.…

> But, you like accessing content for free, correct?

I'm really not sure about that anymore.

I pay for The Athletic, I was hesitant at first but now I really enjoy getting access to top quality sports articles with no ads and a nice clean experience.

I pay for Google Play Music (for however long that lasts) and I'm really happy I can just listen to music without needing to hear more fucking ads in my life.

I support a few Youtube channels on Patreon because the advertising money on Youtube isn't enough for them to cover their bills. At this point there's a good number of channels I would rather pitch a few dollars at each month than have to sit through ads (which are adblocked anyway, whoops) and have their content threatened by what Youtube determines advertisers care about.

I pay for Netflix and never have to watch ads (so far) while watching TV. Whenever I watch live TV it drives me crazy how many breaks they take to show me the same stupid commercials over and over again for stuff I will never buy.

You see it with online sports packages that don't have the rights to show TV feeds online -- so when it's time for commercials, it just switches over to a silent image saying "Commercial Break in Progress". I pay $20 a month for DAZN and I'm not sure how much longer I can stand watching the awful commercials that keep getting shown at every break.

I donate a small amount every once in a while to Wikimedia and in return we all get access to a free encyclopedia that stays eternally relevant without advertising.

We can live in a world where we pay for content and be happy. We can live in a world without advertising. It's really not that bad paying a little to get a much better experience.

Re: What do we really know about the effectiveness of digital advertising?

#97

Post by jklinger410 »

ngngngng wrote: post #8

> a Super Bowl ad cost three million dollars. Why? Because that’s how much it cost. What does it yield? Who knows. This article is awesome. In my free time I'm building an advertising platform that topic matches ads off the content of the web pages. No tracking of users. I'm hoping to allow people to host and run their own all inclusive self contained advertising platform for just a licensing fee. I also have a way t…

>advertising platform that topic matches ads off the content of the web pages

Is your unique prop breaking ad blockers? Because category/contextual advertising is not new.

Re: What do we really know about the effectiveness of digital advertising?

#98

Post by Normal_gaussian »

bostik wrote: post #65
ngngngng wrote: post #8

> a Super Bowl ad cost three million dollars. Why? Because that’s how much it cost. What does it yield? Who knows. This article is awesome. In my free time I'm building an advertising platform that topic matches ads off the content of the web pages. No tracking of users. I'm hoping to allow people to host and run their own all inclusive self contained advertising platform for just a licensing fee. I also have a way t…

> I also have a way to beat adblockers that I'm afraid of bringing to light Proxying ads through as first-party content? If you really are invested in making them work ethically, consider these ground rules: https://bostik.iki.fi/aivoituksia/random/no-stalking.html

I find, as a consumer, I disagree with the text only requirement.

Videos are certainly off limits as a nuisance. However images convey a lot of information very quickly, and can be visually "skipped" in a way text cannot.

When presented an ad for protein powder alongside my workout diets article, I want to see what it looks like. The presentation of the product is an important factor in whether or not I pursue it.

It has to be remembered that advertising is a three way relationship, and all three stand to gain (presuming no scam). This is more complex than financials - displaying an advert leads to a bi-directional association in the consumers mind between the entity being advertised and the entity advertising it. It is beneficial to advertise products that have Brand values similar to yours (or ones you want to appropriate).

In all cases it can benefit the user to be advertised to as a means of discovery.

Many of us forget (or do not realise) that there are (and historically were a lot more) "papers" proudly proclaiming themselves "advertisers". People willingly read pages of adverts in order to discover products and services.

Anyway. Keep the image, it's worth 1000 words.

Re: What do we really know about the effectiveness of digital advertising?

#99

Post by tacon »

This is a rather unimpressive article. Yes, brand advertising is a disaster, just like it has always been. But to say that all digital advertising has unknown ROI is ridiculous. Digital direct response advertising allows very accurate ROI calculations. (Admittedly, a lot of advertisers are not applying the tools to their advantage. They call that the "Google stupid tax". Ditto these days on Facebook.) And direct response advertising is nothing new. Mail order guys were cleaning up by running early (expensive!) experiments that showed if they were going to go out of business. Oddly enough, when you have skin in the game, you follow the money much more closely. Who knew? The fact that golf course brand advertising deals don't pay off is not news. They never have much.

The bad news for digital direct response advertising is that the platforms are starting to remove the knobs that actually let people determine and optimize their ROI. Google is in the process of actively removing ad functionality and data that has, historically, been crucial to ad profitability. Google claims their machine learning can see much more of the data available, so "trust us." Perry Marshall, Google ads guru, has recently held several webinars about "Why Google is Objectively Evil."[0] Not pretty.

[0] https://www.perrymarshall.com/60-second/gama-replay/

Re: What do we really know about the effectiveness of digital advertising?

#100

Post by jessefrederik »

tacon wrote: post #99

This is a rather unimpressive article. Yes, brand advertising is a disaster, just like it has always been. But to say that all digital advertising has unknown ROI is ridiculous. Digital direct response advertising allows very accurate ROI calculations. (Admittedly, a lot of advertisers are not applying the tools to their advantage. They call that the "Google stupid tax". Ditto these days on Facebook.) And direct resp…

Hi this is the author of the article. You're just making the exact mistake this article is about: you assume people who click on your ad and then buy something, bought something BECAUSE of your ad.

From the article: "Suppose Luigi’s Pizzeria hires three teenagers to hand out coupons to passersby. After a few weeks of flyering, one of the three turns out to be a marketing genius. Customers keep showing up with coupons distributed by this particular kid. The other two can’t make any sense of it: how does he do it? When they ask him, he explains: "I stand in the waiting area of the pizzeria."

It’s plain to see that junior’s no marketing whiz. Pizzerias do not attract more customers by giving coupons to people already planning to order a quattro stagioni five minutes from now."

It's the same in online marketing, you often target people who are searching for say a pair of shoes. People who are searching for shoes have way higher baseline probabilities of ending up buying a pair of Nikes, whether you show them a Nike ad or not. So if you do not correct for this 'selection bias', you have no idea what your ad did.

The research I describe in the article clearly shows (and please look it up yourself, the links are all there) that selection bias is HUGE, and that it's hard to know ROI, because true advertising effects are tiny if you measure them in an experiment.

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