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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?

#221

Post by c_r_w »

jessefrederik wrote: post #100
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…

Does this apply to mobile app install ads? I just don't see how those products are accessible to consumers in the same way without the awareness driven by highly targeted, experimental ad campaigns. I'm thinking King.com or Supercell type companies.

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

#222

Post by viraptor »

MichaelBurjack wrote: post #217
viraptor wrote: post #191

Earlier quoted context omitted.

How do you separate "people who haven't seen an ad" into a group in Google analytics? I don't believe "organic" source does that, because that means they weren't targeted by the ad in the first place, creating a bias.

Advertisers have many tools to measure "ghost ads" aka "people who haven't seen an ad but would otherwise have qualified for all your target criteria". See https://papers.ssrn.com/sol3/papers.cfm?abstract_id=2620078 as an example.

That's of course possible to measure in theory. I meant it as a response to "Facebook, Google and others make these tests possible in their platforms" since I haven't seen it exposed as an explicit option on either.

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

#223

Post by retsibsi »

DoctorOetker wrote: post #194
zwaps wrote: post #122

Earlier quoted context omitted.

Really not that easy, except if you can everything the same, aka go back in time. Otherwise, causal inference is sadly not easy.

thats why seller should modulate buying ads with a random stream of bits, such that the impulse response (of linearized approximation in tangent space for sales / advertising dollar) can be estimated. of course if the advertisement platform is simultaneously a dominant search engine, they can simply choose to directly modulate your discoverability through the search engine, in which case it is closer to extortion as…

> seller should modulate buying ads with a random stream of bits, such that the impulse response (of linearized approximation in tangent space for sales / advertising dollar) can be estimated

Could you unpack this a bit? (I'm not making a point or anything, just confused and curious and not sure that googling would help me understand.)

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

#224

Post by MichaelBurjack »

viraptor wrote: post #222
MichaelBurjack wrote: post #217

Earlier quoted context omitted.

Advertisers have many tools to measure "ghost ads" aka "people who haven't seen an ad but would otherwise have qualified for all your target criteria". See https://papers.ssrn.com/sol3/papers.cfm?abstract_id=2620078 as an example.

That's of course possible to measure in theory. I meant it as a response to "Facebook, Google and others make these tests possible in their platforms" since I haven't seen it exposed as an explicit option on either.

Then you haven't been talking to the right ad sales teams. Google and Facebook have entire product options built around this specific concept. You can run a "ghost ads" test on Google for as little as $20k in ad spend; it's relatively accessible even for smaller players.

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

#225

Post by buboard »

vmurthy wrote: post #219

Somewhere near the very bottom of the article is this gem. Emphasis mine. "And it wasn't because it was working for them. ... But there was one group of advertisers with a valid reason to purchase own brand name ads. Not that they were any more effective for this group, but because their competitors were "crowding them out" by buying ads that targeted the brand owner's name (so you search for "Bestbuy" but a sponsore…

this mostly works because google stopped marking their search ads with a different background color and made the search page entirely confusing so you don't know what s an organic search result anymore

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

#226

Post by [deleted] »

buboard wrote: post #127

Great to see an article like this. This subject is almost suspiciously under-researched by journalists. There 's definitely something rotten in the promises that internet advertising has become somehow more effective. If that were true, wouldn't businesses notice? Wouldn't they spend a bigger part of their revenue on ads ? Wouldn't that return even bigger ROIs? Yet businesses spend roughly the same for over a century…

[deleted]

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

#227

Post by buboard »

harry8 wrote: post #169

I wonder how much under-the-radar advertising happens here. Good karma user: meaningful context to the thread "But now I just use $product" Immediate response: "Yeah $product is amazing - but here's something related and a different to the gist" The whole thing is an aside but it's in context and make sense in the flow. That kind of advertising is massively more effective than a google/facebrick ad.

i notice that with a lot of comments about cloud-related services. While effective it's also limited to a few niches

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

#228

Post by m463 »

Some advertising works on me, and might be self-selecting.

The "thing x added to cart" on amazon, showing lots of similar things, and related things. At that point, I have capitulated on many occasions.

It's like giving a coupon for a drink in the pizza waiting area. (Or in some cases, showing me there's a better pizza)

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

#229

Post by Razengan »

How many people here have purchased something solely because they saw an advertisement for it, or how many people do you know who have done that?

I can't recall myself ever seeing an ad for something I did not already know of and then spending money on it.

Whenever I have found something that I didn't already know and then purchased it, it has been because of word-of-mouth (including online comments), reviews or recommendations/features on digital stores like Steam, GOG, App Store etc.

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

#230

Post by tomrod »

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.

As the other commentator identified, you work @ FB -- could you please provide the following three scatter plots to support or disprove your claims?:

(1) Size of Company vs. ROA

(2) Advertising Expenditure by Company vs. ROA

(3) [Advert %] vs. ROA

I hypothesize you'll see a rapidly decreasing return on advertising due to size, and would love to be proven wrong.

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