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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?

#231

Post by charia »

komali2 wrote: post #198
user5994461 wrote: post #121

Earlier quoted context omitted.

Marketing departments are burning money like mad. It's google and other brokers that make a ton of money.

There's twitter and facebook ads in the san francisco bart system and I just don't fucking understand who in SF isn't aware of twitter and facebook or what they're about.

Are they just advertising the companies directly? There are cases where advertising even in a "saturated" area makes sense.

If FB feels like features like facebook marketplace or facebook dating are not reaching as big of an audience as they should, advertising to get the word out about those particular products the company offers is logical.

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

#232

Post by seem_2211 »

komali2 wrote: post #198
user5994461 wrote: post #121

Earlier quoted context omitted.

Marketing departments are burning money like mad. It's google and other brokers that make a ton of money.

There's twitter and facebook ads in the san francisco bart system and I just don't fucking understand who in SF isn't aware of twitter and facebook or what they're about.

There's a difference between performance and brand marketing. Bart advertising by Twitter/ Facebook is mostly brand marketing (not really tied to anything). A lot of marketing is about reminding you that a company exists.

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

#233

Post by vangar3 »

Razengan wrote: post #229

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 reco…

Me neither. However HN is an echo chamber of intelligent people who aren't going to sway their opinion or purchases based on ads. It's harder for me to visualize but the majority of people out there pay attention to ads and even will convince them to purchase.

When I go to the movies, people will laugh or agree at the most stupid ads. I don't think most people educate themselves or their children about not engaging in such content. It's why those morning shows that are really just ads in disguise are still airing today.

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

#235

Post by mrmrcoleman »

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…

I'm not sure if businesses spend roughly the same on advertising. I've experienced wildly different %'s of total spend depending on various factors.

Regarding the efficacy of online advertising, some businesses do notice but at the same time there's a larger question which is the trade-off between what online ads can achieve for different products at different stages.

Imagine a scale from "sitting in front of someone and explaining the value prop" to "an adwords ad."

If you're trying to remind someone about a brand they already know about, or attract them to a value prop that is easily explained online ads are great. If you have an unknown or hard to explain value prop you'd be better off starting elsewhere.

I agree that we need more research. Also, some suggested reading for anyone who's interested:

Traction: https://www.goodreads.com/book/show/22091581-traction (Good comparison of different marketing channels)

Scientific Advertising: https://www.goodreads.com/book/show/2621927-scientific-adver... (1923 book on measuring marketing)

Positioning: https://www.goodreads.com/book/show/760025.Positioning (First book to properly capture the ideas behind "brand marketing")

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

#236

Post by mrmrcoleman »

buboard wrote: post #186
josh2600 wrote: post #176

Earlier quoted context omitted.

https://techcrunch.com/2019/06/11/internet-trends-report-201... Please review page 22 to see that there has been a significant shift towards digital advertising since 2010.

i m talking about total advertising as a share of GDP[1]. The shift to digital is naturally following the eyeballs of users. Google's profits rocket while others' fall. The question is, did this shift drive increased consumer spending ? https://www.researchgate.net/profile/Rachel_Soloveichik/publ...

That's a fair question, thanks for the link.

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

#237

Post by newtothebay »

viraptor wrote: post #191
kposehn wrote: post #179

Earlier quoted context omitted.

Reliably someone comes along every few months to question digital ads. I always come back to analyses of incrementality as the real proof. Take an audience of X people. Divide them in two. Show ads to your test group, don't show to control. Watch your business grow and gauge the lift between the two audiences. The companies that know how to advertise at scale do this constantly and can gauge the real effect of their…

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.

Facebook has this exactly this tool, aka Conversion / Brand Lift [1]. It's a real experimentation system, not a "simulated" one like Google's Ghost Ad.

[1] https://www.facebook.com/business/help/688346554927374

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

#238

Post by perl4ever »

nostrademons wrote: post #166
jessefrederik wrote: post #100

Earlier quoted context omitted.

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…

If you're using your digital marketing tools correctly you're already correcting for this. Instead of measuring how many people click on ads, measure how many people click on ads and then compare it to how many people click on organic results to the same query . Or run ablation experiments where you stop running the ads and see what that does to your clicks & conversions. If you were making $X + $Y with the ads and t…

Sure, so where the data showing that most people do this?

When I was younger, I would read over and over "don't do X" when reading about how to repair a car or write a program. And I would think, if this advice is everywhere, how could anyone miss it?

And then, over time, I learned that there is a whole culture of doing things wrong, in many areas.

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

#239

Post by perl4ever »

DataWorker wrote: post #199
nopriorarrests wrote: post #133

Earlier quoted context omitted.

Hey Jesse, I spent 6 years working in ad-tech, and I was researching the incrementality effect of ads, selection bias and stuff like that for last 3 years. I want to let you know that your article is good. Online advertising is not a bubble, but your article perfectly explains why it is much harder than it seems.

The thing about bubbles is that nobody knows they exist. So an insider such as yourself saying, “there is no bubble,” is actually strong evidence of said bubble. Necessary but not sufficient.

No, it's perfectly reasonable that everyone knows there is a bubble, but nobody knows when it will pop.

"Irrational exuberance" is a famous quote about the 90s stock market/internet bubble, and it was in 1996, when the party was just getting started.

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

#240

Post by graeme »

jessefrederik wrote: post #117
graeme wrote: post #112

Earlier quoted context omitted.

This only applies if the advertiser could be better expected to get most of the business from those searches. If someone searches "nike shoes" they might well get them on someone else's site. Whereas someone in the pizzeria is already buying at the pizzeria. I agree it's important to measure, but I think your concern is overblown for most companies and most non-branded searches. Assuming those companies are measuring…

This is an empirical question. I suggest you read the research I cite. For Facebook: https://www.kellogg.northwestern.edu/faculty/gordon_b/files/... For display ads: https://www.aeaweb.org/conference/2014/retrieve.php?pdfid=98... For search: https://pubsonline.informs.org/doi/10.1287/mksc.2017.1065 The problem is: yes, there's only a tiny chance somebody who searches 'nike shoes' ends up in your store. But the probab…

Just did. One study is about brand keywords, which massively heighten the risk for what you're talking about. (I specifically excluded them in my earlier comment)

Another study is about display ads, paid for per impression. The study gives an average figure of 0.02. These are also not the typical successful google or facebook ad campaign, and are more akin to old tv ads.

The 66 page FB study isn't clear, but it also seems to be talking about ads paid for per impression? This is not what people talk about when they say you can easily track online ad returns.

Ppc ads are easy to track. You send a user to a special landing page, and you know exactly when someone got there via an ad, as only people who clicked ads go to those pages.

That said, a lot of advertisers don't do this, so they'll definitely have very real measurement problems.

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