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Related article posted earlier today: https://news.ycombinator.com/item?id=25620707 It mentions that other big companies, such as P&G and Chase, also noticed that cutting ad spending had no result on their business outcomes.
Yeah I think Google and other advertisers are great at predicting what people will buy and then shows them ads for it. That’s different than showing a person an ad and changing their behavior, but to advertisers they can’t know unless they experiment.
> Yeah I think Google and other advertisers are great at predicting what people will buy and then shows them ads for it. Seems to be entirely subjective. I bought a new blade for a bread cutting machine on amazon, the last one lasted ~25 years. My current recommendations: blades for bread cutting machines. I also checked some Christmas decorations on Amazon, but didn't buy any. So next to the blades I get Christmas d…
But besides doing something like "purchases >$100 are not likely to be repeat purchases," I would think it would be difficult.
You can A/B test ads pretty easily, and this is quite common. With some degree of statistical certainty, you can tell how one ad performs to another. You don't have control over your SEO results as well - but you can also measure against SEO traffic with a high degree of certainty. All big companies do this. Sure, you're never going to know exactly how many people you advertised to would have organically, eventually…
> Sure, you're never going to know exactly how many people you advertised to would have organically, eventually found your product and bought it. But that honestly doesn't seem that important compared to the other metrics... Wait, why wouldn't that be important? It seems like the most important question since it asks whether advertising has any significant impact at all.
But it's also critically important for both adtech companies and data scientists who work in the space to direct people's attention away from those sorts of metrics. You generally don't want to call the attention of the person who signs your paycheck toward the fact that it's all but impossible to really know for sure if your service has delivered them any net benefit.
That's what happen when you have too much money to spend and you don't take time to evaluate if money is well spent.
I have this suspicion that mobile ads have way weaker effect than claimed. No-one in adtech has any interest in finding out. Marketers don't want to lose budgets or importance either. So a lot of money is wasted on annoying people. How sad.
CEO: "We need to do something about growth!"
Marketer: "Mobile ads are something!"
CEO: "I read those are hot. Here's a bucket of money! Do lots of something so we have lots of growth!"
[spending ensues]
As the Uber story shows, a lot of money gets spent without anybody making sure that it actually works. The actual goal is not to have an effect. It's to be seen as taking bold action. If the business gets better, bonuses and promotions ensue, no matter what the actual cause. Cargo cult management.
It sounds insane, but I'm sure it's rife. Years ago I was coaching at a Lean Startup weekend class. One team really killed it, rapidly testing product hypotheses through real-world testing. Their initial idea was quickly proven worthless, but they listened to users and came up with an idea that would sell.
I kept in touch with one of those team members. He went back to his prominent, well-funded startup, excited to improve his company. But nobody wanted improvement. Execs wanted to sit in a big room, think big thoughts, and produce specs. The engineers were to implement those specs. But nobody would measure the effects of anything. Proof that a grand poobah's idea didn't actually pan out was deeply unwelcome. It slowly drove my pal mad and he quit. The company bumped along for a few years to a modest acquisition, but it never really lived up to the hopes.
There was a freakonomics podcast recently about advertising (online and traditional). No one can actually prove it has any ROI at all. No one is willing to run the experiments necessary. In the few cases of natural experiments, where ads got turned off for some people by accident, there was no change in buying behavior. https://freakonomics.com/podcast/advertising-part-1/ https://freakonomics.com/podcast/advertising-…
There is so much money at stake that could be either saved or generated, its simply not possible that no one has looked at it. I used to help Pepsi/Fritolay set up tracking to tie advertising on youtube to in-store sales. They spent millions of dollars to measure their ads, Google had a clean-room data center specifically for pepsi/frito. The idea that no one actually checked if this system works is simply not possible.
How were the ads "slipping thru"?
[1] https://www.marketingtodaypodcast.com/194-historic-ad-fraud-...