301–310 of 933 posts
There is also one agent problem : manager status is linked to headcount or/and budget. As a head of marketing, you have no interested at all at reducing your ad budget, quite the opposite !
Earlier quoted context omitted.
I might be misunderstanding... but, negarive ROI? I.e, the more they spent on ads, the less sales they got? Feels like a missed something, as that sounds... counterintuivie. (Not in any way related to the ad industry so pardon my ignorance)
No. A negative ROI just implies that the ratio of benefit/cost is less than one. If I incur a cost/investment of $100 but it creates value of $200 then I have an ROI of 100%. If this same expenditure instead only produced $80 value then I would have -20% ROI as in the value I’m realizing from my investment is 20% less than the cost of the investment.
There is also one agent problem : manager status is linked to headcount or/and budget. As a head of marketing, you have no interested at all at reducing your ad budget, quite the opposite !
The solution to this problem is incrementality measurement at the channel level. Every time you scale with a recently onboarded vendor, measure baseline of ALL conversions happening on your app. If this baseline doesn't move, cut the vendor. I say scale and not launch because upon launh, there won't be a visible impact on the global conversions. To be able to spot this spike from baseline, pick a small market than "worldwide". For ex, pick "California", let the new vendor scale in California, and measure spike in California.
Earlier quoted context omitted.
I think the problem is that the overwhelming majority of digital ad formats just don’t work. Does anyone who works in digital ad tech genuinely believe that these formats work? I have been here for the last ten years and have come to believe they do not, certainly not comparable like traditional linear TV or print in their heydays. There are exceptions. I think Google search ad works so well it’s eating the product.…
Instagram ads for millenials are like flies to honey in my anecdotal experience. So many of my peers buy their furniture, dress shoes, clothing, water bottles, watches, dog leashes, pretty much everything in their lives from seeing some like-aged person use that thing on an instagram ad (and the product usually being pretty cheap). It blows my mind how successful these dime a dozen drop shipping companies based on in…
Especially with stay-at-home orders due to the pandemic, everyone (well, not everyone... but hyperbole) now has their own drop shipping brands operated out of their basements, all selling the same cheap products off of AliExpress. Will consumers catch on to what is going on? Do they even care?
Together with https://news.ycombinator.com/item?id=25623858 it might appear like there's a coordinated takedown of ad tech companies going on. Google derives 80% of its revenue from ads, Facebook 99%. Imagine these giants coming down if it turns out that online ads aren't effective? EDIT: Tweaked the wording regarding the alleged "coordinated takedown" as a reaction to a comment.
Exceptions:
- New products deserve some advertising. I would handle that like the patent system. Demonstrate your product is sufficiently different, and get access to some attention economy time slice.
Some may say, well what about competition with existing products to bring down cost? Simple, get rid of stupid https://en.wikipedia.org/wiki/Monopolistic_competition and start selling things in unmarked tubs with a price tag. Cheapest one wins. Of course, there has to be quality control and avoiding regulatory capture with that, but stupid brands are not a good solution to that problem.
When everyone advertises, it is back to the same status quo. And when everyone stops advertising it ends up being the same.
I really hope more companies would stop advertising or at least question the value they are getting out of those money pits. Ads created some of most horrible companies the world ever saw (Google, Facebook).
Because most advertising is not effective on a 1:1 basis. The clean, direct conversion funnel is in most industries and sectors a complete myth. Advertising is about awareness. All good marketing is long-term. Digital advertising has been sold (by overzealous marketers) as magical 1:1 sales machines. It is almost always not that. This is the hardest thing to convey to clients. Clients want a promise and a guarantee o…
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…
There’s no revenue change even after testing (when you tack on costs of ad delivery).