Hacker News Board Hacker News, browsed like a classic message board
Live data from Hacker News

The new dot com bubble is online advertising (2019)

thecorrespondent.com

Post reply on HN
Print view View original

31–40 of 176 posts

Re: The new dot com bubble is online advertising (2019)

#31

Post by missedthecue »

ashtonkem wrote: post #25
missedthecue wrote: post #6

Earlier quoted context omitted.

Funnily enough, the ad based tech companies have the most reasonable stock prices. Facebook and Google are massively profitable, still growing at double digit rates, and each have only mid twenties PE ratios (the same as Caterpillar Heavy Equipment, or electric utilities like ConEd and PG&E). Meanwhile there are companies out there like Lordstown Motors, Lucid, and Nikola, which have never sold a product but have bil…

Some EV brands are clearly frauds, but with Ford introducing its second EV next year, calling all of EVs a bubble is a huge leap.

I'm not saying EVs are useless, or vaporware. Maintaining the comparison here, you look back and can see that the internet was clearly incredibly valuable and impactful in essentially every describable way, but there was still a dotcom bubble full of egregious excess.

Re: The new dot com bubble is online advertising (2019)

#32

Post by sb057 »

In 2020, newspaper, radio, and magazine ad spending was $85 billion compared to all online ad spending (which is far more targeted and thus more valuable) at around $500 billion. Television advertising was around $193 billion. Unless we're in a generalized advertising bubble, I'd say online advertising is still in healthy territory

https://www.marketingcharts.com/advertising-trends/spending-...

Re: The new dot com bubble is online advertising (2019)

#33

Post by shostack »

GeneralMayhem wrote: post #19
avalys wrote: post #13

I remember reading this article back in 2019 when it was originally written. Unclear why it is being dusted off now when it is still just as wrong as it was then. Yes, it is probably hard for a large, well-known brand like eBay or Procter & Gamble or Coca-Cola to measure their return from online advertising. If Coca-Cola stopped all advertising for 1 week, would anything really change? Probably not. And it’s not as i…

To be fair, the point of the article is that ROAS is not a very good metric, and while most of the article is wrong in that it effectively calls all advertising worthless as a result, it's not wrong about that one methodological point. What matters is incremental ROAS - not the conversions following exposure, but rather the conversions that would not have happened but for the exposure. For small companies that have n…

TY. Incrementality is king. Measuring that as a marketer and advertiser is getting more challenging for a variety of reasons. The future, primarily for large brands, but increasingly accessible for smaller and smaller companies is in statistical analysis with properly controlled experiments.

It is the only path I've seen that can account for all the noise in the measurement ecosystem. And even then it is far from easy to do "right."

Re: The new dot com bubble is online advertising (2019)

#34

Post by Qi_ »

amusedcyclist wrote: post #8

I don't think you can build a new consumer facing business without advertising on facebook and google. A lot of the moden consumer internet was built by advertising on those platforms and diverting dollars away from brick and mortar. Some well known examples include Airbnb and all the kardashian family brands. Advertising metrics might be hard to measure for large well known companies, but for startups/ solo entrepre…

Digital advertising is much more accessible for the small fish too. If a business has a Facebook presence, $10/day can get a campaign going, and scaling it up is trivial.

Re: The new dot com bubble is online advertising (2019)

#35

Post by GeneralMayhem »

ashtonkem wrote: post #24
GeneralMayhem wrote: post #19

Earlier quoted context omitted.

To be fair, the point of the article is that ROAS is not a very good metric, and while most of the article is wrong in that it effectively calls all advertising worthless as a result, it's not wrong about that one methodological point. What matters is incremental ROAS - not the conversions following exposure, but rather the conversions that would not have happened but for the exposure. For small companies that have n…

It also doesn’t mean that the advertising is money wasted. Coke spends that money to remain the go to brand, and surely values being the cultural default very highly. Saying “Coke would still sell without ads” really misses the point for why Coke advertises. It reminds of car ads. Apparently (correct me if I’m wrong), but OEM ads aren’t about converting new customers, but they’re about trying to convert recent buyers…

I don't disagree with you. My point wasn't that Coke-style brand advertising was worthless, just that it's extremely difficult to measure without much longer experiments - specifically because it's been so successful.

Re: The new dot com bubble is online advertising (2019)

#36

Post by 2muchcoffeeman »

GeneralMayhem wrote: post #19
avalys wrote: post #13

I remember reading this article back in 2019 when it was originally written. Unclear why it is being dusted off now when it is still just as wrong as it was then. Yes, it is probably hard for a large, well-known brand like eBay or Procter & Gamble or Coca-Cola to measure their return from online advertising. If Coca-Cola stopped all advertising for 1 week, would anything really change? Probably not. And it’s not as i…

To be fair, the point of the article is that ROAS is not a very good metric, and while most of the article is wrong in that it effectively calls all advertising worthless as a result, it's not wrong about that one methodological point. What matters is incremental ROAS - not the conversions following exposure, but rather the conversions that would not have happened but for the exposure. For small companies that have n…

I assume there must be some effect in getting new drinkers.

I’ve tried lots of colas. I’m never buying a Pepsi if there is Coke. I will always buy soft drinks in this order: Cherry Coke, Cherry Dr Pepper, Dr Pepper, Coke, maybe I’ll just have water. At this point no amount of advertising will change my mind.

Re: The new dot com bubble is online advertising (2019)

#37

Post by NeoVeles »

kbrackbill wrote: post #4

This sounds great and I want to believe it, but it feels like another case of someone saying the sky is falling when it clearly hasn't. What will it take for this advertising bubble to pop? Is it even a bubble?

There is the book on this called 'Subprime Attention Crisis' by Tim Hwang that tries to argue this point.

It is only partially successful in its goals of saying the sky is falling.

The overall message I came away with was that online advertising has some serious issues that need addressing - but they aren't anything that cannot be solved.

If there is a bubble then I suspect it isn't anywhere near as big as it is made out to be and that any "crash" will be more of a slow correction than the bottom suddenly dropping out.

Re: The new dot com bubble is online advertising (2019)

#38

Post by 3np »

sb057 wrote: post #32

In 2020, newspaper, radio, and magazine ad spending was $85 billion compared to all online ad spending (which is far more targeted and thus more valuable) at around $500 billion. Television advertising was around $193 billion. Unless we're in a generalized advertising bubble, I'd say online advertising is still in healthy territory https://www.marketingcharts.com/advertising-trends/spending-...

Note that these are forecasted metrics specifically for the USA.

I wouldnt be surprised if they underestimate online ad spending - there may be a lot of $ going through channels and companies that are not included.

It’s not like they have insight into revenue of all ad companies even within the US, right?

How about sponsored YouTube/Instagram/TikTok/blogspam for example?

Re: The new dot com bubble is online advertising (2019)

#40

Post by cratermoon »

tofukid wrote: post #14
cratermoon wrote: post #12

Earlier quoted context omitted.

> revenue from ad referrals And exactly how do you get accurate figures for that?

It’s simple. You use a URL with the campaign id, and store that when the customer clicks through, then when a sale is made you count that towards the campaign. In offline advertising people would achieve this using campaign-specific phone numbers or discount code given in the ad. Online advertising math is not rocket science. If ROAS is positive you continue the campaign, if not you abandon it or try other methods.

Direct conversion to sale via clickthroughs are an almost invisibly small part of online ads . No advertiser uses only that metric for determining ROAS.
Post reply on HN