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

71–80 of 176 posts

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

#71

Post by erostrate »

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.

TFA spends a long time belaboring the point that this is not correct. Because many people who click on your URL would have bought the item anyway.

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

#72

Post by JohnJamesRambo »

missedthecue wrote: post #6
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?

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…

https://www.currentmarketvaluation.com/models/price-earnings...

I agree with some of what you are saying, but on a deeper level I don’t think a 25 PE ratio is particularly healthy so I’d say the real bubble is an everything bubble we are currently in. Facebook and Google have some of the lower PE ratios right now because they actually have earnings.

>The current S&P500 10-year P/E Ratio is 37.8. This is 91% above the modern-era market average of 19.6, putting the current P/E 2.3 standard deviations above the modern-era average.

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

#73

Post by durnygbur »

heurisko wrote: post #63

I have had the thought that there is something wrong, that I can access nearly any song of my choice on YouTube, with the small penalty of skipping an advert after 5 seconds. Many of the adverts aren't even for products I'm interested in. They're either get-rich-quick schemes, or repeat-ad-nauseum ads for software like Grammerly, which I will never use. If Google has some sort of complex picture about me, by invading…

> choice on YouTube, with the small penalty of skipping an advert after 5 seconds.

YouTube is now in the last stage, cashing out their popularity. Now it's 20 seconds unskippable ad, then ad skippable after 5 seconds, then video interrupted with an another ad. I basically download the video and watch it on my computer or shutdown the browser tab with youtube.

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

#74

Post by amelius »

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…

> You can easily tell which specific ad referred someone to your website, and how much money they spent once they got there.

This is how Google and other advertising companies leak data.

If I target an ad about Y to a group X, then I know that someone who clicked it is in X. For any Y.

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

#75

Post by GeneralMayhem »

namanyayg wrote: post #51
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…

The point you're talking about ROAS/incremental ROAS is quite moot actually. Every online ad tracks the user from the moment they click the ad to whatever events they make (e.g. add to cart, purchase, etc). So the measured ROAS is exactly for the users who'd come via the ad and not any others. I don't want to be offending but this is honestly a very basic point, of course one would only measure the Return On Ad Spend…

Yes, obviously ROAS is only computed over the people who saw the ad. That's not in question. The point is that knowing how many people saw the ad and then bought the product doesn't actually tell you how effective the ad was at improving your business.

Imagine a product, let's call it Oxygen, that every single person buys $10 worth of every month. It has 100% market penetration.

One day, Oxygen Corp decides to take out a $1M ad buy. They reach 1 million people, all of whom then go on to buy $10 of Oxygen, as measured by cross-site conversion tracking. $1M ad buy to move $10M of product - that's a whopping 10.0 ROAS. Must be the most effective ad campaign ever run, right?

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

#76

Post by WoahNoun »

gingerlime wrote: post #70
allendoerfer wrote: post #68

Earlier quoted context omitted.

Click-through rates will be very low. In most countries you cannot impersonate another company, so they cannot call themselves „eBay“ in the ad copy.

Did anything change there? I remember Basecamp’s Jason Fried complaining about it[0] but I wasn’t aware of any policy changes that prevent someone from bidding on their competitor’s names and essentially placing their brand ahead of yours when searching for your brand name… [0] https://fortune.com/2019/09/04/google-trolled-search-ads/

If your brand is a registered trademark, you can have google stop your competitors from referencing it in search ad copy.

https://support.google.com/adspolicy/answer/6118?hl=en

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

#77

Post by GeneralMayhem »

GhettoComputers wrote: post #53
popcube wrote: post #46

Earlier quoted context omitted.

I remember an experiment about coparing cola and psi, they found advertisement of cola was so successful that people saw a cola bottle will let them feel it more delicious. I assume they want to keep this advantage in internet era

Wouldn’t it be better just to have it as product placement rather than advertising? Warren Buffet makes it look great, 5 cans a day. With his longevity and investments he’s great for them.

Product placement is a subset of advertising, not a different thing.

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

#78

Post by kubanczyk »

heurisko wrote: post #63

I have had the thought that there is something wrong, that I can access nearly any song of my choice on YouTube, with the small penalty of skipping an advert after 5 seconds. Many of the adverts aren't even for products I'm interested in. They're either get-rich-quick schemes, or repeat-ad-nauseum ads for software like Grammerly, which I will never use. If Google has some sort of complex picture about me, by invading…

> skipping an advert after 5 seconds

YT ads are not shown on Firefox with a plugin such as uBlock Origin. Just in case you're one of today's lucky 10,000.

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

#79

Post by namanyayg »

GeneralMayhem wrote: post #75
namanyayg wrote: post #51

Earlier quoted context omitted.

The point you're talking about ROAS/incremental ROAS is quite moot actually. Every online ad tracks the user from the moment they click the ad to whatever events they make (e.g. add to cart, purchase, etc). So the measured ROAS is exactly for the users who'd come via the ad and not any others. I don't want to be offending but this is honestly a very basic point, of course one would only measure the Return On Ad Spend…

Yes, obviously ROAS is only computed over the people who saw the ad. That's not in question. The point is that knowing how many people saw the ad and then bought the product doesn't actually tell you how effective the ad was at improving your business. Imagine a product, let's call it Oxygen, that every single person buys $10 worth of every month. It has 100% market penetration. One day, Oxygen Corp decides to take o…

I see what you mean and stand corrected; I wasn't assuming the case where the product sells without advertising at all.

From a gut feeling I can say that the customer came from some result of previous advertising (as we're talking about products like sodas not life-essentials like oxygen), but I guess there's no way to know since those previous ads being tv/print ads were not tracked.

If we suddenly stopped all other forms of advertising and only used online ads, in 10-20 years each customer can be tracked exactly to what ad created the first impression about the brand and thus be more accurate (still excepting marketing like word of mouth though)

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

#80

Post by youngtaff »

WoahNoun wrote: post #76
gingerlime wrote: post #70

Earlier quoted context omitted.

Did anything change there? I remember Basecamp’s Jason Fried complaining about it[0] but I wasn’t aware of any policy changes that prevent someone from bidding on their competitor’s names and essentially placing their brand ahead of yours when searching for your brand name… [0] https://fortune.com/2019/09/04/google-trolled-search-ads/

If your brand is a registered trademark, you can have google stop your competitors from referencing it in search ad copy. https://support.google.com/adspolicy/answer/6118?hl=en

Bit that's only in copy…

You can't stop them using it for targeting, and that's how part of the ad extortion market works

- someone advertises against you brand as a keyword so now you have to advertise against it too… Google wins in revenue terms

- it's also the source of scams e.g. people advertising against searches for free public services on say gov.uk, but charging for the same thing

Post reply on HN