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…
I get an even better deal, I see no ads on YouTube because I use uBlock Origin.
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…
Incremental ROAS is the right metric in theory, but very hard (or impossible) to measure in practice, in particular for the small businesses with smaller ad traffic. Hence the industry falls back on measurable proxies such as ROAS.
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…
The stock price of facebook is just weirdly undervalued.
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…
> And it’s not as if anyone is clicking Google search ads for Coca-Cola and ordering a 6-pack right there. This is the same problem that these companies have with TV advertising. Supermarkets already have a loyalty card program where you receive a small discount and in return you agree to receive targeted advertising based on your purchases. Why don't these loyalty programs add a clause saying that they may also shar…
Just some anecdata : AFAIK this is not allowed in The Netherlands. Retailers are not allowed to mine purchasing data on an individual level.
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…
You are not understanding the point. You cannot actually measure incremental ROAS with basic statistics and easy Google/FB tools, because you would need to know how much they would have spent WITHOUT being exposed to the ads.
You can run lift tests on Facebook which measure exactly that.
You can't measure it across multiple advertising platforms very effectively though.
One thing I don't get: if in the entire industry $273bn were spent on ads in a year, how come that one company which derives most of its revenue from ads, such as Alphabet has a market cap several times larger?
Market cap assumes that the company captures revenue over multiple years of its future existence. Therefore it could easily be more than one year ad spending, especially if it is assumed that year over year the spending would grow, and the company would continue to successfully exist over decades.
Annoyingly I feel like it's true. Personally I never had anything strongly against online advertising - there are tons of website and blogs where you can see that people have poured their hearts and souls into their work and the only thing they get in return are a few peanuts from ads. There's the case for trackers and cookies and whatnot but let's be realistic-the analysis and processing is done by a server in the dark corner of a datacenter, not an evil mastermind going through every website I've visited: no one is that interested in me or anyone else for that matter. Frankly I'd be flattered if someone showed that much interest into me but no... But at some point the over-saturation and overpopulation of certain species will cause cataclysms and I feel like we are close. While I stay away from all social media(I'm sure it's a similar story there), the thing that crossed my line was Google and more specifically Youtube. You open up a video, at which point you are already forced through two ads, one of which is unskippable, then you get to the "sponsored message" then another two ads if the video is slightly longer. If I wanted to watch TV, I'd watch TV. And this is what ultimately pushed me over the edge: Brave browser ftw and the hell with all that. And I see more and more people going that way for similar purposes. It's a question of time before enough people have had enough and ads become a financial burden to those who advertise online.
You are not understanding the point. You cannot actually measure incremental ROAS with basic statistics and easy Google/FB tools, because you would need to know how much they would have spent WITHOUT being exposed to the ads.
You can run lift tests on Facebook which measure exactly that. You can't measure it across multiple advertising platforms very effectively though.
I don't know what lift tests are. It should be easy enough to devise a tool for measuring incremental ROAS under the following assumptions: a) all purchases happen online; b) I have a complete history of ad impressions and ad clicks for each user who made a purchase
As you said yourself, b) breaks down for multiple platforms. It also breaks down if users have disabled tracking.
Annoyingly I feel like it's true. Personally I never had anything strongly against online advertising - there are tons of website and blogs where you can see that people have poured their hearts and souls into their work and the only thing they get in return are a few peanuts from ads. There's the case for trackers and cookies and whatnot but let's be realistic-the analysis and processing is done by a server in the d…
I pay for google music, or whatever the name is today, and I see no ads. Bandwidth, servers, the employees, etc. have a cost, so it is only natural that companies make money somehow, either through ads or by subscription.