I used the exact title from the article and someone changed it. (I did forget to include the date. That was a mistake and thank you to whomever fixed it.)
The new dot com bubble is online advertising (2019)
121–130 of 176 posts
Re: The new dot com bubble is online advertising (2019)
#122I 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…
Not providing proof and just anecdotal experiences won’t do your argument any good. Especially because that’s exactly how Ad companies/agencies got here in the first place, by saying it works without clear, verifiable ways to prove it: “yeah, it works, trust us, but we won’t let you see the data”
Re: The new dot com bubble is online advertising (2019)
#123Earlier 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…
>What matters is incremental ROAS - not the conversions following exposure, but rather the conversions that would not have happened but for the exposure. [...] there's no untouched part of the market that's never seen a Coke ad against which you can do an A/B test. Sophisticated advertisers like Coca-Cola are aware of the concept about incremental ROAS . They can't do the exact A/B test scenario of isolated consumers…
> Recently, a lot of advertisers (e.g. Proctor & Gamble) quit spending ad dollars on 2nd and 3rd-tier ad exchanges because their A/B measurements showed they were a waste of money.
Can you share a link? I work in digital marketing and would be super interested in more info on this.
Re: The new dot com bubble is online advertising (2019)
#124There are two different assertions that should be distinguished:
1) most online advertising doesn't work
2) the revenue from online advertising will soon decline, perhaps precipitously
I believe (1), but not (2), hence it isn't a "bubble". If you tell a CEO "hey, you're not going to be able to solve your problem with advertising", then you are in effect telling them, "there's no easy solution to your problem, you must do the much harder work of making your goods or services better".
Not many CEO's will want to hear that. They will continue, I think, to spend money on advertising, including online advertising, not because it works well (it only occasionally does), but because it's easier. It's like selling someone a diet aid that says they can lose 50 pounds without having to work hard. Regardless of whether it works or not, people want to believe it does, so they will keep buying.
Re: The new dot com bubble is online advertising (2019)
#125Earlier 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…
You can run that same study with a control group, and sophisticated advertisers do. Show some of the users ads for your product, and other users ads for something unrelated, and compare their purchases of your product.
Re: The new dot com bubble is online advertising (2019)
#126If I had had a needle that would pop the dot com bubble, I'd hesitate before using it. Maybe there are cool things that were brewing and they just need a bit more time to incubate before we can benefit from them.
If I had a needle that would pop this bubble, I'd use it immediately. Advertising is all about making people do things that, when left to their own devices, they don't want to go. Whatever survives this bubble may need to be hunted down and exterminated.
Re: The new dot com bubble is online advertising (2019)
#127Earlier 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…
The stock price of facebook is just weirdly undervalued.
There's significant risks from possible regulation, anti-trust measures and such.
Re: The new dot com bubble is online advertising (2019)
#128Earlier 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…
The automobile analogy brings up another benefit of advertising. Items that are sold as socioeconomic status proxies don’t work unless everybody knows the brand.
It’s not just that Volvo wants me to think I drive a safe wagon that is a sensible choice for middle-class, educated people who watch public television.
I want my neighbours to think these things about me even though they drive Ford and GM. That advertising assures me I’ll get both a car and a cachet.
If Volvo had a way of only selling to people who want Volvo cars for the utility, but few others would have heard of the brand, it would have less value.
Re: The new dot com bubble is online advertising (2019)
#129Earlier quoted context omitted.
90%+ of relevant traffic is mobile 95%+ of mobile traffic is native Don’t delude yourself
I'm sure 99% of Apple users would be happy with a popup on first use of Safari that asked "would you like to block adverts?". It would be no skin off Apple's nose.
Their app ecosystem would implode as nobody would develop or maintain their ad supported apps anymore.
Re: The new dot com bubble is online advertising (2019)
#130Earlier quoted context omitted.
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.
> It also breaks down if users have disabled tracking.
Almost all users who disable tracking also block ads, so you are still correctly measuring the effect of your ad spend.