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

What if performance advertising is just an analytics scam?

sparktoro.com

Post reply on HN
Print view View original

11–20 of 369 posts

Re: What if performance advertising is just an analytics scam?

#11

Post by prox »

fourseventy wrote: post #8

It's well known that the self reported performance numbers from Google Ads and Facebook Ads are inflated, however those ad channels still do drive real value. I run an ecommerce marketing attribution company (ThoughtMetric) so I have first hand knowledge and data about this subject. The most common source of inflation in Google/FB self reported performance numbers is multiple ad channels taking credit for the same or…

One of the most vexing problems for me is how to calculate how much to spend. We had a year of double ad budget, but we didn’t see a corresponding rise in sells. Only 10%. We assumed we reached market saturation, but it still a lot of guesswork, even when meticulously diving into GA data.

Re: What if performance advertising is just an analytics scam?

#12

Post by Ozzie_osman »

(So I do think that performance advertising is partly a racket, but it can work really well if you know what you're doing).

One additional thing people don't call out is that a lot of the budgets spent on these platforms are "learning" budgets. Agencies play this card really well. They'll tell you, "oh, you need to increase your budget, and test all these different combinations of ads/targeting/landing pages/etc so that you can learn what works (or the AI behind the platform can learn what works)". And obviously, in "learning" mode, you're ignoring the ROI.

I've seen people spend substantial amounts of money in "learning mode", and the platforms are kind of incentivized to make the learning less efficient so it takes longer and more spend for you to get to ROI positive (or to learn that you will never get there).

Re: What if performance advertising is just an analytics scam?

#13

Post by colinmhayes »

simonsarris wrote: post #2

> Technically, when someone does a Google search for “Williams Sonoma Cast Iron Skillet,” they probably would have clicked on one of the first 10 organic results, EVERY ONE OF WHICH leads to their website. But, y’know what ol’ Billy Ma’s performance marketers couldn’t then do: prove their value to their bosses. > [picture of that search term and williams sonoma ads with shopping links] The main problem here is that i…

Freakonomics had an episode with an economist that worked with Ebay on ad buys. This sort of "buy ads on your own keywords" was shown to have zero impact on sales to the point that they cut completely stopped advertising when the search included "ebay".

Re: What if performance advertising is just an analytics scam?

#15

Post by mdoms »

simonsarris wrote: post #2

> Technically, when someone does a Google search for “Williams Sonoma Cast Iron Skillet,” they probably would have clicked on one of the first 10 organic results, EVERY ONE OF WHICH leads to their website. But, y’know what ol’ Billy Ma’s performance marketers couldn’t then do: prove their value to their bosses. > [picture of that search term and williams sonoma ads with shopping links] The main problem here is that i…

> if Williams Sonoma was not advertising on that search term, Lodge and Food52 etc etc would, and then those companies would be above the Williams Sonoma organic placements

And if they were not above organically they would simply buy the advertising space that William Sonoma purchased. It's one of the slimiest things Google does - allows competitors to purchase advertising space on a query specifically crafted to find a particular source. It's nothing more than a shakedown.

https://twitter.com/jasonfried/status/1168986962704982016

Re: What if performance advertising is just an analytics scam?

#16

Post by gotmedium »

MrBuddyCasino wrote: post #7
simonsarris wrote: post #2

> Technically, when someone does a Google search for “Williams Sonoma Cast Iron Skillet,” they probably would have clicked on one of the first 10 organic results, EVERY ONE OF WHICH leads to their website. But, y’know what ol’ Billy Ma’s performance marketers couldn’t then do: prove their value to their bosses. > [picture of that search term and williams sonoma ads with shopping links] The main problem here is that i…

> if Williams Sonoma was not advertising on that search term, Lodge and Food52 etc etc would If I as a customer am using such specific search terms, then I would assume that my intention is to find and possibly buy this specific product. The results of other brands might be annoying, but why should I click on them? The relevant results are still displayed on the first page.

I think there is an under-appreciated average search engine user in the comment:

People will typically write their intent on the search engine even when they could simply directly to the website.

Case in point: The top 10 bing searches are for websites, including FB, Google, Youtube [1]. This traffic is highly competitive and should (as in all competitive markets) be bid among competitors.

https://ahrefs.com/blog/top-bing-searches/

Re: What if performance advertising is just an analytics scam?

#17

Post by codetrotter »

MrBuddyCasino wrote: post #7
simonsarris wrote: post #2

> Technically, when someone does a Google search for “Williams Sonoma Cast Iron Skillet,” they probably would have clicked on one of the first 10 organic results, EVERY ONE OF WHICH leads to their website. But, y’know what ol’ Billy Ma’s performance marketers couldn’t then do: prove their value to their bosses. > [picture of that search term and williams sonoma ads with shopping links] The main problem here is that i…

> if Williams Sonoma was not advertising on that search term, Lodge and Food52 etc etc would If I as a customer am using such specific search terms, then I would assume that my intention is to find and possibly buy this specific product. The results of other brands might be annoying, but why should I click on them? The relevant results are still displayed on the first page.

For example if the customer was previously not familiar with Williams Sonoma but had seen an ad in the paper or on TV or on the subway etc, that caused them to search for Williams Sonoma cast iron skillet.

And beside that a lot of people routinely misclick or click on ads not understanding that they are ads even when they are marked as such.

Re: What if performance advertising is just an analytics scam?

#18

Post by mbesto »

simonsarris wrote: post #2

> Technically, when someone does a Google search for “Williams Sonoma Cast Iron Skillet,” they probably would have clicked on one of the first 10 organic results, EVERY ONE OF WHICH leads to their website. But, y’know what ol’ Billy Ma’s performance marketers couldn’t then do: prove their value to their bosses. > [picture of that search term and williams sonoma ads with shopping links] The main problem here is that i…

> The main problem here is that if Williams Sonoma was not advertising on that search term, Lodge and Food52 etc etc would, and then those companies would be above the Williams Sonoma organic placements.

This is what is known as "on brand" Search ads. I like to call these effectively the "Google Tax" because publishers/retailers are forced to pay Google for the traffic they would have already received had the ad not been there.

I've seen way too many companies look at their analytics and say "see we get 20x ROAS on on brand! why would we turn it off?!?". Because silly, people are already going to go to your site without you paying for the traffic. I wouldn't be surprised if 25% of Google's ad search revenues come from this.

Re: What if performance advertising is just an analytics scam?

#19

Post by earthboundkid »

dublinben wrote: post #6
simonsarris wrote: post #2

> Technically, when someone does a Google search for “Williams Sonoma Cast Iron Skillet,” they probably would have clicked on one of the first 10 organic results, EVERY ONE OF WHICH leads to their website. But, y’know what ol’ Billy Ma’s performance marketers couldn’t then do: prove their value to their bosses. > [picture of that search term and williams sonoma ads with shopping links] The main problem here is that i…

Defensive spending to protect otherwise organic traffic could also be called extortion.

Forget about the corporate POV for a second, as a user, if I'm searching for X, I probably want X in my results, no?

It's the fundamental contradiction in Google's search ads model. If Google delivers users the thing they want, ads by definition have to be things users don't want.

Re: What if performance advertising is just an analytics scam?

#20

Post by fabianhjr »

earthboundkid wrote: post #19
dublinben wrote: post #6

Earlier quoted context omitted.

Defensive spending to protect otherwise organic traffic could also be called extortion.

Forget about the corporate POV for a second, as a user, if I'm searching for X, I probably want X in my results, no? It's the fundamental contradiction in Google's search ads model. If Google delivers users the thing they want, ads by definition have to be things users don't want.

Advertisements are fundamentally not what search service users want regardless of searching for a specific brand or not. (Its what advertisers want others to want)
Post reply on HN