This is just one company. I worked for a big mobile games company, and their main complaint was how expensive where ads nowadays. They used to pump millions and get as many players as they wanted. Now you need to take a lot of care on how you spend your money, as the return of investment is not guaranteed if you pay too much.
If other companies follow suit, then we can talk about a more general issue. Maybe it is just that their campaigns were ineffective because were not good, or because their target users are not reached on digital ads.
Both Google and Facebook work on "tech that directly impacts lives and how a person's day flows". So far producing more value than Uber has, but Uber provides a valuable service too. And while Google & Facebook's revenue is primarily from their ad business, they're not ad companies, like, say, Rubicon Project.
How are they not ad companies? Together, FB and GOOGL receive a massive proportion of online ad spend.
A thought experiment: suppose my company makes and sells shoes. We're a shoe company, right? Then one day some soda company calls us and says they'll give us money (a generous $10 a pair, our pairs sell for $100, cost $90, hello double profit) if we put their logo on the tongues. Sure, we try it out, shoe sales don't seem negatively affected (they're great shoes) so we keep it and keep taking money for the ad. Basically one guy at our factory coordinates with the soda company to make sure we're paid, and makes sure we have logo supplies and that each tongue has a logo on it, but the rest of us are just focusing on making and selling shoes. Are we still a shoe company? I think yes. What if for every logo'd $100 pair of shoes we sell the soda company pays us $50? $100? What about $200, much more than the cost of the shoe for their ad, such that we start giving away the shoes for free? Still a shoe company then? I still think yes.
>well no one can say. // P&G must have the most and best data on the planet. By now they can probably say with a pretty high confidence interval.
That's not a real argument though. Just assuming that they have a magical way to solve attribution for traditional ads because they're a bit corporation. If they did have that, they could just use the same tools on digital and report fake clicks and bots to Facebook and Google to get reimbursed. (Google at least refunds all impressions and clicks that were later detected as being fraudulent)
The sort of data they have would macro-, that's not telling you if any particular click is fake.
How are they not ad companies? Together, FB and GOOGL receive a massive proportion of online ad spend.
They are tech companies not ad companies. It just happens that Google and Facebook draw most of their revenue from being middlemen in the advertising industry, the same way Uber is a middleman in the transportation industry -- Uber doesn't have the fixed costs that you'd expect a large cab company to have.
All companies are tech companies in this day and age, it's a meaningless classifier. But not all companies recieve most of thier money from advertising and selling personal information, which makes ad company relevant classifier.
I have to admit that at a deeper lever I'd love if advertisers get the fuck off of the web. I don't have a problem with advertising per se but the way it's used today hurts the medium in so many ways. Sites are bloated with ads, journalism is riffled with native advertising articles, malware is mainly spread through infected ads and on top of that we have a legion of companies out there which are collecting every kin…
The good thing about Google's cost-combative platforms like Adwords and DoubleClick is it prices the lowest rung of spammers out of the market. Multinationals leaving these platforms means the price drops down. This not only means more illegitimate entities can afford to compete, but that publishers need more of them, in more places, just to stay afloat on the same income. You could argue that this is falling apart b…
The trouble is: given how much of the web relies on advertising, how would things fare once ads are gone?
When i use Google news , there's so much waste in web journalism: a million journalists rewriting the same article, and often a useless and low quality article, at that. So maybe there's a better way.
I agree. It’s really old fashioned supply and demand. When the price drops below the price of providing something, you get a shortage. We need a shortage of some of the nonsense that passes for “news” these days!
In the heyday of the wires, Reuters, AP and to a lesser extent UPI and AFP were the syndicated news sources of choice – now every “digital marketing” intern from here to Jakarta suddenly is their own “wire” service. I am all for diverse reporting, but the same story written 800 different ways at a quality approaching trained monkeys on typewriters – I’m kind of over it.
A couple of things going on at once - it's hard for old guard companies to compete in digital marketing because consumers are being trained to buy based on reviews, price, and delivery times more than brand. And when you're spending $100M/quarter over a dozen brands all digital marketing is going to be brand marketing. It also raises a question about conversion being a lagging indicator here. It's possible after a fe…
> It also raises a question about conversion being a lagging indicator here. It's possible after a few more months of lower spend they will start to see consumers pulling back. Why would online lag be different from other media? It's unlikely consumers drop everything and stock up on Downy Fabric Softener after viewing the ad on TV or hearing a cheerful radio/podcast commercial.
The point is that old mass media ads are pretty much accepted as a bottomless pit with unclear outcome and that there is a whole industry specialising in independent result assessment.
Online ads promise perfect monitoring, but that is not only provided mostly by the advertisement channel provider itself (quite the opposite of independent) but also only useful for ads that aim for immediate reaction ("buy now!"), it does not tell anything about brand awareness effects.
I don't think that you are disagreeing with GP at all.
My algorithm for that kind of stuff is what is cheapest in the store I am in? I think that is what a lot of people do.
A lot of people love brands and pick the one they last remember - which is why advertising is so powerful. It maybe sound cheesy/irrational/unbelievable but it's true and there are 100s of billions in market value built on it.
There is even a hidden logic to picking a brand product: when I recognize a brand, chances are high that if I had read something scandalous about that brand in the past I would not fail to make the connection. Whereas when I am looking at a noname with a "brand" as recognizable as an IPv6 address, there is no way I could make the link between product and something bad I might have read about it in the past.
"It's famous, I would have heard about it if they were all duds"