What if performance advertising is just an analytics scam?

People on this board love the idea that anyone who isn't an engineer is an idiot and everything that everyone else does that isn't writing code is somehow worthless. In broad strokes, they think that all people who do people-facing work are charlatans that are constantly trying to hide how worthless they are because talking to people, etc. can't possibly provide value. Then, they (like so), ask you to break down your arguments so they can pin the tail on the donkey that is the logical fallacy that they will use to discount your (almost certainly correct and informed) opinion.

Unsurprisingly, those people are wrong and marketing works.

- Brian's comments about Airbnb's approach to performance marketing are used to imply that Airbnb's lessons apply to other businesses. Very few businesses - especially those that start from small numbers and need to grow them - have 90% of their traffic mix come from repeat customers. Using Brian's comments helps fuel the narrative that brand marketing is a better investment than performance marketing, which is correct in some cases (Nike, Airbnb), and not in others (most startups). Also, as another member pointed out, Airbnb's performance marketing budget is still well over $200M/year, which no responsible/public company would spend if it wasn't returning a great ROAS. Finally, Airbnb is known for all sorts of marketing shenanigans in their early days, and they certainly can't take the credit for a pure brand play.

- Calling performance marketing platforms a scam (repeatedly, both in the title and in the narrative) doesn't explain how those same performance marketing platforms are carrying the majority of traffic acquisition in most of the B2C companies that went public this year (and practically all of the DTC ones). Calling into question the accuracy of measurement is one thing. Calling it a scam is wrong and designed to rank on HN rather than to be reflective of the true value of those platforms.

- As I pointed out in my original post, all you have to do is use incrementality studies and 98% of the criticism instantly goes away. Rand implies that you have to do your own studies (by eg, following Avinash Kaushik's methodology) which is 100% wrong - Facebook will do them for you if you reach a certain spend limit, or 3rd parties will as well with no spend limits. Also, from experience, this really becomes an issue once you spend meaningful amounts on two platforms at the same time. His rant on this subject has an iota of truth and a whole lot of sensationalism mixed together, and overall leads to wrong conslusions.

- He conflates "paid search" with "all performance marketing platforms", including "paid social." It would have been helpful to point out that the challenges with branded terms are entirely isolated to paid search and have nothing to do with paid social.

- My favorite sensationalist tactic: frame a strong accusation as a question. This way you get the clicks, but you can still cover your ass by linking to resources that with enough research would allow the reader to answer the question with a "No." But in lieu of that research, the implication is that the answer is a "Yes." You'll see this tactic used by less reputative media sources, and I was disappointed to see Rand do the same.

I could go on but hopefully this will suffice.

The article does have a point about attributed sales vs incremental sales - as a CFO (whether I qualify as the "hard-nosed" type in the article, I don't know), I'm bugged every time a marketing guy starts talking about how this campaign has been/will be "ROI-positive", and have had a few heated discussions on why this is mostly not demonstrable until you're willing to pull the plug (which you can do with more or less intelligence in order to minimize your risks).

On the other hand, while I do indeed believe that the "ROI" from Performance Advertising is something between just false and deliberately misleading, the bigger picture that I'm interested in is marketshare. Because when looking at market share, it's not a question of incrementality anymore, but whether you're growing slower/faster than your competitors, and your cost of doing that, and at what point you're OK to 'buy' marketshare, in the sense of losing money in the pursuit of growth, and how much. And then, OK, let's talk about ROI on that basis - most of the time, achieving this will indeed require tools from the Performance Adversiting toolbox, which allow you to conveniently track the amount of marketshare (i.e. sales) you bought.

There is absolutely nothing independently governing and monitoring whether performance is correct on ads. It's all done in private, and you're forced to compete against SEO and many other things to succeed on a daily and even minute-to-minute basis.

This is the real price of a constant threat to Net Neutrality, and allowing one monopolistic company to dominate mobile devices, web browsers, search results, and the largest video service on the entire Internet.

Their plan to corner and manipulate what everyone's freedom of choice and to secure their funnel of permanent revenue is considered cute to investors, but no one realizes how bad this will get in 5 more years.

Of course the numbers are fudged when you consider how they've turned analytics on their once very useful platform into a confusing mess, and when they announced that they were going to retire the system after it has killed off competition, because they can simply gather any analytical report they want privately from their web browser.

Public front-end statics are no longer trust worthy because they can be manipulated to drive platform revenue and engagement. The best and most accurate stats are provided only internally, to executive leadership that owns platforms.

Because we now use them for email, video views, browsing, phones, etc, they have key insight that can even be used for corporate espionage, your ideas can literally be beaten to market because your virtual assistant caught you mentioning keywords then reported you applying for your patent and corporate loan.

Most people have no idea about how bad this all can get. We'll find out soon enough though.

When ad revenue drops on platforms, the platforms simply reduce organic visibility which drives the need for regular ad spending for companies in order to remain visible on social platforms... AirBNB is riding a wave of prior popularity and name recognition, I guarantee they will go back to a certain point of obscurity at some point because they reduced their ad spend, and then be forced to promote heavily as they did once before.

It's all creates a new cycle of financial deception and manipulation on platforms. For very profitable companies, advertising is usually manageable, but for startups, for small business, and for independent creators, this practice is devastating financially, and fruitless on top of the financial loss of paying for promotion. These platforms also made promises to woo users based on free organic growth, which somehow conveniently disappeared due to covert and convenient EULA updates over time.

Do people coming from Google make a purchase? I've found that Google is for research— people are usually looking for free information.