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What if performance advertising is just an analytics scam?

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

#111

Post by aerosmile »

lifeisstillgood wrote: post #97
aerosmile wrote: post #77

There are so many holes in these arguments that you could drive a truck through it. Which is so infuriating, because a big part of my professional career consisted of watching all of Rand's SEO videos and really appreciating them. I really thought he was a genius. But then over the past few years, he started sharing more general views on entrepreneurship, and those takeaways just didn't really make much sense. Basica…

Incrementality studies: https://www.adroll.com/blog/marketing-analytics/beginners-gu... Interesting article 1. "industry" is moving away from last touch attribution (pretty much what Rand complains about) 2. "Incrementality strives to identify the causal event of a conversion," The way to identify the causal action seems to be : errr ... that's difficult

You linked to an article that offers no guidance on how to actually do it, which is more indicative of the article itself than of the methodology. One of the vendors in this space has a good amount of content on this topic, which you can find at the bottom of this page: https://www.measured.com/. Dislaimer: I have nothing to do with this vendor or the industry in general (apart from successfully spending money on performance channels).

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

#112

Post by aerosmile »

beervirus wrote: post #82
aerosmile wrote: post #77

There are so many holes in these arguments that you could drive a truck through it. Which is so infuriating, because a big part of my professional career consisted of watching all of Rand's SEO videos and really appreciating them. I really thought he was a genius. But then over the past few years, he started sharing more general views on entrepreneurship, and those takeaways just didn't really make much sense. Basica…

That was an awful lot of words. Too bad none of them had anything to do with what you think this article gets wrong.

It would have made the post even longer. But I corrected that in the child post. Hopefully that clarifies it.

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

#114

Post by majormajor »

finnh wrote: post #74
thomasahle wrote: post #62

Earlier quoted context omitted.

> 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. Isn't this just the usual problem with advertising? You have to do it because the other players are doing it. If nobody did it, it would still be the same cake to be shared. This case is more on the nose, but only because of some fairness…

> Isn't this just the usual problem with advertising? Not quite: OP's point is about searches that specifically include your brand name. The "usual problem" with advertising in the zero-sum sense you propose is for eyeballs in general (billboards etc). The google tax here is more invidious, being specifically about searches that include your brand.

I think it's the same problem even if it looks more suspect.

I think the important thing here is that companies don't decide to increase total advertising budget just because of the existence of a new channel. They have a budget of X. They have to decide how to break it up. Google, with brand targeting in search, is making a play for money that would've otherwise gone to Fox or ClearChannel or whoever. The brands redirect some budget to this new channel, as it shows its effectiveness.

Many of them still spend some on traditional channels, to get that first appeal and be the "Williams Sonoma" in "Williams Sonoma Cast Iron Skillet." Many of those people aren't just going to click through to Lodge ads instead. But less than they did when traditional channels were the only game in town.

Same dilemma, though:

If nobody advertised in Google Search or non-Google channels, people would just buy whatever skillets they found in whatever stores they found, or what their friends told them about.

If one brand advertised in offline media, more of those people would buy that brand.

So all brands advertise in offline media. And then it comes down to effectiveness of the campaigns + the same criteria that it would've otherwise - availability/placement, word of mouth, etc.

Then, if only one brand advertised in search targeting other brand names too, more of those people would buy that brand.

So all brands advertise on their brand keywords in search.

But ultimately it's the same game in both places. With the same net, Google just captures some spend that what would've gone to non-Google places previously.

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

#115

Post by missedthecue »

dhimes wrote: post #110
missedthecue wrote: post #42

I think performance advertising is a great idea if you don't rank very high in search results for your category. "Rental stays in XYZ city" will bring up an airbnb result all day, probably in the top five results. Therefore, paying $3 a click to be placed above your own search result is probably silly. I happen to have a small side project and advertise it with a very low budget on facebook, google, and bing. It work…

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

My side project isn't for sale or behind a paywall, so I'm not sure if they have their wallets out. But I know for certain that they're real and seem to be interested in my offering enough to click around and sometimes drop a message.

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

#116

Post by mc32 »

thomasahle wrote: post #62
mbesto wrote: post #18

Earlier quoted context omitted.

> 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…

> 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. Isn't this just the usual problem with advertising? You have to do it because the other players are doing it. If nobody did it, it would still be the same cake to be shared. This case is more on the nose, but only because of some fairness…

When people search Pepsi Cola they expect to get a link to Pepsi or information about it. They don’t expect to see Coca Cola or RC Cola, etc. now in this case Pepsi makes sure search isn’t polluted by paying Google good money to always be the top results for that term.

Now, if you searched on the generic ‘cola’ or ‘soda pop’ then yes you expect to see those who bid higher to be at the top and at the bottom those who bid nothing unless organically somehow they ended elsewhere.

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

#117

Post by drevil-v2 »

Puts wrote: post #57
mbesto wrote: post #18

Earlier quoted context omitted.

> 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…

Sometimes I click on Google ads just because I don't like a brand and feel a little bit of joy knowing I just cost them a dollar.

Way more than a dollar. If you really want to cost a company a pretty penny, click on the ad after searching for an "intent" to do something rather than the exact brand. Some of those Adwords cost many tens of dollars.

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

#118

Post by ameister14 »

colinmhayes wrote: post #13
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".

Yes, when you're doing general brand terms that's true, but when you have a specific product in mind that's no longer the case.

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

#119

Post by netcan »

People have a tendency to view advertising as ineffective on them. "I never click ads." Mostly this is true. Most ads people see don't make them do anything. People see a lot of ads though.

Meanwhile, it's a marketing cliche that "half the budget is wasted, but we don't know which." It's also true that google or FB provided analytics, using default settings often grossly overestimate ad effectiveness. All true. A journalist somewhere is writing a version of this article at any given time.

But... From the merchant's perspective, the existence-proofs for advertising's effectiveness are undeniable. Launch a site. No visitors. Advertise. Now there are visitors. People subscribed to something or bought something. The ROI may or may not work, but the principle isn't in question.

For a blank slate, newly launched business performance marketing is easy to measure precisely and you can have a reliable ROI. For BMW, GoPro or geico insurance... the world is more complex, ROIs are more theoretical and "half the budget is wasted, give or take 50%" applies.

The same was true for TV. A mattress store run ads with a crazy guy screaming "Sale!" and the next day a lot of mattresses get sold. The fact that ads made people come buy mattresses is trivially true, from the merchant's POV.

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

#120

Post by aerosmile »

mbesto wrote: post #84
aerosmile wrote: post #79

Earlier quoted context omitted.

I agree with the rant how Google introduced a tax that wouldn't have existed in a world without Google. And, technically speaking, it would have been possible for Google to not charge for that tax (but would you have done that in their shoes? It's not like their market share is suffering). But if you are implying that brands should not invest in on-brand search campaigns, then this is a really bad advice. It's a know…

> But if you are implying that brands should not invest in on-brand search campaigns, then this is a really bad advice. I'll be more explicit - you should test the difference. I usually recommend companies do a blackout month where they turn off all programmatic ads and then do a like-for-like comparison. To further emphasis my point before, I've seen ad ops agencies say "hey you've got an overall 15x ROAS" and then…

There are bad actors in every field. I would just be careful in using such anecdotes to distract from the overall message, which as you spelled it out in detail seems sound (with perhaps just a note that a 5X ROAS is not bad for most unbranded campaigns, but I get your point).
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