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The new dot com bubble is online advertising (2019)

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Re: The new dot com bubble is online advertising (2019)

#21

Post by glenstein »

rsync wrote: post #9

It's an idea that just won't die ... If we concatenate enough garbage: (subprime loans, training inputs, consumer information) then the result: (MBS tranches, AI, targeted ads) is somehow not garbage . This appears to be a wonderful model for separating gullible investors from their money so I suspect we'll keep seeing new incarnations of it ...

I think you are right, but the process you describe is so similar to the way we actually create value. Transforming or changing something from less into more. Normally we might call it work, or a patent.

Making garbage can look similar to doing work and making something of value in the right circumstances.

Re: The new dot com bubble is online advertising (2019)

#22

Post by Qi_ »

cratermoon wrote: post #12
tofukid wrote: post #11

What do we really know about the effectiveness of digital advertising? The effectiveness of online ads is easily measurable: Return on ad spend (ROAS) = (revenue from ad referrals) - (money spent on ads)

> revenue from ad referrals And exactly how do you get accurate figures for that?

Facebook for example has a “tracking pixel” script that can be included in your website to get detailed info about conversions from Facebook ads.

Re: The new dot com bubble is online advertising (2019)

#23

Post by klvino »

tofukid wrote: post #14
cratermoon wrote: post #12

Earlier quoted context omitted.

> revenue from ad referrals And exactly how do you get accurate figures for that?

It’s simple. You use a URL with the campaign id, and store that when the customer clicks through, then when a sale is made you count that towards the campaign. In offline advertising people would achieve this using campaign-specific phone numbers or discount code given in the ad. Online advertising math is not rocket science. If ROAS is positive you continue the campaign, if not you abandon it or try other methods.

Guess we'll skip branding and awareness campaigns, ignore all post-view purchases, not use cross-device or cross-channel attribution, and not look at attribution of offline conversion/visitation activity.

If the only thing you do is Search and Email Blasts, the query string on your URL might work okay.

Re: The new dot com bubble is online advertising (2019)

#24

Post by ashtonkem »

GeneralMayhem wrote: post #19
avalys wrote: post #13

I 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…

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 into lifetime buyers. It’s to build in the consumer the attitude of “we’re a Ford household”, not to convince a Chevy driver to buy Ford for the first time.

Re: The new dot com bubble is online advertising (2019)

#25

Post by ashtonkem »

missedthecue wrote: post #6
kbrackbill wrote: post #4

This sounds great and I want to believe it, but it feels like another case of someone saying the sky is falling when it clearly hasn't. What will it take for this advertising bubble to pop? Is it even a bubble?

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…

Some EV brands are clearly frauds, but with Ford introducing its second EV next year, calling all of EVs a bubble is a huge leap.

Re: The new dot com bubble is online advertising (2019)

#26

Post by fieldcny »

tofukid wrote: post #14
cratermoon wrote: post #12

Earlier quoted context omitted.

> revenue from ad referrals And exactly how do you get accurate figures for that?

It’s simple. You use a URL with the campaign id, and store that when the customer clicks through, then when a sale is made you count that towards the campaign. In offline advertising people would achieve this using campaign-specific phone numbers or discount code given in the ad. Online advertising math is not rocket science. If ROAS is positive you continue the campaign, if not you abandon it or try other methods.

Maybe if your business is simple and purchase cycle fast.

For the majority of companies that’s not the case.

There are other confounding factors, like the margin attached to that revenue.

Sometimes understanding the actual profitability of a sale can take years.

As others have said for big brands it can be incredibly hard to do real attribution.

Re: The new dot com bubble is online advertising (2019)

#27

Post by fieldcny »

Qi_ wrote: post #22
cratermoon wrote: post #12

Earlier quoted context omitted.

> revenue from ad referrals And exactly how do you get accurate figures for that?

Facebook for example has a “tracking pixel” script that can be included in your website to get detailed info about conversions from Facebook ads.

If it were really this easy people would be doing it, the world really is a complex place.

Re: The new dot com bubble is online advertising (2019)

#28

Post by systemvoltage »

I've always wanted to inquire the significance of advertising from the standpoint of the business, and yet its failure to please users. Advertising sucks from the standpoint of the user, and some say that if you want to scale any online business from 0 customers to N, advertising is pivotal and word of mouth won't do. Whether it comes in the flavor of give $10 to sign up a Paypal account, banner ads, search engine ads and these days also social ads (YT promotion, sleezy product reviews, IG celebrities) - it's important. So how come we have not solved the problem of user hostility in advertisement? Blendtec's "Will it blend?" series blends entertainment and advertisement. Engineers go to trade fairs and conferences voluntarily to seek out new suppliers/companies. People pay to go to Disneyland. Another genius in advertising is products/services that self advertise (Louis Vuitton). My gut feeling is that there is a deeper, more fundamental trade-off between advertisement effectiveness, and user hostility that always persists. Most of the time, we just adandon further inquiry and call it off as "It is the way it is because it damn well works".

Re: The new dot com bubble is online advertising (2019)

#29

Post by tcmart14 »

avalys wrote: post #13

I 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…

I think with a company like Coca-cola, it is a little bit of a different approach. Taking Coca-cola as the example. My money is their ads are not placed there to get you to buy a 6-pack online. It is so when you see it, you go, 'damn a coke actually sounds really good right now.' And then you proceed to walk tot he fridge for one or next time your out and about buy one. However I would say that a product such as coke is a specific case. Some ads are for targeting people to go to their online store, then I am sure ones like coke exist to put the idea in your mind next time you stop for gas.

Re: The new dot com bubble is online advertising (2019)

#30

Post by fdwrt »

GeneralMayhem wrote: post #19
avalys wrote: post #13

I 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…

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…

That’s why these companies invest so much in advertising. Market share is gained or lost in an instant.

If Coke switched off their advertising they would have gained this market share in recent years?

https://www.statista.com/statistics/225464/market-share-of-l...

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