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What do we really know about the effectiveness of digital advertising?

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Re: What do we really know about the effectiveness of digital advertising?

#251

Post by MiroF »

kposehn wrote: post #179
josephjrobison wrote: post #170

A very easy way to break this argument is to not look at huge known companies like eBay and Amazon, but brand new companies 1-2 years old that have grown almost entirely by online ads. Eventually word of mouth kicks in, but there are plenty of smart operators that built their entire brand and revenue off of ads. Works best in online direct to consumer brands.

Reliably someone comes along every few months to question digital ads. I always come back to analyses of incrementality as the real proof. Take an audience of X people. Divide them in two. Show ads to your test group, don't show to control. Watch your business grow and gauge the lift between the two audiences. The companies that know how to advertise at scale do this constantly and can gauge the real effect of their…

Isn't that literally the test described by FB economists in the article that showed that selection effect was 10x the impact of advertising?

Re: What do we really know about the effectiveness of digital advertising?

#252

Post by danso »

buboard wrote: post #186
josh2600 wrote: post #176

Earlier quoted context omitted.

https://techcrunch.com/2019/06/11/internet-trends-report-201... Please review page 22 to see that there has been a significant shift towards digital advertising since 2010.

i m talking about total advertising as a share of GDP[1]. The shift to digital is naturally following the eyeballs of users. Google's profits rocket while others' fall. The question is, did this shift drive increased consumer spending ? https://www.researchgate.net/profile/Rachel_Soloveichik/publ...

But isn't digital advertising substantially cheaper than traditional ad buys (e.g. print, TV)? If clients can spend much less to reach the same number of potential customers, why is it necessary for them to spend equal to or more than a traditional ad budget?

Re: What do we really know about the effectiveness of digital advertising?

#253

Post by jessaustin »

I kept waiting for the other shoe to drop on the #fitgirl/yoga pants anecdote. It seems plausible that such a targeted campaign could be more effective than the standard "dump a bunch of money in this set of adwords" crap. At least one executive was really certain about it. The way this section is written, it seems like we're making sport of that guy without actually knowing that he is wrong.

Re: What do we really know about the effectiveness of digital advertising?

#254

Post by pushrax »

lsc wrote: post #190
Normal_gaussian wrote: post #98

Earlier quoted context omitted.

I find, as a consumer, I disagree with the text only requirement. Videos are certainly off limits as a nuisance. However images convey a lot of information very quickly, and can be visually "skipped" in a way text cannot. When presented an ad for protein powder alongside my workout diets article, I want to see what it looks like. The presentation of the product is an important factor in whether or not I pursue it. It…

>This is more complex than financials - displaying an advert leads to a bi-directional association in the consumers mind between the entity being advertised and the entity advertising it. It is beneficial to advertise products that have Brand values similar to yours (or ones you want to appropriate). I agree, and I think that's part of why I disagree so hard with you on the primacy of images. I mean, i'm not saying t…

i.e. you want to see the facets you'd be looking for when choosing a product to purchase.

For many products and people that will just be the visual appeal, and advertisers target their widest audience.

This is a case where tracking can actually be seen in a positive light - I too think I would be more likely to convert if I saw a datasheet as an ad, but that's definitely not majority. At the same time, obviously fashion ads will convert better as images, in almost everyone.

Re: What do we really know about the effectiveness of digital advertising?

#256

Post by sologoub »

buboard wrote: post #186
josh2600 wrote: post #176

Earlier quoted context omitted.

https://techcrunch.com/2019/06/11/internet-trends-report-201... Please review page 22 to see that there has been a significant shift towards digital advertising since 2010.

i m talking about total advertising as a share of GDP[1]. The shift to digital is naturally following the eyeballs of users. Google's profits rocket while others' fall. The question is, did this shift drive increased consumer spending ? https://www.researchgate.net/profile/Rachel_Soloveichik/publ...

You are missing a lot of other shifts. For example, in a retail business, location is a form of marketing spend - if you rent in a high traffic area, you’ll pay more for the location, but will need less marketing dollars to attract the same customer.

Now, how does that apply to e-commerce? I don’t see the linked chart showing these changes.

There are many other structural shifts that a simple trend in a given Ads sector would show.

Re: What do we really know about the effectiveness of digital advertising?

#257

Post by dredmorbius »

buboard wrote: post #197
kposehn wrote: post #179

Earlier quoted context omitted.

Reliably someone comes along every few months to question digital ads. I always come back to analyses of incrementality as the real proof. Take an audience of X people. Divide them in two. Show ads to your test group, don't show to control. Watch your business grow and gauge the lift between the two audiences. The companies that know how to advertise at scale do this constantly and can gauge the real effect of their…

> Show ads to your test group, don't show to control Which is the wrong experiment to run. The old adage is that 50% of advertising works, you just don't know which part. You need an experiment to prove that ad spending scales with ROI, as ad agencies claim. That may well be completely false.

The basic experiment can be varied to allow for that.

Specify a set of zones. Target different levels of advertising at these. Look at sales trends. Rinse, wash, repeat.

Note that major corporations often designate specific areas for product testing. The Chicago area, and Australia, see trial runs of McDonalds products and store concepts, as an example.

The fundamental concept of testing advertising effectiveness is not new. Here's an account from 1909 (from one of my faviourite sources on advertising and media, Hamilton Holt's Commercialism and Journalism):

https://archive.org/details/commercialismjou00holtuoft/page/...

Re: What do we really know about the effectiveness of digital advertising?

#258

Post by Supermancho »

buboard wrote: post #197
kposehn wrote: post #179

Earlier quoted context omitted.

Reliably someone comes along every few months to question digital ads. I always come back to analyses of incrementality as the real proof. Take an audience of X people. Divide them in two. Show ads to your test group, don't show to control. Watch your business grow and gauge the lift between the two audiences. The companies that know how to advertise at scale do this constantly and can gauge the real effect of their…

> Show ads to your test group, don't show to control Which is the wrong experiment to run. The old adage is that 50% of advertising works, you just don't know which part. You need an experiment to prove that ad spending scales with ROI, as ad agencies claim. That may well be completely false.

> You need an experiment to prove that ad spending scales with ROI, as ad agencies claim

There is a limited audience that can be influenced. Just like house ads on a site (where you advertise to sell your own goods on your own site), there's only so much that is affected because you have finite traffic. There is a curve for every permutation of context (demographic, geographic, etc).

Re: What do we really know about the effectiveness of digital advertising?

#259

Post by dredmorbius »

viraptor wrote: post #191
kposehn wrote: post #179

Earlier quoted context omitted.

Reliably someone comes along every few months to question digital ads. I always come back to analyses of incrementality as the real proof. Take an audience of X people. Divide them in two. Show ads to your test group, don't show to control. Watch your business grow and gauge the lift between the two audiences. The companies that know how to advertise at scale do this constantly and can gauge the real effect of their…

How do you separate "people who haven't seen an ad" into a group in Google analytics? I don't believe "organic" source does that, because that means they weren't targeted by the ad in the first place, creating a bias.

The interest is more on markets than individuals, in general, so what you're measuring is market response given advertising exposure, or more critically, ROI given spend.

The fact that Web and AdTech allow the appearance of individual-level targeting does not necessarily make that a Good Thing.

Re: What do we really know about the effectiveness of digital advertising?

#260

Post by Supermancho »

nopriorarrests wrote: post #182
josephjrobison wrote: post #170

A very easy way to break this argument is to not look at huge known companies like eBay and Amazon, but brand new companies 1-2 years old that have grown almost entirely by online ads. Eventually word of mouth kicks in, but there are plenty of smart operators that built their entire brand and revenue off of ads. Works best in online direct to consumer brands.

This is a very interesting point, which in fact plays in defense of original article. Bob Hoffmann, very influential figure in advertising ( http://adcontrarian.blogspot.com/ ) likes to point out that there were not that many companies which built their strong brand with online advertising only. OK, he is old and grumpy dude and he dislikes online ads, but this is a fair point. Once company becomes big enough, it str…

I can name a handful that I've never seen an ad for on TV or in print (or maybe 3 or 4 years after using them). Twitter, DoorDash, Lyft...compared to SkipTheDishes in Canada, which has commercials on during SNL but maybe it's already hit peak internet marketing there, or maybe more appropriately GoDaddy which wasn't much until their Superbowl ad.
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