That's why you need to use uplift modelling.
What if performance advertising is just an analytics scam?
311–320 of 369 posts
Re: What if performance advertising is just an analytics scam?
#312Earlier quoted context omitted.
- 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 corre…
> Rand implies that you have to do your own studies [...] which is 100% wrong - Facebook will do them for you So FB, who earns on my spending, offers me to measure for me whether my spending makes sense for me. Why would FB ever tell me to spend less? Don't they like money?
> Why would FB ever tell me to spend less?
There's literally a team at Facebook (Marketing Science), part of who's job is to tell advertisers what actually works and often, this can lead to them telling advertisers to spend less.
And this is an incredibly smart business strategy in that FB know (from experiments et al) that their platform works, and if they can show incrementality, then advertisers will invest more in the platform.
In game theory terms, it's a good strategy for a repeated game, which advertising definitely is.
Re: What if performance advertising is just an analytics scam?
#313Earlier quoted context omitted.
Now I am curious - what are the examples of unprofitable performance marketing campaigns at that scale conducted by public companies?
> When P&G turned off $200 million of their digital ad spending, they saw NO CHANGE in business outcomes. When Chase reduced their programmatic reach from 400,000 sites showing its ads to 5,000 sites (a 99% decrease), they saw NO CHANGE in business outcomes. When Uber turned off $120 million of their digital ad spending meant to drive more app installs, they saw NO CHANGE in the rate of app installs. https://www.forb…
Like, this is probably true for advertisers who have a well known brand. One would expect incrementality to be lower, because everyone's already heard of the brand.
However, if you are a new entrant/small business this is not the case, because nobody has ever heard of you.
As an example, look at TikTok. They spent insane amounts of money on FB ads to get as many installs as possible, but I'd suspect that they don't do this anymore because they've got enough brand equity that it doesn't make as much financial sense.
Re: What if performance advertising is just an analytics scam?
#314I was at one company several years ago and made two big changes to digital advertising: #1 - Eliminated all paid search other than some limited branded search terms and shifted all the money to affiliates who were way better at making profits on the keywords we were competing on #2 - Eliminated all display advertising after running numerous experiments showing it provided almost not incremental conversions, even thou…
Performance marketing is essentially the only way most startup marketers can go. The reason is that they generally have 6 to 12 months to prove themselves as performance marketers. Generally the CEO has sold some insane growth model to the VCs. As a marketer, you do the math: $ growth required/ASP = number of deals. You get to your lead targets by reversing the funnel (Closed Won -> Opportunity -> Lead). And you see…
Yup. Scaling marketing without accurate LTV's is normally a terrible idea. I've seen so many startups go bust because of mistakes here (especially if you have a long sales cycle/top heavy revenue (like most f2p games)).
But, as you said, the incentives point towards terrible outcomes, so this keeps happening.
Re: What if performance advertising is just an analytics scam?
#315I've run ads for well over a decade: above the line and digital. All media works, to some extent and the main issue is the way marketing teams on the advertiser measure them. I've also run campaigns you'll all have seen or heard of. So the idea it is a scam is stupid.
If you are okay with everybody hating you, then it's probably a good career choice.
If you are okay with hating you, then it's probably a good career choice.
Re: What if performance advertising is just an analytics scam?
#316(So I do think that performance advertising is partly a racket, but it can work really well if you know what you're doing). One additional thing people don't call out is that a lot of the budgets spent on these platforms are "learning" budgets. Agencies play this card really well. They'll tell you, "oh, you need to increase your budget, and test all these different combinations of ads/targeting/landing pages/etc so t…
> the platforms are kind of incentivized to make the learning less efficient
Any successful platform is not, because by definition they have enough ads, and so want to focus on driving conversions for advertisers so that demand, and hence revenue, increases.
Agencies are often super shady though, on that we agree.
Re: What if performance advertising is just an analytics scam?
#317Earlier quoted context omitted.
Down that road lies the argument that Google should be treated like a public utility. If the only mode of transport available were sponsored taxis, then people would be rightly demanding for the ability to pay for a car or use a government run public transit system.
There are other search engines that work just fine.
Do the other search engines work fine because you pay them directly, instead of them being ad-funded? Because that's the argument the GP was using.
Re: What if performance advertising is just an analytics scam?
#318Earlier quoted context omitted.
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.
I haven't seen anyone mention the fact that a big factor that contributes to how the Google Ads "black box" determines how to rank ads is via an Ad Quality measurement. Each ad is given a quality score, and since your own website will be guaranteed to be the most authoritative source for a keyword search with your own branded keyword(s) in it, by default the quality of your own ads will be much higher than your compe…
Or maybe ads could go back to where they were: on some yellow background and on the side. Not looking like the first search results.
Re: What if performance advertising is just an analytics scam?
#319Earlier 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. When you put it that way this sounds like racketeering.
If you take as a foundational assumption that the brand name in the search string means the traffic is in some sense owned by the brand, then you're absolutely right. It's essentially racketeering. Certainly brands often view traffic that way. Personally I resist the idea that a brand owns my attention because I used a keyword, but that's one of my many personal quirks.
Personally I resist the idea that a brand owns my attention because I used a keyword
What kind of keyword are you referring to here? Because brands do own certain keywords, they're called trademarks. If you don't want a brand to feel entitled to your attention, don't include registered trademarks in your search query.
(Yes, I know, trademarks are limited to a specific market segment. Doesn't invalidate the basic premise of searching on trademarks though).
Re: What if performance advertising is just an analytics scam?
#320Earlier quoted context omitted.
You tell a cab driver to take you to Morton's Meats and instead they take you to Shelly's Steaks (who pays them a kickback each time they do this), and then charge you for that detour to earn their kickback when you demand they take you to Morton's like you asked in the first place. Is this appropriate behavior by the taxi driver? Would a regular person consider this deserving of punishment? Is Google's search result…
Eh... that's not a great analogy. The equivalent of your story would be if you clicked a link for Morton's on the Google SERP and it actually redirected you to Shelly's. What Google is doing is more like taking your destination, then asking "hey, you might like this other steakhouse more, want to give that a try instead?" before driving. Potentially annoying if the answer is always no, but... the answer isn't always…
A point to add though that highlights the issue is that for many many years prior, Google had gotten users used to the ideal that search results were fair and not influenced by payments under the table though. The injustice is turning a free and fair situation into one of deception and payola that will likely get much worse because rising consumer cost is the end result.