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What if performance advertising is just an analytics scam?

sparktoro.com

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

#71

What if this article is missing the forest for the trees a bit? In my experience performance advertising is almost always paired with awareness advertising. The latter makes you aware of the brand/product/whatever then the former nudges you to act/buy/whatever. So if you’re buying or even just evaluating performance ads without considering the bigger picture you might come to erroneous conclusions. Take the Lego Movi…

The problem is it's not what's sold on the tin - the promise of pay per click advertisement is often that you can track the results of your spend more easily, and also that it can get buyers at the time they are searching for a sale. The article seems to contradict those two points at least.

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

#72
post #27

The example given in the article seems very off-base: the author is vaguely planning to purchase some type of planner, and he gets an ad for a specific planner from a specific retailer. There has to be a pretty tiny chance that he would have ended up at that exact site without the ad, so if the ad does lead to a conversion, it's incremental revenue.

It's interesting the OP appears to accept they're in the uncanny valley of "well FB knew somehow I was going to buy that one and showed me the ad".

For me it just made me think, well I'm doing something right because Facebook mostly offers me shitty white label stuff that's being sold using fraud (I've made complaints to Advertising Standards [UK] a few times about Facebook ads) and that I would never buy.

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

#73

> 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…

> if Williams Sonoma was not advertising on that search term, Lodge and Food52 etc etc would If I as a customer am using such specific search terms, then I would assume that my intention is to find and possibly buy this specific product. The results of other brands might be annoying, but why should I click on them? The relevant results are still displayed on the first page.

Ultimately I think it decreases google's value as a search engine (to the user searching) by a very small amount, but nets them a high immediate return. I bet it's hard to quantify the net effect over time, and it would be a really hard sell internally to not allow it.

I've noticed the quality of google search decrease drastically over the last 15+ years or so. I don't think that's directly tied to ad buys though.

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

#74
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…

> 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.

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

#75
see also "Consumer Heterogeneity and Paid Search Effectiveness: A Large Scale Field Experiment" (Tom Blake, Chris Nosko & Steven Tadelis) in which EBay did the same experiment (they stopped advertising), and also "The Unfavorable Economics of Measuring the Returns on Advertising (Lewis and Rao) which talks about how hard it is to measure impact.

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

#76

Earlier quoted context omitted.

If I’m searching for “Williams Sonoma 12 inch skillet”, advertisements for places selling it are a pretty large subset of what I want.

If a search engine encounters the query "Williams Sonoma 12 inch skillet", retail outlets selling it should organically appear in results without the need for ads.

If it’s $39.99 on W-S.com, I definitely want to see the place that’s willing to sell the same pan for $34.99, the EBay listing for $32.50, and the one selling a competing similar one for $29.99 even if those sites don’t have the organic search SEO juice to land in the top 10.

As a Google search user, why wouldn’t I value these? If Google doesn’t serve them and another search engine does, I’d be inclined to switch to the other one.

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

#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. Basically, his own VC-funded company turned into a shit show and suddenly he started advocating against VC in general (as opposed to taking an honest look at the mistakes that his company made). So in the past few years, I tried to reconcile in my head: how can a genius make such imperfect conclusions? My initial takeaway was that he's blinded by his own mistakes and shifting the blame, which seems perfectly reasonable and understandable. Frankly, I would probably feel and act the same way.

But after reading this article, it finally dawned on me. He makes imperfect conclusions in everything he touches, it's just that in some fields those conclusions can be more easily proved to be wrong than in others. SEO is the perfect field where a polished presenter can get away with imperfect conclusions for years - trust me, I know, I made a living for years in this field, and I am very familiar with the nature of this work. Most of the time, you have no idea what the black box really does, and instead you're just trying to guess what might have happened. Most importantly, there are many ways to skin a cat in SEO, and just because your approach is net positive doesn't mean that you truly are delivering the global maximum (or that the net positive gain was ROI positive). In short, it's impossible to know who's right and who's wrong, and Rand's videos convinced me that he's right, but I am no longer sure. I just rewatched one of them, and can easily see how his conclusions are just... opinions.

While we may or may never find out if his SEO opinions were the global maximum, we can quantifiably demonstrate that his opinions on content marketing are not solid. This whole essay he wrote can be replaced with "hey performance marketers, don't trust the platform numbers and instead do your incrementality studies." Platforms like Facebook will give you those for free if you reach a certain spend level, and you can also get them from 3rd party providers like measured.com. In other words, if you're a performance marketer and you're not conducting incrementality studies, then you're very early in your career and are not following the best practices. Simple as that - no need to extrapolate from there and reach all sorts of additional conclusions (which is obviously a pattern in Rand's behavior) - calling into question a perfectly investable marketing channel, conflating the needs of a public company with everyone else's needs, using words like scam, etc.

I am really disappointed to have to write this, but you would have been better off not reading this article. If Rand is really advocating that the majority of entrepreneurs should follow his advice and focus on PR instead of performance marketing, then perhaps an honest thing to ask would be - how is that working out for his own company? AFAIK, SparkToro is nowhere close to replicating the growth of his previous company, which is honestly disappointing for someone with such a huge reach and name recognition.

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

#78

Earlier quoted context omitted.

Forget about the corporate POV for a second, as a user, if I'm searching for X, I probably want X in my results, no? It's the fundamental contradiction in Google's search ads model. If Google delivers users the thing they want, ads by definition have to be things users don't want.

My "by definition" detector has fired. It says: that's not true by definition. Ads could instead also be things that users want. I do actually think you have a good point.

I guess the argument is that if google could make the perfect search result, ad spending would, by definition either be exploitative of the advertiser by providing no change, or providing value by changing the results from perfection.

In reality, Google is not perfect and you can argue that ads do provide value by promoting relevant content, even if its gameable by our capitalist system.

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

#79
post #18

> 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…

> 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 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 known fact that targeting your competitors' branded terms is ROI positive, which definitionally means that the affected brand is unable to capture all the customers who were initially searching for it.

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

#80

> 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…

> if Williams Sonoma was not advertising on that search term, Lodge and Food52 etc etc would If I as a customer am using such specific search terms, then I would assume that my intention is to find and possibly buy this specific product. The results of other brands might be annoying, but why should I click on them? The relevant results are still displayed on the first page.

Depends on the brand, right? If I search for Klenex or Bandaid, or Advil, I might be fine with the cheaper generic.
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