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One of the most vexing problems for me is how to calculate how much to spend. We had a year of double ad budget, but we didn’t see a corresponding rise in sells. Only 10%. We assumed we reached market saturation, but it still a lot of guesswork, even when meticulously diving into GA data.
What industry are you in?
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> 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…
>pay Google for the traffic they would have already received had the ad not been there. But this line of reasoning begs the question. If this system wasn't in place, then Google search would not exist as it does and the search traffic would not necessarily exist in the same way, no?
yes and no. Google search didn't have as intrusive and competitive ads as it did before and the search function was effectively the same. Nowadays, if you search "Williams Sonoma Cast Iron Skillet" you get 5~6 ads and 2-3 scrolls to get to the real organic results. 6~8 years it was like 1 ad and you could see the first result.
Instead of product and customer, think value added. You buy a server for $0.065 an hour. You buy traffic at $0.01 a click. That's your raw commodities. How do you make a profit off of that? Supposedly if you're good enough you can get elected president. I'm sure there's room in there for you to pay your bills.
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…
Can I politely suggest that you share with us the holes you see in the arguments and how you see them? Whether or not Rand is any good at what he does or says will be clear by your expert disassembly of his arguments.
I think this is overall a waste of resources and I'd like to see a more virtuous system, but I fail to imagine one.
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…
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
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> 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.
Your logic about the ads is sound, but your experience as a customer does not mean all customers exhibit this behavior. The best course of action is to test this conclusion which can be reliably done with a Google Ads Experiment.
#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 though the platforms happily took credit for them.
Those two things drove our blended CAC down substantially and by building better affiliate relationships, sales actually increased.
The lesson here is that you need to try a lot of things out and you should be continuously questioning what you're doing and running specific experiments to gut check effectiveness of any ad platform that is slapping cookies on wide groups of users and claiming conversions.
My suspicion is that this is near impossible at any large organization, even one as new as Airbnb. I can just imagine someone walking into a team of 20+ performance marketers and suggesting they need to experiment to determine if any of it is remotely effective. COVID forced them into this but it's something that they should have already been doing.
I also suspect that the top line focus/obsession of most VC-backed companies make this type of exercise seem almost counterintuitive. Don't mess with or question the momentum.
I 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…
So, it's great for your business that this worked, but I personally don't see any strategy that leans on affiliates to be worth celebrating.