Are ads really effective? I don't buy advertised products.
Do we really trust ad tech accounting? They've been caught inflating numbers over and over again.
The whole house of cards seems like it could fall over if actually investigated. Google, Facebook, Twitter - every single one of them.
Influencer and direct social referral advertising seem much more "legitimate" than injected ad impressions.
How can we get the thing to implode? Google has destroyed the web to prop up its ad business. I'd be happy if they couldn't cause any more trouble.
However, 80% of ads are trash peddled by blind men leading blind men.
There are very specific advertising techniques that work consistently, but most "marketing types" optimize for flashy artistic ads that have literally ZERO selling power.
In fact, in some studies, ads actually REDUCE sales -- by, for example -- accidentally highlighting something that is an unexpected turn off to customers.
But, the problem is, most companies don't trace their ads. And that's why overwhelmingly a lot of advertising money is wasted.
But this state of affairs has been going on since the 60's.
So I wouldn't underestimate the number of gullible humans to keep paying for advertising.
As long as you have eyeballs you'll probably always have an excess of ad spend.
There's just a shit ton of money to be made pretending it's 1955. I went into the wrong business.
If you end up a multi billion dollar unicorn with tens of millions in ad budget, targeted direct ads no longer move the needle like they did when you were a startup. Now for the Director of Marketing to justify increasingly larger compensation, he needs to increase his ad spend and starts whispering about spending money on ads that have no direct correlation to the bottom line. This is called brand advertising. Hint: If an early stage startup spends more budget on brand advertising than direct marketing, run.
Effective advertising is matching the product/service with some problem, on a specific channel of eyeballs, with a specific message. There are tons of new channels popping up every few years (think google, facebook, instagram, youtube, twitch, pinterest, wechat, stackexchange, hn, reddit, etc). There are millions of permutations but you have a finite ad budget. The magic is deciding how to show what to who.
It was a simple PPC campaign that included keywords in google search results and geofenced it to the SFBay. Here are some numbers and findings:
- PPC costs were about $1-2.50/click with a ~$15/day max spend
- Selected cities by hand to fit the service area
- We did in fact get clicks outside of the zones we selected. Many if them were B2B trying to sell their services.
- Customer acquisition costs specifically for the google ads campaign was ~$70 (clicks/conversion)
$70/customer sounds like a lot except these home improvement contracts were typically thousands of dollars, so the campaign was a fantastic ROI. Furthermore, we dialed down ad spend as the reputation was built, and now most leads come via referrals and review sites.
In the end all that mattered was that customers were signing contracts so even if there was some funny business going on it was still worth it for our particular case.
"Yeah, Google was robbing us blind and kind of scamming us with their geofencing shenanigans, but we were making enough money that it wasn't worth fighting, and eventually we figured out how to stop buying ads from them."
Sure, the partner may be hard to work with, but so is almost any big tech platform provider (... Apple ...) and it can be quite profitable to put up with.
If you want to sell everyday consumption or end consumers items, this scheme will eat all your income/benefit.
After reading about all the flaws in automatic online advertising through clicks on this thread, it looks like a big scam prospering more or less in favor of opacity, lack of fine tuning or targeting and fraud.
Referral systems and social influencers seems to be a better option, as long as your product is good and would not shame the ones endorsing it. Betting on viral marketing and endorsement seems to be more natural and a better bet, but require maybe more work and preparation than blind automatic system.
I guess that's why people are so excited about click tracking, analytics, etc, etc.
When I was running advertising for a small business we put vouchers in to track advertising. The only people who brought in vouchers were people who were already customers who said they were already coming. So, we spent money to reduce our revenue. (I do the same, hunt for vouchers after making a buying/visiting decision.)
I was on national TV and national radio (UK) - none of that blipped our visitors/revenue.
Only thing that ever definitely worked was handing out flyers and chatting to people in the street (and being top of Google SERPs).
Still 90% of their profit comes from ads. They are much less diversified than Apple, Microsoft, and Amazon.
Even if only a small percentage (e.g. <2%) click on the and, and then a similar small percentage actually buy anything after clicking, you are still making money so long as the cost-per-conversion (i.e. per sale) comes out low enough that you still make a profit. Spending $3-5 to make a sale in say a pair of shoes that retails at $100 with a profit margin of $30-40 is good business.
People are making huge amounts of money/doing huge amounts of business directly as a result of the ads, and that is not just Google and Facebook, but everyone all the way down to little mom and pop businesses.
When you track things down to the level of sales it very often works (not always - depends on products/business models etc), and that is why people are using online ads. AdWords and Facebook ads would have fizzled out years ago if people were not benefiting from advertising their business
With a lot of brand keyword advertising, companies are paying for people to click an ad when they were already looking for your website anyway. So spending $3 on that customer is not a $27 profit but rather a $3 loss....
And it's still a $27 profit, even if it is possible you could have saved money.
Most of the time a well-optimised PPC pipe looks for specific (non-brand) keywords and buys them, not just the product name.
>It's well known in business that ads are generally dubious at best and likely mostly a fraud.
You're using the phrase "it's well known" in an attempt to support a consensus that you completely fabricated. I spend over $100,000 every year on digital advertising, and I can assure you there is a very measurable return. Colleagues who manage much larger (and some smaller) marketing campaigns are also making measurable returns. You clearly have no experience in what you're talking about. So why talk about it?
There are lots of unsophisticated business owners and marketing "professionals" who think they can just throw money at digital and it will magically return. These same people don't understand how to effectively measure, so they may not even realize they're burning money. Like any failed venture, that is THEIR fault. In no way does that make advertising "generally dubious at best and likely mostly a fraud".
The fact that it works for you doesn’t mean that if that industry wasn’t as monopolised and unregulated you wouldn’t pay 1/10th of what you paid for the same.
My friends and I launched a physical product over the weekend last week. I put together a basic landing page and bought some Instagram ads. We spent about INR 250 (around $4) before I stopped the ads to do some optimization.
That $4 in spending brought us 1 customer who placed 2 orders worth $35. He also referred 2 other customers who placed an additional order of $35. $70 in revenue for the simplest of funnels is wildly lucrative.
Second, any marketing professional worth their salary is measuring with a number of tools to verify that the information they're getting from Google/Facebook/etc. is accurate. There are many metrics that only they can provide, but there are enough independently measured data points that fraud would be obvious.
Finally, you're blaming Google, but the advertising industry's current state is a product of extreme corporate greed (on the part of advertisers). It doesn't matter whether Google goes away, greed will continue to corrupt in other ways. Look what happened with the rise of ad blockers - native advertising, which is just a nice word for the paid corruption of editorial space, has become so prominent that you can't trust most of the articles you read on sites that were once considered reputable. The "influencer" marketing you mentioned is a perfect example. People with social presence and influence are being paid to lie about a product. You think this is somehow better or more "legitimate"? I would love to hear more about that. At least with Google, I can clearly see where the ads are.
So you can try to implode Google or any other facilitator of digital advertising, but money will find a way. It always does. You're trying to change human nature.
What is so different about seeing something you are interested in from an ad or from a website you clicked through to yourself?
> Are ads really effective? I don't buy advertised products.
Do you buy many products online at all? If you don't, then they probably won't be useful as you aren't someone who spends much money online for anything. However, there are many people who do. For example, my girlfriend and many other women I know spend tons of money on clothes/shoes/jewelry online and a decent amount of the products they find out about and like come from advertisements.
To give you an example of the scale, I spent over $1,200 dollars online yesterday during black friday on clothes, shoes, and jewelry for her. While I don't know how many of those products got sourced from advertisements, I'm sure some of them were because most were from a doc she has been using to keep track of things she wants and she likely saw them first on an advertisement.
At the end of the day, if your ROAS is good, you don't care that much.
