Does anyone believe ad products actually work?
Here’s my take on digital advertising after 10+ years in the industry and having worked at Google, Snap, and in the agency world. I’ve personally spent hundreds of millions of dollars throughout my career. ———————————————————— -Attribution is still absolute dog crap. No one knows how to properly attribute conversions to media channels. I’ve worked with many of the top attribution platforms (both FB, Google, and independent). The data is barely actionable. -Many ad agencies call push channels “brand marketing” and use awareness/consideration lift as measurement because they can’t prove value to the advertiser using CPA/ROAS. I’ve yet to see an agency or brand scale new demand efficiently using ads. CPAs almost always come out too high for advertiser to continue to invest. -The marketing funnel as we know it is a bit of a joke. Most ad products aren’t designed to target individual users sequentially. -Pull channels are always efficient with low CPAs and high ROI. I’ve run dozens of tests including less sophisticated (on/off and geo) and more sophisticated (ghosting). For every dollar you invest in pull channels you’re lucky to get a few cents of incremental revenue back - those users were likely coming to your site anyway. If you have decent SEO (and as long as the space isn’t overly competitive) pull channels barely contribute anything. -Pull channels are likely just an additional cost to what you’re paying to drive the demand in the first place. I.e. generate lead through YouTube at an inefficient CPA and then retarget to same user at an efficient CPA - you just paid twice for same user. ———————————————————- I watch agencies “make it work” all the time by blending ad spend. I.e. spend a little on push and most ad dollars on pull. Then give the client blended CPA/ROAS. Push channels - YouTube, Twitter, Pinterest, Snap, Yahoo, DoubleClick, GDN, Google non-brand search, Facebook, Instagram, Gmail Pull channels - Google brand search, Bing, GDN retargeting, Google Shopping, Amazon display (the most atrocious attribution out there), Amazon search ads Agencies I’ve worked with through my career: OMD, AKQA, Fetch, Vayner, Essence, various small shops Some of these channels are both push and pull, I realize this. This is my best effort to bucket them. These are generalizations but hold true for 98% of advertisers with the exception of app install with high AOV and high margin/low price point impulse retail products. ANYONE DISAGREE?
Ads are just about brand awareness...
No disagreement ... But it's an amazing cash cow for some companies and the only reason they still exist and are profitably viable.
I’ve bought several things my friends already bought thanks to Facebook but generally the rest I never click on. My friends are apparently great at finding obscure things I also want. For example I didn’t know there was a power wheels type thing that looks like a Star Wars landspeeder.
That sounds awesome. Pic?
Ads can easily grow a business. Just watch shark tank to hear a bunch of success stories. You likely don't think they influence you but it does. When you shop for laundry detergent what brand did you choose...why that one. Likely you recognized the label due to advertisment
These arguments are a bit anecdotal for my liking. I’m talking about concrete facts and controlled a/b testing. Here’s an anecdotal argument just for the sake of arguing. Brand awareness for Tide, Downy, etc is already at 98%. You already know what brand you’re going to buy before you walk in, you just don’t know it. More likely attributed to quality of product or that your family has been using it for years.
There’s lots of evidence to back AWASU7 Up. OP have a read of ‘how brands grow’ by Bryan sharp if you want some scientific evidence behind how certain types of advertising have worked well for traditional fmcg brands. He does actually use a scientific approach to measuring effectiveness of marketing on retail brands.
Did your agency make you feel like an idiot today or something?
Haha nope, quite the opposite. I would love that for a change.
Honestly your analysis is really good but you missed the bigger point, do people really click on ads and finish transactions (i.e convert). I am mainly speaking about search ads, but same applies to Native ads as well. I never believe there are this many people who really click on ads and buy stuff.
Can you tell me how to learn more about this business? Eg CTR, avg bid prices, number of advertisers, benefits to advertisers, different countries etc. 2 of the biggest employers are in this business, but I feel I don't understand it at all. In my 17 years of using internet, I have probably clicked on 2-3 ads by mistake. I mostly never even see them due to adblock, so i never understand how these companies keep reporting 10 billion of revenue every quarter.
Same here. But a lot of people do click on them. Especially, the ones on Google, FB, Amazon, Yelp etc. since they are so native. Its difficult to not click on ads on these websites unless you are explicitly trying to avoid them.
Instagram ads are very effective across the funnel primarily because they are high quality compelling images and the format is native
“Half of what I spent on ads is a waste... the trouble is I don’t know which half” - by someone, too lazy to google... honestly, I think it may be like 80% wasted, 20% converted. Facebook ads are definitely a notch up. They look native unlike pop-up/floating ads on other websites.
What do you mean by 20% converted? Typically click rates even for pull channels are under 5% and conversion rates are 2-4% of the 5% that click through.
Ok, converted is wrong. I meant 20% ads may have some subconscious impact on viewers’ mind. For example, when I see Amazon ad, I may not click it but it makes me aware that there is something like Amazon and it is selling items. This is impossible to measure though. It maybe even 10%... I don’t know... but there definitely is impact.
That's a lot of words