There have been a lot of rumors about Amazon buying Target and although I do like Amazon, I hope it never happens. IMHO Target was the only online/b&m business that was competitive with Amazon prices and deals over the holidays.
I'll be honest I had no idea who Sam Altman is so I read his wikipedia page and I still don't quite understand how he got to where he is today? Was his success started by the Loopt sale?
He's a very smart guy, according to a lot of people, and he's also nice. He made an app that was reasonably successful, sold it. When in YC, pg recognized his genius... and over time decided he's the guy who should run YC.
Thank you for the details from a Pilot's point of view. I was watching this flight play out live and it was certainly a nail biter. I couldn't believe they were going to land let alone take off.
In my own personal experience, I can honestly say I've never "intentionally" clicked on an ad in the past 20+ years I've been on the internet. I will say I've certainly looked at ads in magazines, billboards, tv commercials (before tivo) and even those small planes pulling banners at the beach.
I am not surprised that digital marketing is not that effective. What does surprise me is why its taken this long to figure that out.
I almost feel like there are two factions. I'm pretty similar to you. I have clicked on ads a handful of times, but it's very rare. However, I have worked in jobs where I had visibility into the metrics, and I have seen internet ads be EXTREMELY effective. Not in terms of clicks (which could easily be accidental or fraudulent), but in terms of people clicking and then purchasing. People aren't going to "accidentally" click and then give us money. And I've seen many campaigns where we were getting huge ROI in terms of actual dollars. So there are clearly lots of people out there who do click on ads and take action. I think the problem comes when you're using an intermediate metric like clicks or impressions to measure success. You have to measure the actual outcome you are trying to drive, like purchases or subscriptions. Of course, with CPG, that's a lot harder to do. And I'm not convinced that pure brand advertising is any easier to measure online than it is offline.
Not only are there definitely people who click ads, but there are people _like us_ who click ads.
All the dev tool companies run ads! CircleCI runs them, but the dozen or so other dev tool companies where I know the founders or early hires also run ads. You would think given comments like this on HN that they would be useless, but we all run the numbers. The numbers say that not only are they effective, but that usually we should run more of them.
It's like when people here say "oh I hate talking to salespeople". Yet, salespeople make the world go around.
Even then, I think you are being too generous. The stricter criterion is something like: "People who run more ads believe they will personally benefit from running more ads."
Ideally (and occasionally) this means that ad buyer believes the company as a whole will benefit from the advertising. But even if this belief is real, if the influence or income of the decision maker correlates positively with increasing spending on ads (and decreases with cutbacks) it can be difficult to distinguish belief from reality.
All this talk about "belief" like it's religion or something. It's reasonably feasible to get hard, scientific numbers that prove the effectiveness of advertising spend. Ie tracing click throughs vs conversion rate.
>I've seen many campaigns where we were getting huge ROI in terms of actual dollars. So there are clearly lots of people out there who do click on ads and take action.
That's the problem, though. You can tell me that the user clicked on the ad and then bought my product; but was the user going to scroll down to my organic search result, click on that and buy anyhow? The advertising sellers claim that they should be credited with the sale, when all they are providing is moving the last link up; at least in the industry I was in, a user, generally speaking, isn't going to sign up with a VPS provider they haven't heard of. Sure, sure, putting a special in front of them can move you from second or third place to first place, and there's value in that, but really some brand advertising needs to be done before you can sell at all, and as you pointed out, measuring the effectiveness of brand advertising is super hard.
I suppose there are some products where the user really is going to buy the product first linked; but I think there are a lot of products where the user doesn't make a buying decision for some time, and the last click... may not have a lot to do with what order the links are in.
I think this is the real problem with online advertising; tracking that last click into a purchase is fairly easy (though, as you point out, some people don't even do that) but figuring out how much of that purchase was because the link was first, and how much of that purchase was because the user had previous knowledge of you? that's hard - I understand that a lot of research is being expended in this direction, and that this is the value proposition that Facebook claims, but... it's a hard problem, and depending on the product, you could reasonably argue that the state of the art isn't as good as the people selling advertising say it is.
But it is an open question of incrementality -- did you just cannibalize a sale from a different, possibly cheaper, channel? How much lift did you actually get?
That's the problem I've seen in the digital ad space -- lift is either hard to measure, or ignored completely. Causality to the sale is assumed on the ad.
I think that's a great point, and definitely hard for a huge company like P&G. But for a small company, it can be easier, because when your volumes are low enough, it's often very easy to directly see sales uplift in your top line numbers when you run the ad. If I normally get 20 orders a day, I run an ad and get 40, then the ad budget runs out and I'm back to a steady 20, I'm not too worried about cannibalization.
For a huge company it's even harder. I think the internet ads serve partly the same as news paper ads. There is no click through for them either. Actual paper ones.
We have a couple different phone numbers exclusively for advertising campaigns. We can note the line it came on when receiving the call. We're a small-mid business, so I assume larger businesses have budgets for a lot more ways to track printed media advertising that isn't too obtrusive.
New customers or orders brought in by the ad which you wouldn't have gotten otherwise. Lift is a basically unmeasurable quantity which directly relates to the ROI of the ad.
Mostly I've noticed that people click ads when they don't realize they're clicking an ad. For example, when my dad googles something, often he doesn't realize the results at the top are all advertisements (he's colorblind and has bad vision). When I point out to him that they're ads (whether relevant or not), he then avoids them and scrolls down to the organic results.
I agree. I think there's a big hump in the middle of people who are like "hmm, this is relevant to me, i'll click it", then 2 long tails of people who click a LOT and people who click rarely or not at all.
On the other hand, there is a not-insignificant number of bot networks and shady clickfarm sites out there. Though, you can usually avoid being taken in by them by not being a cheapskate - quality traffic is more expensive. If you're bidding <$1 CPM for most things, enjoy funding a click farm.
> I am not surprised that digital marketing is not that effective.
To be clear, that isn't what the article is about.
P&G still spends massive amounts on digital advertising. The point they are making is they were able to identify & eliminate $100M of advertising that was ineffectual.
The other part is that P&G is largely into consumer products & I highly doubt they are measuring online advertising by clicks.
Clicks are a decent measure for performance advertising but pretty poor for brand advertising. And when it comes to consumer products & digital products, it's mostly brand. (Consider, when a typical person needs tooth paste, do they hop online, type it into Google, look at results & then buy it? Or, you know, do they just grab whatever brand they've always gotten on a trip to the grocery store.)
Digital advertising is largely held to the same standard where most of that brand spend is: television. And there are no clicks in television.
With television, they first data point they're looking for is how many people did they reach & what was the demographic composition. They may later follow on with surveys to see if they achieved the change in awareness/purchase intent/whatever, as well as try to analyze for lift in sales.
So does P&G care if you click ads? Probably not. What P&G cares about is shaping how you think about laundry detergent, making you aware of their brand, creating a positive association with the right attributes, and ultimately in you buying their brand at the store.
Given the amount of stupid ads I see I sometimes click one when I see something that is remotely interesting (dev tools etc), hoping to train googles AS (Artificial Stupidity) to serve me more relevant ads. (No, I'm still happily married and I cannot figure out why a company that sits on my personal email and most of my internet searches for the last 15 years cannot figure that out. Especially as I have even configured my ad preferences in the settings.)
I can't figure out why Zillow thinks I'd be interested in houses in Palo Alto. They regular send me emails about houses they think I might be interested in, and they are in the Palo Alto area.
The only reason they have my email address was because I made an account so I could claim my house on Zillow, so they know exactly where I live, and that is 850 miles from Palo Alto.
I've had several ads I would have clicked on them, but I didn't get to them in time. Typical scenario: I'm reading a story at fanfiction.net. I get to the bottom of the page, and click the button to go to the next page...and then I see that the ad on the bottom of the page is for something I'm interested in and I want to click, but it is too late.
If I go back, either by the browser back button or by the button on the next page to go to the previous chapter, it usually does not show the same ad.
(It also appears that the ad it does show then is not random. There is one particular ad that I've seen a lot when I get to a page via the back button. I wonder if it is possible to specifically target pages reached by back buttons?)
This is probably the experience of a lot of people. Never clicked on an ad, no idea who does. Same here.
I happen to know a guy who drives some very expensive cars. He made his money advertising stuff online and selling it. He knows all the tricks, the inside out of how Facebook and Google work, how to source cheap stuff, how to ship things, and so on.
So clearly someone is clicking the ads.
My guess is he has some tricks up his sleeve that are either unknown to most marketers or slightly dodgy. Actually that last one he told me himself. But he does know a thing or two about how the ads work, what makes people buy, and all that.
> I am not surprised that digital marketing is not that effective. What does surprise me is why its taken this long to figure that out.
It is effective, and cheap at that. I run a small-ish left wing FB site and Twitter account, and regularly do small scale advertising - either to rally people up for a demonstration, or to annoy right-wingers. Proper targetting makes this incredibly easy, and judging by the numbers it works out just fine.
Relevance is huge. If you're shown an ad for something that you don't care about (which is most of the time, for most people), it will not be effective. However the right ad at the right time is very effective. But that's impossible to get correct all of the time, so there's no choice but for merchants to play the odds.
Long time ago I used some free $ on adwords to advertise Dropbox. I maxed out the free storage upgrades within a day or two. I am sure I am not the one who did that. People click on ads. Plus ads are not always meant to lead to sales. For companies like P&G who sell products with many substitutes it's also about maintaining brand awareness.
As a counter example, I click on ads fairly often, probably once a month on average. However it is only for rather niche products or rather niche companies. I've discovered a handful of companies that have gotten my money this way over the years, many of which I probably would never have heard of otherwise.
I haven't intentionally clicked on an ad nor have I intentionally look at an ad in magazines, tv commericals, etc.
I've gotten rid of my magazine subs years ago and haven't owned a TV in years.
> I am not surprised that digital marketing is not that effective.
Depends on the type. Certain google/facebook ads get far better traction than any traditional ad.
The truth of the matter is all ads are ineffective. It's just that digital ads are easier to track ( the impression, clicks, views, etc ) whereas "traditional" ads are not.
The problem for companies/ad agencies/etc are that kids/younger demographics are spending so much time on social media. We know that some digital marketing works because these youtube stars make a killing selling their own merchandise that they advertise on their own channels.
The best thing for ad industry is if traditional media dies and goes away and then they could focus their attention on "digital" rather than traditional/print.
> ... digital ads are easier to track ... whereas "traditional" ads are not.
digital ads are not always easy to track. a lot of malware is dedicated to filling your cookies with visits so that if you happen to buy something, they can claim you saw the ad prior and take credit. in many cases, a digital add campaign creates such a tiny blip in sales its hard to differentiate from randomness, were as a TV ad shows floods of sales.
> The best thing for ad industry is if traditional media dies and goes away and then they could focus their attention on "digital" rather than traditional/print.
traditional advertising, namely TV, is still the most successful way to increase sales for many companies. since digital ads leads to so few sales, even the platforms have often moved away from 'advertise to produce sales' to advertise for brand management.
