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.
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.
"Everyone is doing it, must be good."
I believe this summarizes the ad industry quite well: https://www.youtube.com/watch?v=TysKyHXXtYQ
I guess you could rephrase your comment as this: People who run ads believe ads works.
As an outsider that is not very convincing.
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.
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.
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.
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.
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.
If I have a new product that I want people to become aware of then digital advertising, appropriately planned and targeted, can be very effective.
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.
Most importantly they are usually for valuable, useful, and desirable products. Banner ads on the other hand...
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?)
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.
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.
BTB, Average ad click thro rate is 0.05%, its 1 in 2000 people. So obviously clicking ad is a rare event but it do happen
I spent a few hours coding up a script that would launch a VM and create a new account with a catch all email, then confirm the email.
Worked well also.
Your approach was much less work, though. ^^
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 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.