Comment by lsc | Hacker News Reader

Comment by lsc | Hacker News Reader

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the thing is, and others will disagree with me, but I think that from the point of view of your average businessperson, I'm right- the thing is that the so-called quantitative, conversion-oriented methods of advertising are not so quantitative. I mean, a lot has been written on the 'last touch' or 'first touch' problem. And a lot has been done to mitigate that, but one of the first things you learn running a business is that if you don't understand something? you massively over pay for it. And I (and I think most business owners) don't understand how a last touch conversion tracking could tell me how that customer really heard about me, and more importantly, how I gained the credibility with that customer required for them to punch in their credit card.

Now, some people think they can compensate for that. But, for me? I don't understand how you could tell that a user learned about me from word of mouth (before they clicked on an adword that got them to my site and a signup.) - To me, figuring that out is so hard that I might as well just focus on the brand-building kind of advertising.

Now, a lot of this is because most people are willing to pay a premium for the 'quantitative' advertising. they are willing to pay extra for things they think they can track. This means that if I'm right (and who knows) then the brand-building advertising, that most people consider largely untrackable, is underpriced.

I mean, I'm not saying I'm right and you are wrong... just that there are a number of businesses that feel this way.

That's an interesting point, and I definitely think that sponsoring an event attended by your target audience is a big step up from TV or billboards.

Now this gets heady: "People are willing to pay a premium for things they can track." Perhaps advertising vectors which are easily tracked, thus optimized, yield more valuable per dollar spent. If this is the case, demand for this inventory (Adwords, etc) increases. You would expect it to become more expensive by forces of the market. This is why you don't see people lined up to fill billboard inventory, especially in the last 10 years.

It is a chicken-egg problem in some ways, but I think people are willing to pay more because their advertising/conversion math enables it, and that math is easier to back up with facts.

> but I think people are willing to pay more because their advertising/conversion math enables it, and that math is easier to back up with facts.

Yeah. This makes /absolute/ sense if you are actually tracking what you want to track. (e.g. I think that when I buy adwords, most of the conversions are from people that had a good chance of buying from me from the organic results; I believe that people only buy from me if they've heard of me before; if my brand reputation, in their mind, is good enough.)

My theory is that most trackable advertising that exists now does not really track as well as you think it does.

If I'm right, then trackable advertising is overvalued (because the actions that are tracked are only peripherally related to the buying decision.) - of course, right now most people disagree with me.

> they are willing to pay extra for things they think they can track. > This means that if I'm right (and who knows) then the brand-building advertising, > that most people consider largely untrackable, is underpriced.

I disagree. Online display advertising, which can be tracked effectively has had incredible downward pressure on prices as tracking has gotten better.

I think most advertising is highly overpriced (brand advertising especially) and as tracking gets better prices will drop.

Ad supported business models get harder and harder in that world.

>I disagree. Online display advertising, which can be tracked effectively has had incredible downward pressure on prices as tracking has gotten better

that's essentially what I was trying to say. The part where we disagree is that I think tracking is not as good as you (and most people) think it is.

I read your comment as: Brand building advertising is under priced because people think it can't be tracked.

My point was once it can be tracked well it will come to light that it's not very valuable. Because that's the pattern we've seen with online display.

But, as I reread your comment I realize that I'm thinking TV style mass broadcast advertising here, and if you mean branding advertising on online platforms then I agree with you that in that context it's under priced.

Actually, you had me right the first time.

I'm mostly talking about offline brand building advertising. "Nobody is lining up to fill billboards" - I just bought some advertising on the checkout lane for the Safeway nearest google. (If that works, I think it will mostly work because it's so unusual. That, and the density of potential customers in the area.)

Really, I think sponsorship is an extremely effective way to build your brand; way more effective than billboards. I mean, if you can sponsor something that the people you sell to care deeply about. But, that's nearly impossible to track. My theory is that a customer might click on an adword (or organic search result) and sign up because they saw me at SCALE or something... but there is really no way for me to prove that.

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