How Facebook Sold Krill Oil | Hacker News Reader

How Facebook Sold Krill Oil

nytimes.com

38 pointsLibertatea16 comments

The money line is this:

> Indeed, R.B.’s lawyers won’t let its marketers claim that MegaRed [krill oil] pills actually lead to a healthier heart. They can only suggest it with scientific-sounding language like “supports three markers of heart health”: triglycerides, C-reactive proteins and the omega-3 index.

It's rare to see such a straightforward and clear admission of how much bullshit there is in advertising. Using weasel words that don't actually mean anything (so that the customer can't say that your product didn't deliver), and selling stuff that people don't really need but which they buy because they make them feel good. Of course, this is more obvious in OTC health products, but actually present in most categories of ads. I think that the omnipresent advertising we're facing in the modern world is nothing more but pollution of the mind, implanting thoughts that aren't really our own but that only serve a for-profit purpose of a multinational corporation.

Most people don't think advertising changes their behavior, but the numbers say the opposite. We're surprisingly naive about how easily influenced the human brain is. For this reason I'm extremely careful about what kinds of friends I keep. I might not have much control over how they influence me, but I can control the kinds of people I hang out with.

The science of consciousness suggests, with the caveat that it's very early days, that we don't actually have free will, and are we really just the sum of our past environments and genetics interacting with our current environment. Your genetics and past are immutable, but your current environment can be changed, and that's likely the best chance you have of putting the future "you" on a good course. So watch what kind of inputs you feed into your brain computer, because those will determine the outputs.

(I don't like to dwell on the no free will part, I find it useful to pretend I have an "I" and a free will, even if it may not be true.)

You're interpreting "their lawyers won't allow them to say X" to mean "they don't actually believe X", "they can't substantiate X", or "X isn't true". Except with medical advertising, at least in the US, there's very strong restrictions on what medical claims you're allowed to make for your product.

And the reason for those restrictions is to protect consumers. If there was evidence that fish oil pills improved health, RB would have paid for the medical research already.

Note that Lovaza is a fish oil preparation that is FDA-approved for treatment of "very high" triglyceride levels. There's probably a patent issue preventing other similar agents getting approved for the same indication for a number of years.

There's some evidence, enough that some doctors will recommend you take them, but there's not strong enough evidence that the FDA will let you make the marketing claim.

There is absolutely NO conclusive evidence. Your doctor is not a scientist (http://www.bmj.com/content/bmj/328/7454/0.9.full.pdf). It's not up to doctors to decide what works and what doesn't. The fact that doctors prescribe Omega 3 pills means absolutely nothing. The fact that there is no scientific evidence to say the pills are conclusively beneficial DOES mean something. The only evidence of effect has been based on studies of large groups of people who claimed to consume Omega 3 or not. However, proper blind experiments do not reach any conclusive outcome. There is no evidence to suggest the effect is anything but correlatory. (That said, most supplementary pills will do you no harm, either.)

Even RB themselves write this on the homepage: "Supportive, but not conclusive research shows that consumption of EPA and DHA Omega-3 fatty acids may reduce the risk of coronary heart disease."

I didn't say there was conclusive evidence, and I agree that correlational evidence is low quality. A large randomized study on Omega 3 consumption would really help here, but in the mean time we have to use the evidence that's available.

(Though http://www.mayoclinic.org/drugs-supplements/omega-3-fatty-ac... judges the evidence behind the pills as "strong scientific evidence for this use" in several categories.)

I think, it's because FDA (or whatever the agency controls supplements) doesn't allow these statements.

"The Facebook folks countered that such specific targeting would be very expensive. Under Facebook’s auction system, advertisers compete for limited slots in the users’ news feeds; the more targeted the pitch, the higher the cost for reaching each 1,000 people. With only a small pool of targets, R.B. would be competing with other brands that wanted to reach those same people, forcing it to pay more to be the advertiser that won the slot."

If you go for the more general targeting doesn't that mean your ads are just going to be scraping the bottom of the barrel, served to people nobody else wants to target?

I understand how this is in Facebook's best interest but fail to see how it benefits the client.

If you know your customers are those who care about heart health it seems like targeting others and having to convince them first to care about their heart and then to buy your product seems like a huge barrier.

Is +2pts of people who say they're more likely to buy worth 4x the budget? Hard to say... "During the eight-week campaign, 18.1 million women aged 45 and up saw at least one ad, according to Nielsen’s research. That was 56 percent of the target audience. The number who said they were now more likely to buy MegaRed rose by two percentage points."

Seems like the classic media sales approach is alive and well, and that it's boosting Facebook's revenues. The issue is that the way that Facebook shares data (or rather doesn't) makes meaningful analysis possible. "the [Facebook] ad strategists were saying they wanted him to spend money to show ads to every American woman 45 and older on Facebook — as many as 32 million people."

no kidding...

If you read the article carefully, you would have saw that revenues were twice as efficient as traditional ads during the campaign. That's a big win.

Whether you can extrapolate those results to even more improvement by spending more on FB is debateable though.

That's according to one company's analysis which is not described in any detail. Worth noting is this:

> R.B. was also running TV ads, handing out samples and doing in-store marketing at the same time, but the company says the Facebook campaign contributed to the gains.

Don't get me wrong: there are some very smart people trying to figure the ROI calculus out. But that doesn't mean that producing solid answers is easy or even possible.

One of the biggest problems in my opinion is that few people involved have an incentive to come to the conclusion that Facebook ads aren't effective.

Facebook obviously wants to prove that its ads work. Brand marketers want to prove that the money they spend isn't being wasted. And the data/measurement companies, many of which count the brand marketers as clients and Facebook as a partner, wouldn't have a business if they concluded that there was no ROI.

The Upton Sinclair quote "It is difficult to get a man to understand something, when his salary depends on his not understanding it" is very appropriate to many aspects of modern day marketing.

It says twice as much as they spent on the ads. That's a measure relative to the ad spend, not a performance measure compared to their other channels or campaigns. Big difference.

"the campaign generated about twice as much revenue as R.B. spent on the ads"

Which is put into light by the channel cost comparison from the article: “I can go to television at a quarter the price.”

Is the channel cost comparison relevant given that we don't have the ROI of TV spend?

ROI for other channels vs FB would indeed be the missing variables that would give context to the article. Cost of channel (TV in this case) is part of ROI, and it's the only other hint provided.

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