There are exceptions. I think Google search ad works so well it’s eating the product. I think YouTube’s TrueView is great for modern brand advertisers (safety issues aside). But by and large, banner ads, forced video pre-rolls, etc don’t work. The negative message of the format offsets any message you try to convey.
Yes, fraud is a part of this. But I think a lot of this evidence looks the same as if none of their targeted, performance-based advertising was doing anything at all, beside really weak branding.
Genuinely interested to hear from people who disagree.
Especially with stay-at-home orders due to the pandemic, everyone (well, not everyone... but hyperbole) now has their own drop shipping brands operated out of their basements, all selling the same cheap products off of AliExpress. Will consumers catch on to what is going on? Do they even care?
I suspect this really only works for more novelty things like clothing that are cheap enough to enough to impulse buy and of interest to image conscious people.
Also, the only ads I've clicked are mobile ads. I've even installed apps via ad before - I've never once purchased an item from an ad online (but I've also run an adblocker for a decade).
Ads certainly "work" by some metric, and some definition of "work", but I think the metric and definition is unclear.
Doesn't it? It may have miserable conversion rate, limited target audience but it apparently is commercially viable. People would hardly spend money on sending e-mail spam in 2020 if it didn't work.
so there's evidence that people (incl uber, a market leader) do indeed spend money on ads even when it does nothing
There's an allure to making something measurable and setting goals against it. Often, those goals take on a life of their own. That's what I am suggesting happened here, I guess.
Someone in this thread said no one has proved to them that digital ads are ever worth it. My experience is that when they are you don’t want to advertise it to potential competitors or the people who carry your ads.
CEO: "We need to do something about growth!"
Marketer: "Mobile ads are something!"
CEO: "I read those are hot. Here's a bucket of money! Do lots of something so we have lots of growth!"
[spending ensues]
As the Uber story shows, a lot of money gets spent without anybody making sure that it actually works. The actual goal is not to have an effect. It's to be seen as taking bold action. If the business gets better, bonuses and promotions ensue, no matter what the actual cause. Cargo cult management.
It sounds insane, but I'm sure it's rife. Years ago I was coaching at a Lean Startup weekend class. One team really killed it, rapidly testing product hypotheses through real-world testing. Their initial idea was quickly proven worthless, but they listened to users and came up with an idea that would sell.
I kept in touch with one of those team members. He went back to his prominent, well-funded startup, excited to improve his company. But nobody wanted improvement. Execs wanted to sit in a big room, think big thoughts, and produce specs. The engineers were to implement those specs. But nobody would measure the effects of anything. Proof that a grand poobah's idea didn't actually pan out was deeply unwelcome. It slowly drove my pal mad and he quit. The company bumped along for a few years to a modest acquisition, but it never really lived up to the hopes.
However, anyone engineering for advertising from the start of your distribution plans should be able to measure these things. It’s not hard to track which signups came from ad clicks versus organic traffic. The problem is that most companies start out focused on their apps and simply assume advertising is a totally independent function that happens elsewhere in the company. Invest some time into including advertising as part of your signup process and it’s really not that difficult to track LTV of customers who signed up via ads.
In fact, that’s how Uber confirmed this fraud. They noticed that some of these fake customers were clicking on the ads and getting signed up within seconds, which is something only bots can pull off. If the customers you’re getting from ad signups aren’t actually spending money in the app, you should know about this from basic analytics.