You can certainly waste a lot of money doing it too. Getting the right message in front of the right user at the right time is a lot harder than people think it is.
The above is where there's a lot of smoke and mirrors in ad tech. But for advertising as a whole, it's not a massive industry because it doesn't work.
Guess that's why we need those brightest minds of our generation on the problem, as the saying goes, right?
That sentence gives me extreme Matthew McConaughey-in-Wolf of Wall Street vibes. After seeing you wrote that, I immediately assumed you very likely work in advertising. Sure enough...
I have no clue whether anything you've written there is accurate or not. Either way, this whole thing and this whole industry just looks, sounds, and feels gross and intrinsically empty. I get a much better and more wholesome feeling from the cryptocurrency industry, even.
Greatest minds? Maybe there are some, you'll find them everywhere. But I'd worry that the greatest minds are toiling away in academia chasing grants or working on things that they don't want to work on.
In the paraphrased words of Don Draper (Mad Men character), nobody grows up wanting to be in advertising. It just kind of happens.
The core of advertising is just getting some message about your product or service to a relevant audience.
A lot of companies offer that service, some more effective than others.
But yes, I started an ad-tech company that supports indie news publishers. Before that, I was offered a great gig at Yahoo (when it was still kind of cool) where I got into it. I honestly didn't seek it out but I guess I liked it enough to stick with it.
It's certainly hard to compare entire industries apples-to-apples. The worst parts of the cryptocurrency industry are definitely worse than the worst parts of the advertising industry. However, I personally feel like in an "average", "net", or "expected value" sense, advertising may be worse. But maybe it isn't; either way, all I was trying to say is I really just don't like advertising or ad tech, and I wanted to use a rather extreme comparison to viscerally convey that. (Perhaps a little like a kind of "bullshit-industry" analogue of Godwin's law - my comparison was somewhat tongue-in-cheek and bad faith, basically, but also kind of not, because I do like some aspects of cryptocurrencies while I like zero aspects of advertising.)
>that supports indie news publishers
Sure, and maybe someone else could've started one that supports starving children. (The originally posted article similarly mentions that one of their reasons for working on ads is "I give half of what I earn to the most effective charities I can find, and the more I earn the more I can give".)
These all feel like cop-outs to me. I could significantly support independent creators or starving children by running a cryptocurrency Ponzi scheme, but it still doesn't make it positive on net. The difference is that you and the article author simultaneously say that you feel like the work is inherently positive, too, which in my book just makes it delusional rather than dissonant or contradictory.
So I absolutely don't think you're at all behaving knowingly unethically; just unknowingly. I think part of the issue here is that it's generally only a tiny bit unethical, so it takes a lot for it to add up to being a-lot-unethical, and humans (including myself) usually aren't so good at perceiving these potential cumulative effects when they're upstream of it all.
>The core of advertising is just getting some message about your product or service to a relevant audience.
At the same time, I can't not acknowledge this. How can I fault a small business owner for wanting people to know they exist? There's some cognitive dissonance of my own, here. And at the moment I'm resolving the dissonance by disliking the advertising and ad tech industries rather than disliking businesses who place ads. (As long as the ads they place aren't annoying, deceptive, or malicious in any way.)
Maybe my opinion on all this will eventually shift a bit, though, because a lot of it's certainly more emotional than logical. At a very deep, subjective level, I just strongly dislike advertising and everything about it. It gives me nothing but negative feelings. Most of the cryptocurrency industry gives me negative feelings, too - but the industry as a whole doesn't give me nothing but negative feelings. Some part of it gives me neutral or positive feelings.
Not to get off track, but ultimately it's a subjective position. I could easily take the view that anyone working for Facebook is actively helping erode the privacy of internet users. Or, that anyone working for Google is furthering its anticompetitive agenda and stifling innovation on the open web.
Without my platform, there are some towns and cities across the US that wouldn't have a local news outlet or reporter to follow local government and uncover corruption. I have case studies on my website where the publishers say it themselves.
From someone else's point of view I could be deluded, but from my standpoint, I'm doing something very positive. I don't think someone has to actively seek out the most cynical perspective on their line of work.
Can you provide some pointers to that data (as the parent did for the contrary position)? Forgive me, but it seems you work in advertising, so I'm not sure if you're the most unbiased person to assert something like this without evidence.
But with many parts of digital, you can show certain pages of your website exclusively to those who have clicked on ads (ie. hide those pages from regular browsers).
In this way you can directly measure the direct effects of the advertising spend.
There are many businesses, including three that I own, that have grown as a sole consequence of social media advertising. We have not promoted these businesses in any other way (no SEO, no trade shows, nothing).
I'm not going to share my advertising accounts with you; I'm just going to ask you to trust that when I get my laptop out and show my results to my 'marketing skeptical' friends, they stop being skeptical.
Actual words, from one of these friends: "wow. That is like a money printing machine."
Consider for a second: how many advertisers that are actually succeeding are going to publicly call attention to their success? Would you?
The only hint is Facebook and Google's revenues. They go up, and I am one of the people who makes their revenues go up.
spoken like a true used car salesman
I'd like to be proven otherwise, so, here are my key points, which you didn't contend with:
-> It's possible to completely isolate the effect of advertising spend, thereby making the effectiveness (or not) measurable.
-> I pointed to growing revenues on Google/FB's platforms, two platforms which make isolated measurement feasible.
In terms of _externally_ verifiable facts, that's the best I'll be able to give you.
The rest, you (and others) have to take on a/ good faith b/ using basic logic, that I'm telling the truth.
Yes, I believe this is true. But also, I've heard that payouts per impression are going down precipitously. Desperate news sites are chock full of heavy ads because each impression pays less and less. Popular Youtube channels increasingly run their own integrated promotional content instead of depending on youtube ad revenue which keeps falling, even as viewership rises.
It's reasonable to suspect that as ad performance becomes perfectly measurable, payouts to content creators will asymptotically approach zero, because most ads don't work. Consumers spend most of their time looking at ads that don't work at all. That the occasional well crafted and placed ad does work isn't much consolation.
Direct sold digital advertising (OG, cutting ad networks out) is a different story.
Imagine, for example, that HN said they would auction off a single ad slot beneath the navbar to the highest bidder for the year.
How much do you think that would command? Do you think there could be sincere branding value (and actual performance) for the advertiser? I think it could be worth north of 1MM just to promote open jobs at a company.
If it was a clean, tasteful ad, and it was simply to support the cost of running HN, I'm pretty sure most of the audience would put up with it.
The common perception of digital advertising is network advertising. But the type of advertising that is the least annoying and most beneficial to both the advertiser and publisher is direct sold.
Though I don't doubt that you are right on the whole, this is a poor argument; homeopathy and other snake-oil are a massive industry as well.
That being said there’s plenty of waste due to politics, bureaucracy, bad tech and general mismanagement. It’s important to separate the concept from the implementation.
Are we being 5D-chess'd and it's working on all of us subliminally and subconsciously and we just think we're immune? Or is there some other huge population of people out there it's working on who actually somehow are real manifestations of the unfathomably-cringeworthy-to-utter "sheeple" / "NPC" trope or something?
One area I can see is more subtle word-of-mouth kinds of influence (organic or astroturfed), where someone may see a lot of their friends or people they admire using and recommending something. I can definitely be influenced in that way in some cases - that's kind of how interest in almost anything works, isn't it? (For a non-profit example, would I have become interested in Rust if I didn't see it positively mentioned thousands of times on websites I use for the past decade? Probably not.) But for traditional ads like banners and commercials and billboards, I perceive zero efficacy in my own case.
>It's in your TV shows, your news articles, your Instagram feed, your word of mouth, your everything unless you are in the forest
I think I, and some decent percentage of HN readers, may kind of be "in the forest". I don't watch TV, I don't read news articles, I've never had an Instagram account or any kind of social media account (besides more "pseudonymous" social media like HN and reddit), I have comprehensive ad blockers, etc.
I also don't really buy products. I buy food, maybe I'll upgrade to a new laptop or phone every 4 - 5 years, but otherwise I don't think I really "consume" new things.
The only thing I can think of that ads have consciously made me do is pay to get rid of them. For example, I pay for YouTube Premium so I can never see ads. (Ad blocking gets tough for mobile devices and casting to other screens.) They got me there, because I watch a lot of YouTube (which I acknowledge is kind of "the new TV") and in some ways it's the best $12/month I've ever spent. It doesn't cover video makers including sponsored content, but I use crowdsourced browser extensions to identify and skip those.
The great misunderstanding of this industry is that what ads you see are just as important as the ads you don’t see, which allows for profit maximization.
In your circumstance, it may be true that bank transactions are farmed and analyzed to be additive to data gathering on the web, which in turn is additive to the offline data gathering offered by various companies. Every transaction made is analyzed for location, merchant, purchase category, amount, date & time, and more.
Most of the other commenters who are claiming and linking to articles that ads don’t work aren’t in the industry. This is an important distinction because what we’re talking about here are the machines that crunch all this data are considered trade secrets and/or intellectual property. Also, slightly off topic, but it’s important to understand that ads != marketing. Ads are a child component of marketing. When you look at the overall function of marketing (of which product management is a discipline, no matter how desperately some attempt to align it to technology), then consider how much of a factor data analysis and operationalization of data is a driver of success for Fortune 500 companies. Almost any company in consumer technology (e.g. FAANG), consumer healthcare (CVS), telecommunications (AT&T), FMCG or retail (Walmart, Costco), and retail banking (Chase, Wells Fargo) are using these techniques to build better products, sharpen communications, and win new customers.
It’s like CGI graphics in movies. If it looks good then it just looks good and you definitely notice when it looks bad. Your average TV show probably has half the stuff on the screen being CG in some way but millions of watchers never know.
In a lot of Tech industry firms, the in-house expertise just isn't there to do this stuff and that possibly breeds skepticism. I've had fairly junior members of my teams head out to FAANG who've been shocked at how limited the depth of knowledge is.
On the other hand, brand recognition I do believe has value but is hard to quantify.
I also never click on an internet ad EXCEPT if it links to a price -not to buy.
Take paid Amazon reviews for example. This is advertising, just one of the most scummy possible forms of it. It's effective because people like me look to reviews to provide a third-party take on whether or not a product is any good. If I have a choice between two otherwise equivalent products, I'll pick the one with better reviews. But usually this just means rewarding the company that paid more to "advertise" on Amazon.
I realize you're probably talking about "real" organic mentions, but those are growing increasingly harder to find. A good example is the last time I bought headphones. I got suckered by a bunch of small review sites that had either been paid or gotten free samples in exchange for reviews. I bought two pairs, and when they arrived the sound from both was distorted. One pair broke within a few months. It was clearly trash that had been pumped using fake organic marketing. When I went back to find the sites that had provided the reviews in the first place, a few of them did mention (in very tiny print) that the reviews were paid. Me, suckered by advertising?! More likely than you'd think.
Back in the day, Johnny Carson reading an ad was convincing to the median consumer because they could be led to believe that the ad really was an endorsement of the product. That doesn't work any more, or not nearly as much at any rate. The basic strategy hasn't changed: it's still an attempt to find someone the consumer will trust. This is why, in my opinion, ads have always been and always will be bad, an attempt to subvert human rationality. Johnny Carson endorsing a product didn't mean that the product was good, it meant he was paid to endorse it. A review site endorsing a product nowadays doesn't mean that the product is good, it means they're paid to endorse it. In both cases the breakdown between what the consumer believes is happening and what is actually happening is the very thing advertising is trying to create, its raison d'être.
The niche ones have mods which allow genuine dissent as well as other recommendations from competing solutions.
Smart marketers don't try to get you to buy from an ad click. They want to move you one step down the funnel, which is usually getting your email/contact info if it's the type of product that has a longer nurturing process and sales cycle.
I have a pixel on my thank-you page. I manually delete placements and optimize creatives and angles and funnels and demographic targeting until it goes from making no sales to ludicrously profitable. This is an entire industry you know nothing about.
Big brands can be dumb but they do mostly have the tools to not be.
We are sold on the idea that they work, because someone clicks this ad, we track them, they buy the product, and we attribute the sale to that ad.
But we don't know whether the customer would have bought anyway. And some research suggests that, for the most part, they would have.
Steve Tadelis at Berkeley wrote a paper in 2013 demonstrating little to no efficacy of nine figures of ad spend at eBay.
http://conference.nber.org/confer/2013/EoDs13/Tadelis.pdf
This may not be true of all ads - ads for little-known brands, for example, may reach people who would have never heard of it. But the bulk of advertising bought by large brands may largely be a waste.
Advertisers still spend money because almost nobody is getting paid to rain on the parade. There's an endless stream of ad agencies, paid search marketers, marketing department staff themselves, CMOs, media properties, ad nauseam who are all invested in continuing marketing spend. A CMO will almost never declare that his department is useless. So they continue to make the case for their continued relevance.