[thirdsun]

Thanks for your insight.

Maybe I'm naive but how are these ads of any value to the advertiser? - nobody wants them, everybody ignores them. How can ads that surely almost exclusively receive accidental clicks be so worthwhile for publishers like you?

[dave_sullivan]

Advertising is a weird business.

There's different types of media: print, television, digital (banner ads). Print is dead (has been the increasingly accurate argument for 10 years now), television is expensive and untrackable, and digital is here to save the ad industry because that's where all your customers are and it's very trackable.

The value to the advertiser is either direct-action ("click here and buuuuuy!") or branding ("we exist, see!") Companies like Verizon, Proctor and Gamble, Johnson and Johnson, unilever, etc. spend billions on branding.

How does that money get allocated? Well, you've got a brand manager for, say, Acme Inc. Their job is "Get more people to buy" and they split their resources between creative--often working with big agencies (think Madmen, see AdAge)--and media buying. There's often pressure to spend less on creative and more on ad buys. And when ad buys don't perform, they say "We should have spent more on creative".

Media buying is basically buying banner ads (or tv or whatever). They're typically sold at a CPM (Cost Per thousand iMpressions), less often Cost Per Click.

So to answer your question: major brands have billions for branding and it's a bunch of people's jobs to spend that money and convince the people they work for that it's money well spent. And if it's not money well spent, they'll find someone who will tell them it is.

[manigandham]

> So to answer your question: major brands have billions for branding and it's a bunch of people's jobs to spend that money and convince the people they work for that it's money well spent. And if it's not money well spent, they'll find someone who will tell them it is.

I'll be the first to say there's a lot of mismanagement, incompetence, politics, etc that leads to this but it's also one of the most data driven industries around and there's a lot of proof behind the results. It's not all just random guessing.

[scottmmjackson]

I'll go even further: it's a big industry. Companies of all size and sophistication buy advertising in huge amounts.

You have some players who have honed their advertising strategy for years to try to get the biggest bang for their buck- and they're willing to pay to have professionals work out how to hone it further.

You also have unheard-of locals who have pinstriped sales reps telling them about how much money they're going to make if they buy this billboard or phone book page, and agencies paying big bucks to get the pinstripiest, salesiest representatives to the right suckers as efficiently as possible.

Then there's everything in-between for all the people who are in way over their heads but want to at least imitate the ones who are doing it right.

[shostack]

Despite all that data though, there's still very little in the way of a clear approach to figuring out cross-channel attribution, valuing view-throughs etc.

[manigandham]

This is a case of it being simple but not easy.

The technical strategies are pretty straightforward but it's all the business policies, silo'ed data, bad integrations/tech, privacy issues/constraints, and (the worst of all) politics and outdated thinking, that cause these issues.

Attribution isn't that hard, it's basic analytics and statistical analysis - but half the agencies don't have any understanding of math or tech and just use last click wins with some unreliable vendor and probably poor implementation which ultimately hurts everyone.

[shostack]

As someone who has invested countless hours reviewing attribution reports and has seen how it is handled by companies of all sizes (including up to Fortune 50 brands), I respectfully disagree with your statement that "attribution isn't that hard."

I have the fortune to also work with an incredibly bright Data Science team (several of whom have phenomenal stats backgrounds), and they all agree with me.

Many companies and agencies know last click has very real limitations. Likewise, for anyone that has started to go down the rabbit hole, you quickly find all of the other static models have similar limitations. Dynamic/data-driven attribution at the user path level is the way forward, and Adobe's econometric attribution modeling tools are the closest I've seen to getting it right. But even that has limitations (cost being just one of them). The free reports in GA and AdWords are a great start, but likewise have their own issues.

There are a LOT of variables in terms of sample sizes, data accuracy, inability to effectively isolate an experiment group due to other marketing efforts, etc. that all throw other major wrenches into this.

All of that said, I'd genuinely love to hear your solution for how to definitively solve attribution from an analytics and statistical analysis perspective. As much as I disagree with your statement, I realize I don't have all the answers, and if you have them, I (and many others) want to hear them.

Personally, I think this is the biggest challenge the industry faces right now. My gut says display and video CPMs are overvalued, but better analytics and better data are needed to really help advertisers answer the questions of things like "what is a view through worth?" or "how much revenue should I attribute to this display/video campaign?"

[kod]

> They're typically sold at a CPM (Cost Per thousand iMpressions)

M is for mille, not impressions

https://en.wikipedia.org/wiki/Cost_per_mille

[modded]

;)

[Someone1234]

I've ran ads before (via Google AdWords), we had a few motivations:

- Name recognition. We don't need people to click, we just need them to associate our brand with their need.

- Sales leads. They have a need, we have a product, it wasn't a massive sales boost in B2B, but it paid for itself.

- Push competitor's ads down. Diminish their brand recognition/leads/etc.

- Advertise on competitor's search results, show us as a legitimate competitor in the consumer's mind.

The ultimate goal is that people in the industry say "we've heard of you." Very targeted adverts are a great way of doing that along with social engineering and attending inter-industry events.

It might sound crazy, but it was better for us overall if people didn't click. We got more value out of passive advertising than active click-throughs.

It is just like waving your hands around and saying "we exist!"

[ocean3]

The ultimate goal is that people in the industry say "we've heard of you." - I have purchased items based on just that. If there are multiple options then its easier to choose the one you have heard before be it from a ad.

[untog]

> nobody wants them, everybody ignores them

While the former is true, the latter is not. And clicks aren't the only measure, especially where video is concerned. There's a lot of voodoo in advertising, but advertisers do look at their statistics, and see an uptick in sales/brand awareness/etc when they run video ads like that.

[merpnderp]

I'm no expert but I believe the clickthroughs are measured in tiny fractions. It is quite possible you don't know anyone who clicks on them on purpose, but that doesn't mean few enough people do it to not make money.

[ams6110]

I think most people here probably have your point of view. I certainly do. I don't think I've ever intentionally clicked on an ad. These days I am aggressive with ad blockers backed up by a local /etc/hosts file to neutralize the most common ad network domains.

But the general public? I don't know. I don't think a lot of people really distinguish between the ads at the top of a google search and the actual search results below (sometimes well below) them.

I think if the current model was not thought to have an overall positive ROI for the advertisers, it would have failed by now, or evolved into something else.

[nostrebored]

I find the idea in tech that "ads don't affect us" to be baffling. As others have pointed out, it's ridiculously effective and money well spent.

I think in very few cases (maybe Amazon ads are an exception) ads cause people to go out and immediately buy things -- but with constant exposure over time, the likelihood that you're going to buy something goes up.

Seriously, this is an entire profession, it's not voodoo, people aren't just sheeple, it works.

Much in the same way that research has shown (pretty conclusively) that exposing yourself to violent television over and over again makes you more violent and less concerned with violence happening around you.

[lopatin]

Do these ads really seem like they would perform worse than typical banner ads? You're right that accidental clicks may happen more often, but you don't pay per click. You said that "nobody wants them, everybody ignores them", which can be said about any kind of display advertising if you don't like advertising. At the end of the day, an ad campaign can be a smash hit with click-through as low as 1%, or even lower depending on what you're selling.