[depot]

Maybe I'm just a dumb hermit, but still, I frequently think: Is there real proof the marketing is worth the extra effort? Adblock is very popular. Most people seem to want the same things their friends get. Seems like the best place to get control is the influencers. But yes, I'm out of touch. I don't understand SEO much, but the result of that seems much more valuable. I think there was an article like this recently.

[somenameforme]

- The following is based on traditional (television/film/etc) advertising; I am assuming it holds true for internet based advertising.

There's some [literal] marketing 101 stuff most people aren't aware of. For large companies the value in marketing isn't really about directly selling you products, but about instilling a positive subconscious perception of a product in your mind.

Coke is the classic example. Dominant marketshare, defacto monopoly in many regions, and a loyal customer base. Yet they advertise endlessly and at great cost. The reason is so when you look at a bottle of Coke you don't think 'sugar, heart disease, obese people drink this' but instead 'crisp, cool, refreshing, athletic people drink this'. And it's all subconscious because of course we all consciously know its the former rather than the latter, but advertising can effectively make people do and think things that they might not otherwise. And there is significant research and practice to confirm all of this. Companies aren't just spending out of inertia.

This [1] is considered one of the most effective and powerful ads of all-time. It's Apple's 1984 Ad about the first Mac. A 60 second clip with zero information on the product/capabilities, zero information on pricing, etc. And Apple spent big on the ad (which was, for instance, directed by Ridley Scott) and tried to get it out everywhere, including in theaters. It seems like a completely absurd ad, until you understand how advertising works.

[1] - https://www.youtube.com/watch?v=VtvjbmoDx-I

[schnitzelstoat]

Yeah, but the actual evidence that brand marketing works seems pretty sketchy.

That's partly why since we've got better measurement tech in the digital ads space we've seen a massive shift to performance marketing and solid, measurable results.

I recently read "Subprime Attention Crisis" by Tim Hwang and he believes that even the performance marketing space could suffer a decline too - but he could be overly pessimistic in that regard.

[ItsMonkk]

Yep, the main argument for ads that they are for the population know about some new product is a classic case of the motte and bailey fallacy. Actually showing new products is the positive sum aspect of ads, and is indeed a good thing, but the vast majority of the ads out there are not those ads. The vast majority of ads are brand ads, and brand ads are nothing but zero sum prisoner's dilemma wastes of time and money that helps no one. If you could somehow outlaw brand ads, everyone except the service that hosts the ad would be better off.

[vnorilo]

I've seen a handful of cases where a small software house with very limited name recognition that provides some genuine value to customers gets a big bump from advertising targeted to "lookalike audiences" on facebook. Some of these shops run either 0 or 1 ad campaigns at any time, so the correlation is actually visible and quite irrefutable.

However, that is also the exact type of adtech that is extremely dodgy in terms of privacy, because it thirsts for data. I'd love the whole thing to end in favor of some genuine user recommendation system. But as always, any ranking system that drives revenue will be gamed to no end.

[coder-3]

It's case-by-case. You can calculate whether ads are worth it for what you're selling by using cost per click, conversion rate and customer lifetime value.

My general sense is that paid ads is still valuable for niche markets as the ad will be cheaper and ad platforms allow quite specific targeting (they do gather huge amounts of data after all). It's probs too expensive for big competitive markets.

As an aside, it's quite risky to rely too much of paid ads as your business becomes subordinate to the whims of Google, Facebook etc.

[lordnacho]

I actually tried making a little web shop in order to learn about this.

Turns out with barely any knowledge in the area the ads more or less brought in the money they needed to break even.

[shostack]

Savvy advertisers measure incrementality. The short answer is yes, it can work. The longer answer is that it is hard to do right, and getting good signal to feed into incrementality models is increasingly hard for advertisers for obvious reasons.