[OtherShrezzing]

> “We were getting the full read of 2024 [data] midway through 2025, while we were planning for 2026,” said Vinny Rinaldi, vp of media and marketing technology at Hershey. “That alone is just not conducive to where marketers need to be.”

Irrespective of AI, it's astounding that companies have been throwing $2bn/yr at marketing, and their analytics data on that spend is delayed 6-18 months. That's nearly 15% of their annual revenues spent on guesswork. What's been going on over at Hersheys?

[jldugger]

Could be worse. Steve Levitt has a story about working out ad spend causality and actively ignoring the truth[1]:

> LEVITT: And they said to me "[...] One time we hired this summer intern and his job was to do the newspaper inserts for Pittsburgh, and the guy was so incompetent that he just didn’t do it. And when the C.E.O. found that out, he said, ‘If you ever do that again, you’re all fired.’

> LEVITT: So, I said to them, “Well, O.K. But when you looked at the results, what happened to the sales in Pittsburgh when you were dark for a month?” And they called me back about a week later and they said, “You’re not going to believe it. We looked at the data in Pittsburgh, and we saw no impact on sales when they didn’t do any inserts for a month.” I said, “Oh, my God, that’s amazing! O.K., so when can we get started?”

> LEVITT: They said, “Are you crazy?” It was almost if they found out they didn’t work, it was far worse for these people than it was not finding out it didn’t work. Because then they had to explain why for the last 15 years they had been wasting $200 million a year. So, they were happy to just live in a world in which as long as there were ads in every market, every Sunday, life was good.

    [1]: https://freakonomics.com/podcast/does-advertising-actually-work-part-1-tv-ep-440/

[glenngillen]

I remember meeting a founder who had a moderately successful adtech business who was venting about the difficulty getting very large brands with huge spend on board. This is probably almost 2 decades ago now before what many of us take for granted in terms of analytics, so direct attribution between spend and return wasn't particularly common.

He was having great success with small and mid-tier companies, then he'd run a pilot with a massive global brand and the results would be even more stark than what he'd see with his existing users. But basically could not close a deal.

Because of exactly what you've shared here: "they measured on how much the spend, not on how much they bring in. Because they've never been able to do that. Their job is so much easier if nobody can ever see that latter figure they just go year to year asking for more budget and the more they spend the more everyone thinks they're doing a great job". I was naive enough at the time to think he was wrong and that couldn't possibly be true. But I've seen enough in the years since to realise he was right.

[tantalor]

The word for this is "cargo culting"

[morley]

$2bn is their entire marketing spend, so it includes media buying, creative, in-store displays, PR, research, and anything else involved in the marketing mix.

FTA:

> The confectionery giant, home to brands like Reese’s and Skinny Pop, is working with the analytics platforms Mutinex and Tracer to automate marketing mix modeling — a statistical technique that measures how media spending and other variables drive sales — making it faster and more frequent.

So this system doesn't cost $2bn, it goes into the decision-making of where to spend the $2bn.

I agree that when you have a $2bn budget, it's hard to fathom tolerating a 6-mo analytics lead time, but I'm sure it's not alone, and I'm sure that's why this vendor lobbied Ad Age to cover this project.

[alexpotato]

There is the old quote:

"Half of my advertising useless. The only problem is that I don't know which half."

That was certainly true in the newspaper and radio days when attribution wsa difficult (although you could argue coupon codes etc helped.) Today, however, every online ad id attributable to a sale.

That makes me question:

1. Why do they keep spending money on things that don't work?

2. Why do they spend money on things they can't track?

I don't know the answer to #1 but folks I know who work in radio sales say that #2 happens b/c certain demographics are essentially not reachable by desktop web ads or even mobile. That's why they target radio.

[etempleton]

My guess is they have to wait to measure the downstream impact of their marketing. And marketing attribution is notoriously fuzzy. If a tv ad runs on may 1 what is the attribution window to someone buying a Hershey bar? How do you know they saw the ad? And that the ad influenced their purchase behavior? The answer is you really don’t do you come up with some kind of formula based a few assumptions.

Ultimately I am highly skeptical. Ad tech is almost always a repackaging of the same product with a new name. They may be using AI to help analyze the data, but I doubt it really has any kind of sizable impact.

[xnx]

Companies waste 80% of their marketing spend. They just don't know which 80%.

[asah]

This is CPG - things move much more slowly...

[nathanaldensr]

Waste and grift.

[Lionga]

To be replaced by AI, waste and grift.