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simonsarris
mbesto
> The main problem here is that if Williams Sonoma was not advertising on that search term, Lodge and Food52 etc etc would, and then those companies would be above the Williams Sonoma organic placements.
This is what is known as "on brand" Search ads. I like to call these effectively the "Google Tax" because publishers/retailers are forced to pay Google for the traffic they would have already received had the ad not been there.
I've seen way too many companies look at their analytics and say "see we get 20x ROAS on on brand! why would we turn it off?!?". Because silly, people are already going to go to your site without you paying for the traffic. I wouldn't be surprised if 25% of Google's ad search revenues come from this.
worker767424
It's not a tax, it's a protection racket. You wouldn't like it if someone looking for Williams Sonoma saw results for Sur La Table, would you? Pay up.
usrusr
Put some money on the altar, who knows what might happen if you don't. The Algorithm is only impartial until it isn't. You surely don't want to go to irrelevancy?
vkou
An ad directing shoppers to your competitors who pay them is not a protection racket, no more than a travel agency directing travelers to businesses that they have a relationship with.
It's the entire business model of aggregators and intermediaries and middle men, which compose roughly half the world's working population.
syrrim
Google is offering a service, namely a way to connect your customers to your website. Arguably, on brand ads are just a way to pay for that service.
alisonkisk
What right does Williams Sonoma have to demand Google provide a web index for free?
Puts
Sometimes I click on Google ads just because I don't like a brand and feel a little bit of joy knowing I just cost them a dollar.
drevil-v2
Way more than a dollar. If you really want to cost a company a pretty penny, click on the ad after searching for an "intent" to do something rather than the exact brand. Some of those Adwords cost many tens of dollars.
titzer
I've done that once in a blue moon, but it doesn't really accomplish anything except transferring that money to Google. Since I used to work for Google, thanks, I guess :-)
gumby
Marvelous! I'll do the same. Watch out, Exxon!
I mostly click on ads as chaff (mostly I block them but sometimes unblock them just do do some random clicking in the hope of confounding some profiles being compiled on me)
coredog64
I used to do that with mesothelioma law firm ads.
thomasahle
> I like to call these effectively the "Google Tax" because publishers/retailers are forced to pay Google for the traffic they would have already received had the ad not been there.
Isn't this just the usual problem with advertising? You have to do it because the other players are doing it. If nobody did it, it would still be the same cake to be shared.
This case is more on the nose, but only because of some fairness assumption that "Williams Sonoma Cast Iron Skillet" _ought_ to be traffic for Williams Sonoma.
finnh
> Isn't this just the usual problem with advertising?
Not quite: OP's point is about searches that specifically include your brand name. The "usual problem" with advertising in the zero-sum sense you propose is for eyeballs in general (billboards etc). The google tax here is more invidious, being specifically about searches that include your brand.
mc32
When people search Pepsi Cola they expect to get a link to Pepsi or information about it. They don’t expect to see Coca Cola or RC Cola, etc. now in this case Pepsi makes sure search isn’t polluted by paying Google good money to always be the top results for that term.
Now, if you searched on the generic ‘cola’ or ‘soda pop’ then yes you expect to see those who bid higher to be at the top and at the bottom those who bid nothing unless organically somehow they ended elsewhere.
closeparen
For staples, maybe. Advertising also gets people to buy things that they would not otherwise buy.
jayd16
>pay Google for the traffic they would have already received had the ad not been there.
But this line of reasoning begs the question. If this system wasn't in place, then Google search would not exist as it does and the search traffic would not necessarily exist in the same way, no?
mbesto
> Google search would not exist as it does and the search traffic would not necessarily exist in the same way, no
yes and no. Google search didn't have as intrusive and competitive ads as it did before and the search function was effectively the same. Nowadays, if you search "Williams Sonoma Cast Iron Skillet" you get 5~6 ads and 2-3 scrolls to get to the real organic results. 6~8 years it was like 1 ad and you could see the first result.
tshaddox
I don't see why the search engine would work differently or be any less popular if Google used its algorithms to determine intent (that's Google's whole thing) and then automatically (or via human moderation) prevent companies from showing ads when there is clear intent to find another company's brand. Google would be somewhat less profitable, perhaps, but the search product would still work fine (arguably even better) for the people searching.
aerosmile
I agree with the rant how Google introduced a tax that wouldn't have existed in a world without Google. And, technically speaking, it would have been possible for Google to not charge for that tax (but would you have done that in their shoes? It's not like their market share is suffering).
But if you are implying that brands should not invest in on-brand search campaigns, then this is a really bad advice. It's a known fact that targeting your competitors' branded terms is ROI positive, which definitionally means that the affected brand is unable to capture all the customers who were initially searching for it.
mbesto
> But if you are implying that brands should not invest in on-brand search campaigns, then this is a really bad advice.
I'll be more explicit - you should test the difference. I usually recommend companies do a blackout month where they turn off all programmatic ads and then do a like-for-like comparison.
To further emphasis my point before, I've seen ad ops agencies say "hey you've got an overall 15x ROAS" and then find out that 80% of their ad spend is on-brand (give them 25x or whatever) and the off-brand (which is 20% of the spend) is giving them 5x. So their ROAS is inappropriately distributed to try to reach an overall ROAS goal.
btown
It’s less the Google tax than the “advertising is now efficient” tax.
Any other medium would theoretically have the same problem: if Ovaltine doesn’t sponsor kids’ radio shows in the 1950s and someone thinks they can deploy capital to grow a competitor, that someone will buy that slot. People couldn’t do this because there were human processes and relationships slowing this marketplace down. The thing that Google did was make it possible to test this at small scale.
ohyeshedid
They weren't bidding on keywords, though, just airtime.
That's an entirely different advertising model and market.
aesyondu
I purposely click the non-ad link when searching in Google (because I'm too lazy to type the full url). Does that help at all, i.e., prevents unnecessary ad spend from bidding?
hn_throwaway_99
I do the same, but 99% of people do not, so it's really a drop in the bucket.
I do wish there were some regulation such that if a user is searching for a trademarked or copyrighted term, that the best organic search result for that term should be required to show up first. I'm fine with showing competitor ads, but I don't think they should be able to show up above the trademark owner's ads.
account42
Why not go a step further and configure your browser so that the ad links are not shown at all? Only takes a couple of clicks.
https://addons.mozilla.org/en-US/firefox/addon/ublock-origin...
https://chrome.google.com/webstore/detail/ublock-origin/cjpa...
zaphirplane
Is the premise here I search for “ford electric car” get 3 ad for other makers, and ford in the top 1-2 search results
So I click on the Toyota ad cause it’s on top, and buy a Toyota? Which is taking business from Ford ?
What is the answer, no ads hmm that’s not happening on a free search engine.
Mark the ad as an ad hmm done
Don’t show other results for any brand related keyword search, when all keywords are blocked probably nothing left to show
What should the ideal free search engine show when I search for “intel vs AMD”, should intel complain the first result is for a tech site.
I do genuinely wonder if the conclusion that the brand company lost money is valid, I do wonder if those searches are like ppl putting cnn in a search bar or generic searches
imagine you are driving to a specific restaurant see a billboard ad for another restaurant so change directions and go there, would you dislike the bus/building with the sign
dublinben
Defensive spending to protect otherwise organic traffic could also be called extortion.
earthboundkid
Forget about the corporate POV for a second, as a user, if I'm searching for X, I probably want X in my results, no?
It's the fundamental contradiction in Google's search ads model. If Google delivers users the thing they want, ads by definition have to be things users don't want.
lifeisstillgood
>>> If Google delivers users the thing they want, ads by definition have to be things users don't want.
Ben Evans has a tweet something like "half of facebook devs are working out how to code the algorithm to serve you just what you want to see, the other half are working out how to get the algorithm to serve you what advertisers want you to see. "
We are doing something wrong
inthewoods
This is the fundamental issue with all advertising-based models. Eventually, they all run into the problem of having to continue to grow. The only way to continue to grow is to display more ads, thus compromising the user experience, which starts the downfall. AOL was a great example of this. Google seems to be heading this way.
Google's original values were the ability to provide better search (common answer) and be fast (less common answer) - both of which were a complete contrast to the Alta Vista and other search engines. I could easily see Google facing disruption from a new player - but I don't think it will be another search engine. Probably a paradigm/systemic shift.
fabianhjr
Advertisements are fundamentally not what search service users want regardless of searching for a specific brand or not. (Its what advertisers want others to want)
tomjen3
I don't think it is that clear, actually. If I sell a car that is as good as the Ford one you searched for, but 80% of the cost, wouldn't you want that ad to appear when you searched for ford?
lern_too_spel
If you search for Hello Fresh, you'll get a Hello Fresh ad offering 14 free meals. If you search for Blue Apron, you'll get a Hello Fresh ad for 16 free meals. Firms are willing to spend more to win incremental business from a competitor, and consumers benefit.
Now you could argue that the search engine should show organic results to help the consumer get the best deal, and I would agree with you.
thegrimmest
Right, but you may also be interested in an ad from a competitor for a similar product, especially if they were differentiated by price, no?
computerphage
My "by definition" detector has fired. It says: that's not true by definition. Ads could instead also be things that users want.
I do actually think you have a good point.
matsemann
Worst part is that the competitor has nothing to lose, so they basically will spend the whole margin of a sale on the ad. Which means that the original company has to do the same.
Where I worked before, Google could get $4 for ever $1 we made. And we actually delivered the service, and people googled our name. Pretty crazy...
gingerlime
Exactly. And it's bad for customers too. My mum (70) just fell for it, and she's pretty clued about computers and technology. She searched for a flight with Ryanair, so entered Ryanair on Google. First result was some scummy reseller, which sold her the same ticket for a higher price with some "extras".
Bidding on a competitor's brand name keyword should be banned. But Google can't resist double-dipping.
thegrimmest
I mean.. RTFM? Look at the address bar? The branding of the site? Pay attention and be careful? This stuff only works on 70 year olds. It stands to reason it won't be viable in a few decades.
pradn
This should be allowed, because this means smaller competitors have a shot at the customer base of a more established competitor. If we ban it, it's just shoring up established players.
desmosxxx
+1 this has happened to me before and I've ended up buying from a competitor before. We should promote competition.
colinmhayes
Freakonomics had an episode with an economist that worked with Ebay on ad buys. This sort of "buy ads on your own keywords" was shown to have zero impact on sales to the point that they cut completely stopped advertising when the search included "ebay".
bombcar
This will work for someone like eBay (people searching eBay want eBay) but for other "brand-name" terms it may NOT work - people searching for Travelocity or whoever is the hotness there may be perfectly happy with the first "similar enough" link.
colinmhayes
There's no way to know until they do an A/B test like eBay did I guess. EBay was certain that they needed to do the on brand ads before this economist showed up too.
kposehn
eBay is a strong brand where people searching for eBay are going to click on eBay, almost no matter what. For other less recognizable brands or crowded categories, this is often not the case.
Branded search terms are almost always less incremental than non-branded (ie: "lodge logic" vs. "cast iron skillet"), but the actual incrementality of the terms is something every advertiser should be testing continuously.
ameister14
Yes, when you're doing general brand terms that's true, but when you have a specific product in mind that's no longer the case.
Lewton
I just searched for "ebay" on google and the top result is an ad for ebay.com?
NikolaNovak
As an end-user, the results are insane.
Opening google in incognito mode:
If I search for "Toyota RAV4", the first (ad) result is "Hyundai Tuscon". If I search for "AWS Cert", my first (ad) result is "Microsoft Learn". Et cetera et cetera :|
whimsicalism
What? That's not the case for me in incognito.
winternett
There is absolutely nothing independently governing and monitoring whether performance is correct on ads. It's all done in private, and you're forced to compete against SEO and many other things to succeed on a daily and even minute-to-minute basis.
This is the real price of a constant threat to Net Neutrality, and allowing one monopolistic company to dominate mobile devices, web browsers, search results, and the largest video service on the entire Internet.
Their plan to corner and manipulate what everyone's freedom of choice and to secure their funnel of permanent revenue is considered cute to investors, but no one realizes how bad this will get in 5 more years.
Of course the numbers are fudged when you consider how they've turned analytics on their once very useful platform into a confusing mess, and when they announced that they were going to retire the system after it has killed off competition, because they can simply gather any analytical report they want privately from their web browser.
Public front-end statics are no longer trust worthy because they can be manipulated to drive platform revenue and engagement. The best and most accurate stats are provided only internally, to executive leadership that owns platforms.
Because we now use them for email, video views, browsing, phones, etc, they have key insight that can even be used for corporate espionage, your ideas can literally be beaten to market because your virtual assistant caught you mentioning keywords then reported you applying for your patent and corporate loan.
Most people have no idea about how bad this all can get. We'll find out soon enough though.
When ad revenue drops on platforms, the platforms simply reduce organic visibility which drives the need for regular ad spending for companies in order to remain visible on social platforms... AirBNB is riding a wave of prior popularity and name recognition, I guarantee they will go back to a certain point of obscurity at some point because they reduced their ad spend, and then be forced to promote heavily as they did once before.
It's all creates a new cycle of financial deception and manipulation on platforms. For very profitable companies, advertising is usually manageable, but for startups, for small business, and for independent creators, this practice is devastating financially, and fruitless on top of the financial loss of paying for promotion. These platforms also made promises to woo users based on free organic growth, which somehow conveniently disappeared due to covert and convenient EULA updates over time.
bambax
So in a way, big advertisers that are leaders in their markets would be favorable to adblockers, because they free them of the need to do defensive advertising.
One could argue that no advertising is hard for the challengers, but in today's situation they are outspent anyway, so what do they have to lose?
The conclusion is that both incumbents and challengers would be better off in a world where no advertising exists.
account42
Yeah, it's mostly a prisoner's dilemma where if someone spends on ads then their competitors also have to spend. The only one really profiting in the end are the ad companies.
naravara
> The main problem here is that if Williams Sonoma was not advertising on that search term, Lodge and Food52 etc etc would, and then those companies would be above the Williams Sonoma organic placements.
When you put it that way this sounds like racketeering.
Kalium
If you take as a foundational assumption that the brand name in the search string means the traffic is in some sense owned by the brand, then you're absolutely right. It's essentially racketeering. Certainly brands often view traffic that way.
Personally I resist the idea that a brand owns my attention because I used a keyword, but that's one of my many personal quirks.
naravara
It's a little dicer in the cases where we can pretty much infer that they're trying to get to a specific thing and would have happily used a direct URL to the page if they had the wherewithal to do so. In this case the ad placement is basically a brand trying to hijack my attention while I'm in the process of seeking a thing out.
I struggle to think of a meat world analogy. It would be something like if I dialed my girlfriend up on the phone and, instead of routing me straight to her, I had to navigate through a switchboard asking me "How about talking to these sexy singles in your area instead?" And in order to prevent this, my girlfriend would then have to pay the company to route my call straight to her.
Of course this isn't a perfect metaphor because there's a lot of different ways people use a search bar, especially now that search bars are merged into URL bars. But that sort of gets at what it is about this that feels sleazy.
tremon
Personally I resist the idea that a brand owns my attention because I used a keyword
What kind of keyword are you referring to here? Because brands do own certain keywords, they're called trademarks. If you don't want a brand to feel entitled to your attention, don't include registered trademarks in your search query.
(Yes, I know, trademarks are limited to a specific market segment. Doesn't invalidate the basic premise of searching on trademarks though).
1vuio0pswjnm7
Similar principle applies to
- review sites like Yelp (interestingly one of Google's loudest antitrust critics)
- domain names (arguably the entire ICANN generic top level domains sell-off)^1; US trademark grantees who fail to take action against confusingly similar domain names risk losing trademark protection
1. The gTLD application alone as $185,000 (https://en.wikipedia.org/wiki/Gtld)
In the case of Google and Yelp, the tech company can manipulate the alleged "algorithm" (read: no humans involve so you cant sue us, haha) behind the scenes and determine the "visibility" of the ad/review.
Ads are the perfect "business model" for tech companies because there is so little scrutiny of the ad services delivered. It is like philanthropy. When we make a donation, we generally do not track what happens to the money afterwards. We get a warm fuzzy feeling from making the donation as it is "doing the right thing". Then we leave the recipient to do as they please. How many companies buy ads on Google because they feel it is "the right thing to do". How many feel their donation was unwarranted after the ads fail to produce results.
Defensive ad purchases, defensive domain name registrations and even defensive gTLD purchases are one side of the coin. Another is the "winner take all" line-of-thinking (80/20, network effects, etc.) that tech companies worship that they in turn project onto customers. Competing for visibility on a fully searchable web of enormous capacity presupposes (artifically) that visible space is scarce. Ad auctions for the purpose of placing an ad on page one of hundreds of thousands of pages of results. The truth is that many people used to read newspapers from beginning to end. The whole paper, not just page one.
In a physical newspaper, there are ads on many pages. Often there are in fact no ads on page one. How many Google customers are encouraged to purchase ads that will appear on SERP #2 (do they even have ads on SERP #2). Imagine if newspapers tried to create a bidding war for page one of the physical newspaper. With the online versions, it seems that is exactly what happens. Do not blame the newspapers, do not blame Williams-Sonoma, blame the "tech" companies. This only reflects the pathetic "tech" company psychology, not the thinking of the businesses who give them money for online ad services.
aerosmile
There are so many holes in these arguments that you could drive a truck through it. Which is so infuriating, because a big part of my professional career consisted of watching all of Rand's SEO videos and really appreciating them. I really thought he was a genius. But then over the past few years, he started sharing more general views on entrepreneurship, and those takeaways just didn't really make much sense. Basically, his own VC-funded company turned into a shit show and suddenly he started advocating against VC in general (as opposed to taking an honest look at the mistakes that his company made). So in the past few years, I tried to reconcile in my head: how can a genius make such imperfect conclusions? My initial takeaway was that he's blinded by his own mistakes and shifting the blame, which seems perfectly reasonable and understandable. Frankly, I would probably feel and act the same way.
But after reading this article, it finally dawned on me. He makes imperfect conclusions in everything he touches, it's just that in some fields those conclusions can be more easily proved to be wrong than in others. SEO is the perfect field where a polished presenter can get away with imperfect conclusions for years - trust me, I know, I made a living for years in this field, and I am very familiar with the nature of this work. Most of the time, you have no idea what the black box really does, and instead you're just trying to guess what might have happened. Most importantly, there are many ways to skin a cat in SEO, and just because your approach is net positive doesn't mean that you truly are delivering the global maximum (or that the net positive gain was ROI positive). In short, it's impossible to know who's right and who's wrong, and Rand's videos convinced me that he's right, but I am no longer sure. I just rewatched one of them, and can easily see how his conclusions are just... opinions.
While we may or may never find out if his SEO opinions were the global maximum, we can quantifiably demonstrate that his opinions on content marketing are not solid. This whole essay he wrote can be replaced with "hey performance marketers, don't trust the platform numbers and instead do your incrementality studies." Platforms like Facebook will give you those for free if you reach a certain spend level, and you can also get them from 3rd party providers like measured.com. In other words, if you're a performance marketer and you're not conducting incrementality studies, then you're very early in your career and are not following the best practices. Simple as that - no need to extrapolate from there and reach all sorts of additional conclusions (which is obviously a pattern in Rand's behavior) - calling into question a perfectly investable marketing channel, conflating the needs of a public company with everyone else's needs, using words like scam, etc.
I am really disappointed to have to write this, but you would have been better off not reading this article. If Rand is really advocating that the majority of entrepreneurs should follow his advice and focus on PR instead of performance marketing, then perhaps an honest thing to ask would be - how is that working out for his own company? AFAIK, SparkToro is nowhere close to replicating the growth of his previous company, which is honestly disappointing for someone with such a huge reach and name recognition.
ChuckMcM
Can I politely suggest that you share with us the holes you see in the arguments and how you see them? Whether or not Rand is any good at what he does or says will be clear by your expert disassembly of his arguments.
aerosmile
- Brian's comments about Airbnb's approach to performance marketing are used to imply that Airbnb's lessons apply to other businesses. Very few businesses - especially those that start from small numbers and need to grow them - have 90% of their traffic mix come from repeat customers. Using Brian's comments helps fuel the narrative that brand marketing is a better investment than performance marketing, which is correct in some cases (Nike, Airbnb), and not in others (most startups). Also, as another member pointed out, Airbnb's performance marketing budget is still well over $200M/year, which no responsible/public company would spend if it wasn't returning a great ROAS. Finally, Airbnb is known for all sorts of marketing shenanigans in their early days, and they certainly can't take the credit for a pure brand play.
- Calling performance marketing platforms a scam (repeatedly, both in the title and in the narrative) doesn't explain how those same performance marketing platforms are carrying the majority of traffic acquisition in most of the B2C companies that went public this year (and practically all of the DTC ones). Calling into question the accuracy of measurement is one thing. Calling it a scam is wrong and designed to rank on HN rather than to be reflective of the true value of those platforms.
- As I pointed out in my original post, all you have to do is use incrementality studies and 98% of the criticism instantly goes away. Rand implies that you have to do your own studies (by eg, following Avinash Kaushik's methodology) which is 100% wrong - Facebook will do them for you if you reach a certain spend limit, or 3rd parties will as well with no spend limits. Also, from experience, this really becomes an issue once you spend meaningful amounts on two platforms at the same time. His rant on this subject has an iota of truth and a whole lot of sensationalism mixed together, and overall leads to wrong conslusions.
- He conflates "paid search" with "all performance marketing platforms", including "paid social." It would have been helpful to point out that the challenges with branded terms are entirely isolated to paid search and have nothing to do with paid social.
- My favorite sensationalist tactic: frame a strong accusation as a question. This way you get the clicks, but you can still cover your ass by linking to resources that with enough research would allow the reader to answer the question with a "No." But in lieu of that research, the implication is that the answer is a "Yes." You'll see this tactic used by less reputative media sources, and I was disappointed to see Rand do the same.
I could go on but hopefully this will suffice.
inthewoods
"Also, as another member pointed out, Airbnb's performance marketing budget is still well over $200M/year, which no responsible/public company would spend if it wasn't returning a great ROAS. Finally, Airbnb is known for all sorts of marketing shenanigans in their early days, and they certainly can't take the credit for a pure brand play."
My experience is exactly the opposite. The larger the budget, the less real hard analysis is done. This is especially true with the rise of attribution modeling which allows marketers to essentially motion blur the data.
lostinquebec
Your first point is very hopeful, but not what I've experienced. The bigger the company, the more slack for bad decisions.
Your other points I think relate to scale. No advice can be universal, and if you read the article as absolutist, your take makes sense. If you read it as "hey, your mix is likely wrong", a lot of the criticism fades.
I think we've lost a bit of creativity in marketing. The Lego movie example is a really good one. I think it is probably good this happened, as a lot of creativity was performative (how do I win an ad award/impress my peers) and not about increasing sales, but we've perhaps shifted the balance too far, and there is likely some areas with good ROS that are now better bets.
NumberCruncher
> Rand implies that you have to do your own studies [...] which is 100% wrong - Facebook will do them for you
So FB, who earns on my spending, offers me to measure for me whether my spending makes sense for me. Why would FB ever tell me to spend less? Don't they like money?
dsizzle
To your point that AirBnB's and other global brands don't extend to most businesses, Facebook's recent outage provided such an experiment and indeed a lot of small businesses saw massive effects https://mashable.com/article/facebook-outage-small-business-...
croes
>Also, as another member pointed out, Airbnb's performance marketing budget is still well over $200M/year, which no responsible/public company would spend if it wasn't returning a great ROAS
That's not really an argument. You wish that a responsible/public company wouldn't do that but we have seen much dumber behavior.
engineeringwoke
People on this board love the idea that anyone who isn't an engineer is an idiot and everything that everyone else does that isn't writing code is somehow worthless. In broad strokes, they think that all people who do people-facing work are charlatans that are constantly trying to hide how worthless they are because talking to people, etc. can't possibly provide value. Then, they (like so), ask you to break down your arguments so they can pin the tail on the donkey that is the logical fallacy that they will use to discount your (almost certainly correct and informed) opinion.
Unsurprisingly, those people are wrong and marketing works.
photochemsyn
It's also fair to say that if you let the marketers drive business decisions it's a recipe for disaster. Pushing low-quality product out the door just to hit some quarterly sales goal, that's what marketers will push. Epic failures with disastrous long-term consequences are the typical result (Boeing MAX for example).
poetaster
Hmmm. Marketing works!? Well having been a sucessfull .com era ad co. founder, I suceeded in raking in the cash of the uniniated (automobile, etc, so no tears) only to see companies literally obliterated by marketing. TV was then still 20 times the spend. Still, marketing had 0 clue. Fun to drink with at the theatre, sure. I was CTO, so, shrug? No, I was incensed and tried to talk other managers client side out of giving ME money. I know some clever people in marketing, but when they smell budget, it's a movie shoot in the sahara time.
I do think things are better in some sense today. But it is a hungry beast, marketing. Oh, and lies and statistics.
bliteben
you don't even have to be polite can't believe I read that whole comment
aerosmile
Rereading the post, I agree it came across as more personal than it should have been. I wish I was able to frame it more as a response to all the people advocating for alternative marketing ideas which frankly never work out. Instead, I brought in his own company into the narrative, which was below the belt. I know first hand how hard it is to get something to work, and how unlikely it is to happen time after time. I wish I could edit the comment, but HN won't let me at this point.
beervirus
That was an awful lot of words. Too bad none of them had anything to do with what you think this article gets wrong.
aerosmile
It would have made the post even longer. But I corrected that in the child post. Hopefully that clarifies it.
bborud
I worked on several web search engines in the 2000s. During that time I ended up next to someone who was in the SEO business a handful of times at dinners or meetings. When they explained what they were doing to me I kept thinking "this kind of explains how belief systems and religions are formed".
You would have these very complete theories of how search engine ranking worked - completely disconnected from reality and unburdened by any actual knowledge. If there was ever a cargo cult, SEO was it.
I still cringe when people say that they have "done SEO" on their site while I'm in the room. It is kind of like telling their mechanic they've sacrificed a goat so their car will get better mileage.
rchaud
What's wrong with saying someone's "done SEO" if everyone at the table has the context for what that entails?
Content strategy, keyword research, Search Console integration, site speed improvements, local search business profiles -- all of these contribute to SEO. It's unwieldy to talk about them all, so sometimes people can use a shorthand.
bborud
I cringe because usually they will be talking about things that come out of what can only be called superstition and they tend to think that's it. Meanwhile, I would be sitting there and knowing a great deal about exactly what goes on when whatever web search engine i was working for at the time actually did, and not being allowed to discuss any of it.
I'd always give the same advice. Don't try to outsmart the search engine, focus on quality and consistency over time. That will always reward you in the long run. Try to game the search engine and you will find yourself in a weapons race you can't sustain over time. If you find exploitable tactics to get better ranking than you deserve, sooner or later you'll probably be pushed down the ranking. And this is really important if you're successful enough to have something to lose.
Some of what people label SEO is just "make good web sites", and that indeed works. But some of it is just pure rubbish. And making a good website isn't just "doing SEO" - it is making a good website. And a lot of people don't.
Which is why I can't take people seriously when they present it as some singular task they have completed.
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lifeisstillgood
Incrementality studies: https://www.adroll.com/blog/marketing-analytics/beginners-gu...
Interesting article
1. "industry" is moving away from last touch attribution (pretty much what Rand complains about)
2. "Incrementality strives to identify the causal event of a conversion,"
The way to identify the causal action seems to be :
errr ... that's difficult
aerosmile
You linked to an article that offers no guidance on how to actually do it, which is more indicative of the article itself than of the methodology. One of the vendors in this space has a good amount of content on this topic, which you can find at the bottom of this page: https://www.measured.com/. Dislaimer: I have nothing to do with this vendor or the industry in general (apart from successfully spending money on performance channels).
lifeisstillgood
My apologies I should have prefaced it with "for others confused as to what incrementality is all I could find was ..."
It's a surprise to see a vendor have a clear explanation on their site however - and it's worth quoting i think
>>> Incrementality testing creates an experiment that systematically withholds media channel exposure to a representative subset of users (the control group) while maintaining normal media channel exposure to the broader user set (the test group). If the control group is both sizable enough to be statistically significant and selected at random such that they are broadly representative of the user base, then the media channel’s incremental contribution can be determined by the difference in business outcome (conversion, revenue, profitability, etc.) between the test and control groups.
135792468
Don’t know who you are but your path and journey in the industry sounds exactly like mine.
ssharp
I was at one company several years ago and made two big changes to digital advertising:
#1 - Eliminated all paid search other than some limited branded search terms and shifted all the money to affiliates who were way better at making profits on the keywords we were competing on
#2 - Eliminated all display advertising after running numerous experiments showing it provided almost not incremental conversions, even though the platforms happily took credit for them.
Those two things drove our blended CAC down substantially and by building better affiliate relationships, sales actually increased.
The lesson here is that you need to try a lot of things out and you should be continuously questioning what you're doing and running specific experiments to gut check effectiveness of any ad platform that is slapping cookies on wide groups of users and claiming conversions.
My suspicion is that this is near impossible at any large organization, even one as new as Airbnb. I can just imagine someone walking into a team of 20+ performance marketers and suggesting they need to experiment to determine if any of it is remotely effective. COVID forced them into this but it's something that they should have already been doing.
I also suspect that the top line focus/obsession of most VC-backed companies make this type of exercise seem almost counterintuitive. Don't mess with or question the momentum.
inthewoods
Performance marketing is essentially the only way most startup marketers can go. The reason is that they generally have 6 to 12 months to prove themselves as performance marketers. Generally the CEO has sold some insane growth model to the VCs. As a marketer, you do the math: $ growth required/ASP = number of deals. You get to your lead targets by reversing the funnel (Closed Won -> Opportunity -> Lead). And you see you need a sh*t-ton of leads to ever get close to hitting that number. And you need them quick because the number just bigger every quarter. So you can't even think about long-term approaches - you have to grab at tactics that you know can maybe generate the number of leads - even if you know in your heart-of-hearts that they won't generate anywhere near the number of opportunities.
This is all just my opinion and I'm sure there are better marketers than me that make this work, but this is what I've seen happen in too many VC-funded/backed companies. And it gets even harder when we're at the super levels of funding that we're now seeing. So if I'm a relatively small company (funded to $50m) that is spending $5m a year on marketing, and I'm competing against a company with $500m in funding and, say $100m on marketing, then it's even worse.
disgruntledphd2
Yup. Scaling marketing without accurate LTV's is normally a terrible idea. I've seen so many startups go bust because of mistakes here (especially if you have a long sales cycle/top heavy revenue (like most f2p games)).
But, as you said, the incentives point towards terrible outcomes, so this keeps happening.
zippergz
Maybe your situation or industry is an exception, but my view is that affiliate marketing is one of the most corrosive influences on today's internet. It drives a truly mind boggling amount of spam of all types, from affiliates who add literally no value other than inserting their affiliate code into the transaction. The proportion of content on the web that provides no true new information, but exists solely to drive affiliate traffic, is surely massive.
So, it's great for your business that this worked, but I personally don't see any strategy that leans on affiliates to be worth celebrating.
ssharp
A lot of things can fall under the "affiliate" umbrella but what we did was doing 1-on-1 deals with content providers who were acquiring a lot of relevant traffic. It was not promo code spamming.
PoignardAzur
Wait, so what was the monetization channel for the influencer?
partiallypro
#2 is basically an industry standard for ad firms (at least good ones), you'll usually only get people buying those ads to fill budgets or to do branded advertising that's only purpose is to raise brand awareness. I don't really agree with your #1 point, but that really depends on your vertical. You couldn't really do that well in service industries or financial/legal services, etc.
ssharp
In my example, I saw a lot of competitors try and fail at acquiring customers profitably. You could see the ebbs and flows of them trying as well as the well-financed players dominating spend. When the industry numbers came out, things never lined up.
That said, I’ve worked at brands where paid search and paid social are incredibly valuable channels.
ameister14
Oddly enough, display ads crush it for restaurant catering
rexreed
So much of what we rely on today for Internet applications and infrastructure has at its core a fallacious advertising revenue model. As companies who spend money on advertising realize the low returns they are getting, they will turn off that ad spend, which will turn those platforms into increasingly needy and demanding in your face advertisers, being more intrusive with your data. Since the average "user" is the product and not the customer, users will continue to see fewer and fewer features that don't help with advertising revenue and the quality of the overall service to the user (not the customer, the advertiser) will decline.
We're already seeing that. The quality of Google products continue to decay. Facebook and LinkedIn are increasingly both becoming shallower advertising hustles (LinkedIn just this week turned off post notification for events to force people to buy LinkedIn ads). As other apps and websites get snapped up by these FAANGs, we'll start to pine for the Internet that was 2008. The decay is already well under way.
What is truly sad is that some of the smartest computing minds of our day are spending their efforts at these FAANGs not advancing society but rather helping keep people more addicted to social networks, optimize for clicks on video and web streams, pushing products in all your channels, and optimizing for the wrong things. How have we gone so astray?
yupper32
> What is truly sad is that some of the smartest computing minds of our day are spending their efforts at these FAANGs not advancing society but rather helping keep people more addicted to social networks, optimize for clicks on video and web streams, pushing products in all your channels, and optimizing for the wrong things. How have we gone so astray?
I think this sounds deeper than it actually is.
What you're describing is just capitalism. A consequence of capitalism is that sometimes people figure out how to make addicting products and then capitalize on it (cigarettes, drugs, social media). Eventually we figure out the harm and work hard to stop the damage as much as we can. Cigarette usage is down to historic lows in the US, for example. Sometimes it takes a while and takes a lot of fighting.
Another consequence is massive incentives to advance society. You can't deny that the vast majority of technology advances over the last 20 (or 40 or 60 or 80) years have been incredibly beneficial to society. And the advances wouldn't have happened if we didn't also risk the occasional bad actor coming up.
We're still figuring it all out as a society. We've weathered worse and will come out of it stronger.
malwarebytess
Considering technology, capitalism, are causing a mass extinction on our planet and pushing us to collapse I'm not sure that I can't deny our technological advances have been beneficial.
When something is killing you and all life on the planet, it doesn't matter if it's killing you softly.
yupper32
Can you be more specific about what you're implying? Are you saying that society would be better off if we didn't progress past the industrial revolution?
lmm
We get the society we deserve; Facebook et al give people what they pay for. If they're optimizing for the wrong thing then maybe we need to get better at paying for the right thing.
netcan
People have a tendency to view advertising as ineffective on them. "I never click ads." Mostly this is true. Most ads people see don't make them do anything. People see a lot of ads though.
Meanwhile, it's a marketing cliche that "half the budget is wasted, but we don't know which." It's also true that google or FB provided analytics, using default settings often grossly overestimate ad effectiveness. All true. A journalist somewhere is writing a version of this article at any given time.
But... From the merchant's perspective, the existence-proofs for advertising's effectiveness are undeniable. Launch a site. No visitors. Advertise. Now there are visitors. People subscribed to something or bought something. The ROI may or may not work, but the principle isn't in question.
For a blank slate, newly launched business performance marketing is easy to measure precisely and you can have a reliable ROI. For BMW, GoPro or geico insurance... the world is more complex, ROIs are more theoretical and "half the budget is wasted, give or take 50%" applies.
The same was true for TV. A mattress store run ads with a crazy guy screaming "Sale!" and the next day a lot of mattresses get sold. The fact that ads made people come buy mattresses is trivially true, from the merchant's POV.
tomhoward
Related: I happened to be acquainted with a founder of one of the major coupon sharing sites, after they’d sold it for a rumored 8-9-figure sum.
It didn’t make sense to me that it could be so attractive to brands to promote coupons there. People have already decided they want to buy the product; why would you want them to go hunting for a big discount after they’re already sold?
He told me that the people who like it are the advertising staff and consultants, so they can generate evidence for their bosses/clients that their campaigns are working.
I get that it can be partially effective. Sometimes I’ll think “I’ll buy this product if I can find a coupon that gets the price under X”.
It’s just a funny old world when an advertising professional is motivated to spend money with a third party to give their customer a big discount on a product they’ve already decided they want, in order for the advertising professional to justify their existence.
lifeplusplus
Groupon
rexreed
Incorrect. Coupon sharing, such as RetailMeNot. Not group discount buying.
s17n
The example given in the article seems very off-base: the author is vaguely planning to purchase some type of planner, and he gets an ad for a specific planner from a specific retailer. There has to be a pretty tiny chance that he would have ended up at that exact site without the ad, so if the ad does lead to a conversion, it's incremental revenue.
pbhjpbhj
It's interesting the OP appears to accept they're in the uncanny valley of "well FB knew somehow I was going to buy that one and showed me the ad".
For me it just made me think, well I'm doing something right because Facebook mostly offers me shitty white label stuff that's being sold using fraud (I've made complaints to Advertising Standards [UK] a few times about Facebook ads) and that I would never buy.
bagacrap
Not to mention, "you’ve just visited some articles recommending fancy paper notebook products" makes it sound like he viewed some spammy top 10 list full of paid affiliate links, so he's probably succumbing to performance advertising regardless of Facebook's later involvement.
Ozzie_osman
(So I do think that performance advertising is partly a racket, but it can work really well if you know what you're doing).
One additional thing people don't call out is that a lot of the budgets spent on these platforms are "learning" budgets. Agencies play this card really well. They'll tell you, "oh, you need to increase your budget, and test all these different combinations of ads/targeting/landing pages/etc so that you can learn what works (or the AI behind the platform can learn what works)". And obviously, in "learning" mode, you're ignoring the ROI.
I've seen people spend substantial amounts of money in "learning mode", and the platforms are kind of incentivized to make the learning less efficient so it takes longer and more spend for you to get to ROI positive (or to learn that you will never get there).
disgruntledphd2
> the platforms are kind of incentivized to make the learning less efficient
Any successful platform is not, because by definition they have enough ads, and so want to focus on driving conversions for advertisers so that demand, and hence revenue, increases.
Agencies are often super shady though, on that we agree.
myth2018
During pandemics, I got really suspicious about adwords.
My ads were working reasonabilly well considering the low investment I was making, with a fair amount of prospects filling my contact form on a low but steady rate. I was satisfied with the return I was getting.
However, the pandemic caused a significant drop on my product's demand. I thought I was going to get little to no contacts from the moment the lockdown was announced on, but:
1) I kept getting clicks at basically the same rate -- therefore my budget kept being depleted as it used to be;
2) Bounce rates increased A LOT;
3) The few actual people who got in touch were not actually looking for the product I announced, but similar ones (which I didn't announce nor sell);
So, according to my experience, I can't say adwords totally doesn't work.. but I'd say their algorithms are optimized to spend your money regardless of the results you're going to obtain.
justinbaker84
You have that right. I am a full time search marketer and here are a few things they do that illustrate their ethical standards:
1. Geo-Targeting - no matter what geographic setting you create they will run your ads all over the world unless you know how to change settings they have intentionally hidden.
2. Keyword Selection - No matter how much effort you put into selecting the best keywords they pretty much run your ads on whatever keywords they want. They make it extremely difficult these days to control what keywords trigger your ads to show up.
3. Campaign Caps - A cap is a limit you can set on how much a campaign will spend each day. Except google will spend up to 2x your cap. So you would think you should just set the cap at half of what you really want but they have complicated algorithms in place to screw up your campaign if you do that.
lifeplusplus
What can a new marketer do to make sure they are not getting conned like that?
Gustomaximus
> their algorithms are optimized to spend your money regardless of the results you're going to obtain.
This is a real problem with Adwords and it needs regulation. Google increasingly push people to give us your money and trust us, but as you say their optimisation recommendations both automated and account 'experts' suit their agenda more than yours.
Adwords is probably still the most effective channel for a typical business but make sure when being run it's by someone that knows what they are doing.
citizenpaul
I've been beating this drum for a decade.
I once even had a marketing department shut down with analytical proof. I got tired of the marketing department with probably 50x the IT department budget constantly jumping down our throats about how "IF ONLY IT HAD DELIVERED X BY X we could have had 100,000,000,000x /s sales this month"
I made a dynamic report dashboard in my first react project to analyze market spending and prove that even if you wanted to move around metrics to be comically generous the marketing was doing basically nothing to drive sales. MGMT got rid of them and literally nothing changed except everyone had better budgets.
birtoise
This comment is obviously false, but its children comments are on the same level as reddit threads -- pre-made, repetitive, joke-like one liners that add nothing to the discussion.
murillians
And that React project's name? Albert Einstein.
citizenpaul
Project didn't have a name. It was some simple dashboards with sliders that allowed you to expand and contract the scope of what was considered a market campaign sale, along with some timelines (basically gantt charts)of the products and when campaigns were run. This way the owner could look pretty pictures easily and see the data was all over the place. The website or webapp if you want to be generous was never used again after that.
No one clapped the 4 people in marketing were not happy to lose their jobs. Marketing got moved to an accounting process where the handful of advertising things that seemed to work were kept on a monthly set budget.
This was a smallish family owned rather dysfunctional company as I grew to learn. I was able to have a meeting about this directly with the owners, by a meeting I mean drinks a bar/pub till 2am. Yeah 50x was probably an exaggeration as I don't know to the penny but several times is still a lot for a useless department.(also doesn't include salaries which IT had much more of) This was pretty much the only positive thing that happened there after that it was all downhill and the owners got bored with nerds that could no longer produce outsize ROI on their usefulness and we got laid off as well.
Its actually kind of sad that someone called it "obviously false" not all of us are basement dwelling introverts afraid to challenge the status quo.
Also to the other sarcastic jerk, SaleForce calls their report page "Einstein" Insights or something close.
bogwog
The entire management department stood up and started clapping.
kposehn
I'm going to repost my original comment (thread here: https://news.ycombinator.com/item?id=21468505) about this which is still applicable:
> Reliably someone comes along every few months to question [performance marketing]. I always come back to analyses of incrementality as the real proof.
> Take an audience of X people. Divide them in two. Show ads to your test group, don't show to control. Watch your business grow and gauge the lift between the two audiences. The companies that know how to advertise at scale do this constantly and can gauge the real effect of their ad dollars. Facebook, Google and others make these tests possible in their platforms, while other software suites such as Impact Altitude and VisualIQ allow you to do this kind of analysis and testing as well.
> In the end, most of it proves out to be incremental. There are notable exceptions of course, but when are there not?
gingerlime
> Facebook, Google and others make these tests possible in their platforms
Any specific tips/links on how to do this with Google/Youtube retargeting?
cwp
Didn't drill into the details here, but I think there's one area where digital advertising is indisputably useful: the cold start. So many start ups have benefitted hugely from buying Facebook/Twitter/Google ads when they hit that point where all their friends, investors and employees are already using the app, and they've maybe to got a handful of organic users, but how do they get from a few dozen to a few thousand users?
This is really the sweet spot for digital advertising. The cost is low, both because you don't need that many new users to make a huge difference, and because the volume is so low that the targeting works really, really well, and conversion rates are really high. For a more established business, sure, you're getting people that would have bought anyway. But in this case, you're getting people that would have bought if they knew you existed, which they don't.
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> Technically, when someone does a Google search for “Williams Sonoma Cast Iron Skillet,” they probably would have clicked on one of the first 10 organic results, EVERY ONE OF WHICH leads to their website. But, y’know what ol’ Billy Ma’s performance marketers couldn’t then do: prove their value to their bosses.
> [picture of that search term and williams sonoma ads with shopping links]
The main problem here is that if Williams Sonoma was not advertising on that search term, Lodge and Food52 etc etc would, and then those companies would be above the Williams Sonoma organic placements.
The spend is necessary in a defensive way because Google creates a bidding war even for the hyper relevant.
edit: I just checked and if you search "williams sonoma skillet", if WS was not paying for [green] then the very first "result" (ad) would be Food52 [red] https://imgur.com/a/9Nnxs6h
I just tried "airbnb paris" and the first result is, somewhat predictably, an ad that is not airbnb. But the second one is also an ad, this time from airbnb. So they clearly didn't keep their spend dialed down to zero, and are aware of the need to advertise on their own keyword.