I’ve posted this comment before, but:
1. It’s hard to tell when someone has bought a product. You buy it at a reseller and the brand will never know. Or you buy it on mobile, but have researched the brand on desktop. Or you purchased it at work, but were researching it at home. Advertisers suppress known buyers but they don’t perfectly match you to all of your devices.
2. Just like there are not so good developers and not so good code, there are not so good marketers who aren’t that great at their job. Or they have too much work and didn’t set it up correctly. DSPs are extremely extremely complicated, so it’s to make mistakes.
3. Retention and advertising to previous purchasers drives more additional purchases. Maybe you only purchased blinds for the main floor of your house but not the basement.
The thing is, they're all wrong. Advertising is a trillion-dollar business because it works. The human mind is susceptible to suggestion, and it's been demonstrated over and over again for basically as long as we've had civilization.
What is ALSO true, however, is that ad dollars are exceeeeeedingly inefficiently deployed. Which is why you experience things like weird retargeting on things you've already boight. I experience this too -- there are several brands that for which I'm a happy paying customer and I still see their ads 1-2 times a day.
a) Someone recently bought blinds
b) Someone bought blinds 5 years ago
c) Someone hasn't bought blinds ever (maybe they're renting, or just tape newspaper to their windows)
Turns out, on average, the answer is a. Either because you're returning blinds you don't like and are in the market for replacements, or because you're doing a home remodel and once you fix up one window you'll need blinds for the next one. Even if most people who bought blinds won't be buying new ones in the next week, those are still better odds than advertising to someone who will never buy blinds in their entire life.
To answer your initial question, it works and it works really well. As advertisers, we see a significant difference in sales when we don't advertise online. This is especially true for search advertising and retargeting. ToFu first touch display advertising doesn't necessarily work as a sale generator. It's the subsequent advertising / display retargeting we do afterwards that works. Unfortunately for advertisers, the days of doing the way we do things will come to an end with third party cookies essentially going away. It'll be interesting to see how digital advertising changes (specifically for open garden platforms like Google ads) without the third-party cookies.
I have a list of authors I follow on amazon.com. It would be a better use of everyone's time if they just picked a random book from any of my favorite authors, made sure I hadn't already purchased it through amazon, and only then show it to me. It's like they're not even trying.
All I'll say is that they used pretty low down ways to get to people, one example that sticks out was the amount of targeting that went on late Friday, late Saturday night in APAC when folks would stumble home drunk and go online.
Everything and the kitchen sink was thrown at these people, and it often resulted in multi thousand dollar sales, including a few automobiles!
Buyer’s remorse and post-purchase confirmation: You’re seeing ads for products you bought because the brand or marketing team decided to spend some more money to have you avoid buyer’s remorse and to reaffirm to yourself that the purchase was a good one.
This may or may not work, depending on the person and the product, but some of these things are probably not measured well enough to decide who should see the same ad and who doesn’t need to.
They have everything on me: my age, sex, social state and circles, location, life habits, profession, work hours, sleep hours, movie and porn preferences, which non-entertainment topics I’m interested in, which medical issues I have, and probably 50 more properties I never thought about.
But I never clicked on any nonsense they tried to advertise to me. I see nothing new, nothing interesting, nothing relevant to my life in ads. None of my new interests ever came from these flashy boxes.
- Different countries have drastically different CPA (cost per action). You can acquire users easily in low-income countries but not US or Canada. So you have to set different CPA target for different countries. Currently Google ads doesn't seem to do adjustments automatically for app campaigns.
- It might take more than one impressions to convert one user. I looked at the conversion paths analysis in Google Analytics and found about 25% of conversions had two or more campaign impressions. Also there's a term called "touchpoints to conversion", basically how many interactions it took for a user to convert. Mine is about 2-3 touchpoints for all campaigns.
- Running ad campaign for my app feels surprisingly similar to the experience of hyper-parameter tuning of ML models. Google in fact does use ML to run campaigns internally. That might also be the reason why the initial phase of campaign doesn't work very well with limited training data and bad initial weights.
Adtech was created to make the buying and selling of online advertising so much more efficient. Today, about $350 billion dollars is spent on online advertising. 70%+ of it is bought programmatically. And according to the ANA and PwC, 70% of advertising dollars spent on online programmatic advertising never touch a human being. Of $200 billion in annual programmatic ad spend, $140 billion disappears in "ad fees, fraud, non-viewable impressions, non-brand-safe placements, and unknown allocations".
See The Programmatic Poop Funnel: https://i2.createsend1.com/ei/d/DD/DB6/ACD/030147/csfinal/Sc...
I love reading Bob Hoffman about this subject.
"The lovely fantasy of online advertising -- in which the same person who was frantically clicking her remote to escape from TV advertising was going to merrily click her mouse to interact with online advertising -- is going to go down as one of the great marketing delusions of all time. It has been undermined by an unfortunate fact of nature -- no one in his right mind volunteers for advertising.
By a factor of about a thousand to one, people who can interact with media do so to avoid advertising -- not engage with it."
For example, I ran a small business creating posters from cyclists GPS data. I created FB ads that targeted people that used Strava (I'm a little rusty on the exact terminology but it was "had an interest in the strava.com website") and got lots of clicks with people that tried the service.
However there are topics - window blinds is a good example - that people aren't (in general) interested in for very long - so once the algorithm comes to the conclusion that you like blinds you've probably already made a purchase. Similarly I subscribe to the economist magazine and keep seeing Economist ads - infuriating.
Facebook allows advertisers to remove groups of users (for example those that have purchased a product already) - I don't know why more companies don't use this.
You mention charities - I remember reading that most charitable donations come from people that have already donated to that charity before, although I can't find proof.
For example, I have many pairs of awesome Portuguese shoes, and I originally found this vendor via their Facebook feed ad. That’s over $1000 of revenue over several years from a targeted ad which (I assume) cost them a dollar when I clicked on it.
I’m genuinely happy I saw that ad and found a shoemaker I like without having to research it.
Ads within the FB app still remain much more relevant than the stuff Google shows me on third party sites, which is much more random and often an eyesore. (Yes, I know nobody on HN uses the FB app either. What can I say: I joined at the age of 38 and was surprised that I genuinely like browsing FB because it’s so chill, just old friends and relatives. Nobody is angry or picking a fight, unlike Twitter where that’s 50% of the traffic.)
I've been thinking of getting a new backpack, and I got backpack ads. However, while I get "ads" -- plural -- they're all from the same single vendor selling a "last bag you'll ever need" that doesn't look all that good. It's frustrating more than helping, the exact reason why I turned off ad targeting in the first place.
Years ago I turned targeting back on in Google, and it just meant I got spammed with Pebble ads (>50% of the banners everywhere were Pebble) because I kept checking their website for a sale (at the time they did occasional 2-3 day sales without advertising them, weird given the banner budget). I just turned it off again after that experience.
So I'm but sure about the (micro) targeting aspects.
What I'm sure about is that ads work, especially if you do them well.
And it's hard to keep the quality separate from the delivery method, as you can't do clean a/b testing or similar (as things like "seen before" or even other ads can have noticable effects as far as I can tell).
For example, maybe you do not browse a lot before spending money because you know what you want more or less?
I have the habit of clearing my browsing data often, all the tracking options in my Google account are off, and the ads I get seem pretty generic in general, but I sure get ads related to my Google searches if there is something concrete to purchase, like hardware parts.
I do peruse ads in my muscle car magazines, because that's why I buy those magazines.
I enjoy the ad placements in those car hotrodding TV shows, because I am interested in how to do the projects they're doing, and the stuff needed to do them.
Amazon pushes ads to my kindle, but I couldn't tell you what they were for because they don't register on my brain.
It more or less paid for itself, without much profit, using just FB ads. So basically if some amateur can break even with barely any understanding of how it works, someone with proper marketing experience can probably do well enough to make a living.
The thing is the purchase rate was something like 1%. So it may well be that most people by far never buy anything via ads, but the minority is enough to make it worthwhile.
People often ask why they are targeted after they have made a purchase. This is because of limitations of tracking. Merchants can add trackers that show on their checkout pages to associate ads with sales, and stop targeting browsers that have made purchases. Sometimes this works, but often either A. advertisers don't correctly configure these systems or B. limitations with 3rd party cookies make it so the "I've already bought it" signal never makes it back to the ad network.
What I don't understand is why consumers aren't offered a choice by ad companies to actually just tell them they bought it. I would assume a marketer would love to know feedback from buyers like when/where/why the purchase took place as well as commentary on the product, vendor etc. It seems like a missed opportunity to make the advertisee more empowered and advertiser more informed.
Last year I began using THC to sleep better. And last week I experienced developing a deep craving for a specific snack food I saw an ad for. And everything clicked for me: advertising is probably very very effective on more easily manipulable people. People who are thrall to their lower brain impulses. I felt like I was six again. I just had to have a Skor bar so badly.
To be clear, I suck at this. I've attempted to buy instagram / facebook ads and had little luck. For FaceBook ads you basically have to spend around $6k before the algorithm even starts to care about what you're doing. This is essentially because it has to first serve enough ads to figure out if people are actually clicking before actually targeting the demographic you set.
That said, as much as I hate it, I have no clue how to do social media marketing (TikTok or otherwise) and it's astonishing how much energy and time this takes. I used to joke that it'd be a better use of my time to find a college girl who likes TikTok and has a stimulant prescription to run social media for my bad side-project. (this is a joke)
However, targeted ads definitely work. I still get ads on instagram for the rapid-test clinic that just opened up across the street from my apartment. I can literally see the clinic from my window.
On Facebook, you can let the system know that you have purchased it by clicking Hide Ad => Already Purchased. If companies use Facebook pixels to track orders, Facebook does know whether you purchased it... but maybe not all companies use Facebook pixels for order tracking so Facebook doesn't know.
Regarding YouTube, YouTube ads are simply not worth it. Get YouTube premium.
You can ofc disable "personalized ads" in these platforms if you don't want these ads to follow you.
I did both academic research (recommendation engine algorithms) and industry work (leading online advertising at a large e-commerce ). I can confidently say from my background that the targeted advertising works.
In fact, it works so well that it is almost awe-inspiring to see it in real action. Any e-commerce or advertising firms, including my former team, have internal data to support this claim. For our case, the difference between a highly optimized traditional adverting vs a crude targeted advertising algo is a still factor of N in favor of the algo (N >> 1). As the algo is optimized, N grows larger.
I can't say the same for YouTube or Google: all ads I see on Google and YouTube are crap. Ads I see on Instagram/Facebook are actually high quality.
YMMV.
this might be an example of the targeting knowing you need the medicine but not that you have it, I recently searched for something I would need a medicine for, I already have the medicine which I got during holiday but the online companies have no way of knowing that, thus I get advertisements for the medicine. Great job targeting indeed.
What you refer to is called re-marketing to people who visited the website, engaged with ads, but did not buy. The problem is that there are lots of advertisers that do not exclude people who already bought their products and this is bad marketing because people getting bombarded with ads for products that will never re-purchase.
https://thecorrespondent.com/100/the-new-dot-com-bubble-is-h...
Discussion on HN:
So what you see is an adtech tax - partially wastage but people will overlook this if they are still profitable on their marketing ROI.
A remarketing ad can be set up using exclusion lists to stop display after a purchase ( checkout page cookie), also most should be set up with limits. These are basic,obvious and easy things to implement. Attribution isn't always perfect but what you observed is more of a reflection of the high frequency of low tier ad managers. Many don't know any better, many don't care, many have no access to actually edit a client website (or know how)
It's the wild west still.
The example you used is also of a brand that I am overmarketed to, whoever is spending their money has some belief or knowledge of very broad targeting that I don't understand. I have not nor ever will buy blinds and my browsing behavior does not align with the obvious interest groups one would pick.
It's not just the small agencies that blow money, someone is patting themselves on the back about the 100,000,000+ impressions they are generating daily for selectblinds, but that funnel is going to be ugly when it's time to jazz up their presentation to show off that success!
Yes, targeted advertising consistently produces higher conversion rates. Your personal experience might have been "poor", but in aggregate it works.
Generally they work very well, better than audience category targeting. To work the best you have to set them up so.
If they are following you post purchase it often (but not always) means the marketing personal have not built a negative audience on a purchase confirmation flag to exclude this behaviour.
It may or may not matter depending on the ad pricing. Some ads you only pay on a click, others on views shown. Obviously the latter wastes more money while if click cost its not such a problem however if volume is great enough to effect your ads likelihood of being clicked it might effect how the ad network displays your campaign.
Basically ads are only as good as the product & implementation. And without trying to sound elitist many of the people setting up and running these campaigns are less technical than they should be and a bit useless at their job. In the same way there are amazing coders vs guys that do the bare minimum pasting other people's scripts as all they can do.
Odds are these campaigns are still making money overall on following the people that didn't initially convert so the companies are happy to keep them running as is.
TL:dr Most likely the ad manger has done a poor setup in remarketing.
It takes 2 clicks to install, definitely less than writing on Hacker News.
