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this post was submitted on 02 Dec 2023
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You know… in all my time upon this earth, I cannot look back and think of a single instance where I thought: “Gosh, this advertisement which has inserted itself in between me and the desired content has actually made me want to go purchase that product.”
Ads are effective, sadly. And why so much money is poured into them. I believe there are a few effects at play but the direct, see and ad and want to go buy it now is only one ofbhem that mostly only affects some people, or a lot of people occasionally.
I think a bigger effect is familiarity. You are far more likely to pick a product you are familiar with or have seen before over something younjave never heard of. Even if you have only ever seen it on advets and completely forgotten that you have ever seen ads for it. So even if you don't think they work on you they likely do without you realizing, at least enough of the time on enough people that make them worth while running.
Bingo. It's not about making you buy something right now, it's about brand recognition and such.
To wit, if you listen to podcasts, do a little thought experiment. Name a VPN company.
Was it "Nord VPN"? Ads work.
I think ad space sellers wildly overestimate the effectiveness of ads and google has made it far worse with targeted ads. People have gotten used to saying things like "ads work" and "brand recognition" but does anyone know the numbers? Or is this just repeating some phrases you've heard?
I don't know the numbers myself, but I'm quite skeptical.
No it does not mean you will pick it. It means you are more likely to pick it. Given all else being equal you are vastly more likely to pick something familiar than something unfamiliar. And it all comes down to trends and statistics. The hope is that more people will go for your brand that leads to more sales then the cost of the marketing in the first place. You might not go for NordVPN for other reasons, but can you say that about every product you have been advertised to? If anything the more you know about a product the less advertising will affect you in the familiarity sense - these adverts are not so much meant for you as they are for people not familiar with VPNs at all.
But there are a lot of studies on the topic like this and this meta analysis that seem to conclude that advertising is effective. And there are a lot of studies on what various aspects of adverts make them more effective. I am yet to see any research that says adverts are ineffective overall, though I have not dug that deeply into it.
There used to be a business joke you’d hear in the ‘60s, often attributed to John Wanamaker, a pioneer in marketing:
“Half the money I spend on advertising is wasted; the trouble is, I don’t know which half!”
The joke highlights the dilemma many businesses face in evaluating the effectiveness of their advertising spend. It’s remained relevant in the advertising and marketing industries, reflecting the challenges in measuring the impact of advertising efforts.
You just became an ad for mullvad...
Good products are worth sharing to help shape future products. Grass roots only works if the product is worth using. Vote with your wallet to help shape future products. While the previously poster can be viewed as an "ad", the post is same as a next door neighbor bringing it up. Mullvad doesn't do affiliate marketing or pay influencers.
I used to use Mullvad but now I use a different service, but especially like to support open source products.
2 second google for some numbers: “In 2022, global internet advertising revenue stood at 484 billion U.S. dollars”
One of the metrics you measure when running ads is return on investment, and companies will soon go bust if you aren’t making money on your ad spend.
Except how is ROI estimated? I can imagine it being done both intelligently and stupidly and so I’m curious how well it is actually done.
Part of what I’m sceptical about is that it seems like a practice driven either by a lot of FOMO and vague thinking or a system where it only makes sense to run ads because everyone else is.
This is all measured and not really estimated. If you think that any substantial chunk of that 484Billion is being done 'stupidly' then you're just making presumptuous incorrect guesses without knowing much about the industry.
Revenue (sales) - Investment (total costs) = ROI There is ROAS which similiar: Revenue - Ad Spend = ROAS You can measure things in more detail like CPA (cost per acquisition) to work out how much ad spend you have per sale, again this is a measurement not an estimation.
Where previously there was mass advertisements to millions of people like TV or radio ads which were only affordable to large companies. Advertisers now can target the exact type of person they're trying to market to for their niche which is a lot cheaper and so more accessible to smaller businesses. To me that makes business sense to do if I can optimise to the right ROI, and nothing to do with FOMO or vague thinking.
How well are sales and ad spend correlated and how well are spurious correlations accounted for?
you're really determined to stick to your belief haha, don't worry about it man I don't think I'm going to sway your mind on this so peace !
Unfortunately I’m genuinely curious. Honestly is a little disheartening though that the first piece of technical pushback has you bailing out. “Correlation is not causation” being stats 101 and all.
If you do have any more to say though I’d happily read it! If not .., all the best.
The fact that companies pour millions into ads means it works for them. Don’t assume that just because you and I (and probably most users on here) aren’t susceptible, it doesn’t mean the majority of the population aren’t too.
Companies are not just pouring money down the drain and paying zero attention to what comes back up. If that were true the advertising industry would be dead instead of the insane massive monolith that it actually is.
These subconscious effects are indeed the most effective ways for an ad to work. However, if an ad is obnoxious enough for you to remember, it can get you to actively avoid the advertised product as well.
It can. But the average impact is still positive.
Yeah, I like to think I'm immune to advertising until I see one that makes me think "damn, I haven't had Burger Restaurant in a while." The worst part is that I'm fully cognizant of what's happening, and yet I still want some and it'll make me think about it for a while afterward, simply because I'm familiar with the food and how it (usually) tastes.
But, joke's on you, Burger Restaurant! I'm fucking broke, son! Now we're BOTH having our time wasted
Yeah, people love to shit on it but everyone knows raid shadow legends
Um, No. Basically everything affects you subconsciously in some way. Both good and bad. That is a terrible and unenforceable thing to make illegal.
Sorry, I was more talking about this in particular:
It is far too general a statement to be enforceable. There are things you can better enforce that focus on the negative effects of marketing, but things affecting you unconsciously is to vague and affects both positive and negative behaviours.
These are all specific things though, not general broad reaching unenforceable statements. Which I agree with, there is a lot you can do with regulation that prevents bad behaviours of corporations, but these are generally specific things that are trying to solve some actual problem. And in this case you need to specific what things you are trying to prevent.
Even for just adverts, trying to ban all adverts that affect you unconsciously would be a ban on all adverts and marketing. Is that reasonable? I would not say so. It would be better to go after specific things like the regulations around advertising cigarettes. Or more relevant to today, maybe something around the shear amount of information advertising agency collect on you, IMO that is one of the bigger problems with them these days. Or the shear number of them that you get shoved into every aspect. Or putting adverts in products that you have already paid for. Those would be far more reasonable things that you could enforce.
Ads work. These companies wouldn't spend millions in them otherwise. Consumer behavior is among the most studied psychological phenomenoms in the world. If you show an ad to one person it's near impossible to tell if it had an effect or not but show it to a thousand people and you'll see it.
That's not how ads work.
Yeah I feel mostly this way too, but the data is solid, ads are effective. Even on me, very rarely. And I'm the type of person who doesn't ever click ads, out of spite. Even if it's exactly what I was already looking to actively buy. But every now and then they give me an idea that I pop open a new tab, research, and then buy.
That's not really how they work, or that is not the only way. Their point is to put the logo, slogans, company etc into your memory. This way when you're shopping for something specific, then the brand pops out to you because you've seen it and it gives you a sense of familiarity and hence, higher trust.
Likewise. I don't think I've ever been moved or compelled to buy, check out, or even pay attention to a YouTube ad.
To be honest, I once fell victim on reddit to an add that promoted AFK-Arena. It turned out to actually be a decent game.
You are not the target market. Advertising is a massive industry for good reason. It works. I know because I own a business and brand name recognition is everything. When people buy things they most often don't do any research, they just think of the first thing that comes to their head and that's usually what they buy. Or the first thing that comes up in their product search.