April 29, 2015

10 Facts From The Real World

Every year or so I like to take a step back and look at a few key advertising, marketing, and media facts just to gauge how removed from reality we advertising experts are.

These data represent the latest numbers I could find. I have listed the sources below.

So here we go -- 10 facts, direct from the real world:
1. E-commerce in 2014 accounted for 6.5 percent of total retail sales. 

2. 96% of video viewing is currently done on a television. 4% is done on a web device.
3. In Europe and the US, people would not care if 92% of brands disappeared.

4. The rate of engagement among a brand's fans with a Facebook post is 7 in 10,000. For Twitter it is 3 in 10,000.

5. Fewer than one person in a thousand clicks on a standard banner ad.

6. Over half the display ads paid for by marketers are unviewable.

7. Less than 1% of retail buying is done on a mobile device.

8. Only 44% of traffic on the web is human.

9. One bot-net can generate 1 billion fraudulent digital ad impressions a day.
10. Half of all U.S online advertising - $10 billion a year - may be lost to fraud.
As regular readers know, one of our favorite sayings around The Ad Contrarian Social Club is a quote from Noble Prize winning physicist Richard Feynman, who wonderfully declared that "Science is the belief in the ignorance of experts."

I think these facts do a pretty good job of vindicating Feynman. 

1.  U.S. Dept of Commerce, Feb 15, 2015
2.  Nielsen Total Audience Report,  4th quarter of 2014
3.  Havas Media
4. Forrester Research 
5, DoubleClick
6 The Wall Street Journal
7. US Dept of Commerce and MarketingLand
8. Incapsula
9. Yahoo 
10. Adweek 


The Marketables said...

Very interesting facts, definitely provided some new insight - especially fact no. 8! #5, on the other hand, did not come as a huge surprise. I wonder how many people use AdBlock today. Hmm...


Joseph Zaccardi said...

I think (1) is at least slightly misleading. Using the 2013 data from the annual retail survey (most recent) (http://www.census.gov/retail/index.html), it appears that about ~35% of total retail sales are unavailable to online retailers because of laws (e.g. autos) or because it is simply impossible to buy some things online (e.g. Gasoline). The true level of e-commerce sales may be closer to 10% of "available" retail sales.

The survey you cited also doesn't break down by industry, which is probably more useful to anyone actually selling anything.


Calling BS on #8. Incapsula has a conflict of interest; they sell bot traffic mitigation! The sample size was extremely small, over a short amount of time and only conducted on Incapsula's bot protected websites. Adding some filters to your web analytics can reveal the real number of bot visits, typically less than 5% for most websites. Additionally, bots are necessary to crawling and indexing your site, you know, so you can find shit in the Googles. But they are not 56% of web traffic.

bob hoffman said...

C/NET says 38.5% of web traffic is human.


In that case you should probably hire Incapsula to mitigate all that bot traffic. You'll also need to adjust your site to say "You are Bot number...2,790,000."

geoff said...

1. E-commerce in 2014 accounted for 6.5 percent of total
retail sales.

Well sure. Groceries, booze, cars, houses, gas, most consumables, refrigerators, construction...there's a big list of categories where ecommerce has had minimal impact, and it's making that 6.5% total possible.

But lordy, would it be dumb to think that low percentage means e-commerce has had a minimal impact on so very many other categories.

Believing this number might lead you to acting like the CEO of Circuit City.

Patrick Scullin said...

My biggest concern is how to generate more bot traffic.

M Morin said...

1. Ecommerce is a $1.3 trillion/yr segment.

2. People watch an average of 4.5hrs of TV and about 30 min of mobile video. Which is not 96%. Also, mobile videos are shorter on average, so if you count by total views and not viewing minutes, the percentage changes even more.

3. BS. If 92% of products disappeared, people would freak out.

4. Since there are MANY success stories of much higher Facebook and Twitter engagement, the correct analysis of your stat isn't that FB and Twitter don't work. It's that we need to do better advertising there.

5. Again, the takeaway is we need to do more engaging or relevant banner ads. And if that's the case, why does your agency do banner ads for Toyota, etc?

6. If marketers can prove this, why aren't they asking for money back?

7. Mobile commerce - a $638 billion/yr segment

8. That's why savvy marketers don't pay per click.

9. See #8

10."may be"? The flip side is it may not be. What a useless stat.

If we're all this removed from reality and you're right, why do you recommend these things to your clients?

bob hoffman said...

You're still arguing with facts and torturing logic? I thought you'd be working at Starbuck's by now.

socceruci said...

I remember reading the Google study that the WSJ is quoting: http://think.storage.googleapis.com/docs/the-importance-of-being-seen_study.pdf

So, for #6 I would say "not viewed" instead of "unviewable". I wonder how many digital marketers are aware of this.

M Morin said...

So you can't respond. Thanks for clearing that up.

bob hoffman said...

God you're annoying. I banned you once for annoying the shit out of me with your juvenile comments, I'm about one inch from doing it again.

M Morin said...

Because your Starbucks comment was so adult...

Bob, you clearly have a point of view. All I'm asking is that you stand up for it. It's totally fair to ask why, if you're so negative about social media advertising, e-commerce, mobile commerce, etc., then why do you sell it to your clients? From your own site, you've done a bunch of mobile for McDonalds, Toyota, the StL CVC, etc.

bob hoffman said...

You don't seem to understand that I didn't make these facts up. You want to argue with the Dept of Commerce and Nielsen and the Wall Street Journal? Be my guest. But don't write dumbass comments that assume that these are my opinions. I gave you the sources. Go argue with them.

Cecil B. DeMille said...

There's no such thing as a perfect survey, I guess. And you can technically buy cars online. Just not new cars. And you can get gasoline, too, if you're willing to essentially run a full tank of Torco (not recommended) or if you've converted to biodiesel (also not recommended).

But I see your point. Still, there must be a reason the DoC chooses to measure the way it does. Then again, that reason could easily be: lowest bidder.

JIm Powell said...

“It is difficult to get a man to understand something, when his salary depends on his not understanding it.” I guess you are a social media expert right?

M Morin said...

Wrong. Try again.

Guest said...

"BS. If 92% of products disappeared, people would freak out."
you do know the difference between a product and a brand, don't you? cause it looks like you don't have a clue.

M Morin said...

You do know that many brands make multiple products, don't you? Cause it looks like you don't have a clue.

If the Unilever brand went away, how many products would go with it? A thousand? What if 3M went out of business tomorrow? How many products would disappear as well? So depending on which 92% of brands went away, it could be as high as 99.9% of products going away, too.

But hey, don't let logic get in the way of your ad hominem attacks...

bob hoffman said...

Hey Morin, why don't you haunt some other website. You're just making a fool of yourself.

M Morin said...

Actually I think the fact that the only answer you have to any question is a childish insult shows everyone who the real fool is. (Hint: It's not me.)

M Morin said...

You still haven't answered why, if you think banners are so horrible, why you sell them to your clients?

Dietmoriarty said...

why is this not the front page story of adweek?

polhotpot said...

You're talking shit.

Pretty much every product from Unilever could be replaced by another, better offering overnight from another company. I don't know about the US, but in the UK, supermarkets are doing a very good job of selling people their own-brand products instead of the branded ones. Once they get over the initial hump of trying them, if the product is good, they don't give a toss hit whether it's Tesco's Finest Mayonnaise or Hellman's.

Anyway, in this aged of outsourced manufacturing, it's not uncommon for the same production line to make stuff for Unilever on one shift, then swap over to another manufacturer or own brand on another.

The 'brand' has very little intrinsic value - it's just a bunch of advertising and a nice logo, ultimately.

Even the Supermarkets are being beaten at this game over here by the discounters like Lidl & Aldi.

polhotpot said...

I take your point about this showing broad, sweeping pronunciations being a fucking stupid thing to do (and I know that's what your targets like to do), but it really depends on context. For an FMCG company, digital is almost certainly a massive waste of time and money. However for UK supermarkets, for example, the ones who didn't get online at an early stage are really suffering now. 75% of UK adults now do some sort of grocery shopping online* (although the majority of sales by volume are still done in stores).


M Morin said...

The argument isn't "could someone else replace the product." The argument is "If 92% of brands went away, would people care."

Yes, when you're talking mayonnaise, people may not care all that much. (Although some would.) But take away the Apple brand and make everyone use Dell? People would freak. Comcast can stream video just as easily as Netflix. But if you took away the latter and made everyone deal with the former brand? You'd have a ton of pissed off people right off the bat, because the Comcast brand is shitty and everyone knows that.

Saying a brand has very little intrinsic value is like saying someone's trust in you, or their affection for you has very little value.

polhotpot said...

No, a bunch of idiot iSheep would freak. I hate to break this to you, but Apple are exactly the same computers as Dell under the shiny white exterior (with slightly worse specs for the money).

M Morin said...

Thanks for proving my point! Apple is more expensive for a lesser product. So why is it the most valuable company in the world? Because of the brand. Because people want to be associated with their brand. Because their brand is "cool" and people want to be seen as "cool" too.

Rolex doesn't tell time any better than any other watch. But people buy it for the status is conveys thanks to the Rolex brand.

Volvo isn't really any safer than any other car these days, but many people will turn to them first because of the brand perception.

Brand is incredibly valuable (if you do it right). You can call consumers a bunch of "idiot iSheep" all you want, but the reality is, those idiots, thanks in part to some great branding, will soon make them the first trillion dollar company.

polhotpot said...

Yes, and if they disappeared overnight, someone else would take their place, even if the customers whined a bit. Your point?

M Morin said...

Again, we're not debating whether people would care if 92% of brands went away and were replaced with something else. We're arguing if people would care if 92% of brands went away.

But debating someone who thinks brands are worthless and just some "advertising and a nice logo" is pointless. Tell Nike their brand is worthless. Tell Apple. Tell Porsche, Sony, HBO, etc., etc., etc.

Bryan said...

Owned a company NYC for a decade and a half. We had clients and everything. We would sit and discuss projects and come up with proposals. With every meeting, where we sat blowing smoke up each others asses, I eventually would cut to the ugly and truthy side of business...

The money...


Guest said...

"If the Unilever brand went away, how many products would go with it? A
thousand? What if 3M went out of business tomorrow? How many products
would disappear as well? So depending on which 92% of brands went away,
it could be as high as 99.9% of products going away, too."

oh, man... you obviously don't even know the differenence between a company, a brand and a product.
sh*t, being you must be really boring.

Avi_Lambert said...

Nice write-up. Local advertising is an incredibly large area of waste and fraud, it can't be denied. Dollars are being thrown. Companies like Yelp and Yahoo are still using unique legacy business models. Mobile retail purchasing & the sorry state of banner ad clicking, could be different. The thing is, local search is growing. A different question to ask might be, are people using local search. Great article from Search Engine Land on the topic here http://searchengineland.com/top-10-insights-local-search-marketing-experts-lsa-15-219974 Customers are increasingly using mobile to discover, rate, book and purchase CPG and services with programmatic apps.