April 23, 2014

An Expensive Lesson In Web Strategy

Here at The Ad Contrarian World Headquarters we are well-known for believing that it is much more fun to identify problems than to offer solutions.

As a matter of fact, offering solutions is how we make money and the idea of giving them away free on a blog is just plain anathema to us.

Nonetheless, there are moments when we feel unaccountably generous and give million dollar advice away for nothing. Today is such a day.

The case in point is our strategy for online advertising. (I don't have the patience to explain it again, so click the link.)

As regular readers know, we have long advocated the idea that the web is good for fulfilling demand, but not for creating demand.

In short, the web is a lousy version of television, but a terrific version of the Yellow Pages.

Our advice is to forget most of the baloney about social media, content, banners and whatever else is flavor of the week, and advertise on the web where people go who are actively looking for something.

Of course, this advice has been widely ignored by the demented doofuses in the marketing and advertising industry who want you to believe that people have nothing better to do than have conversations about your brand on line. (And, oh yeah, maybe there's a buck or two in it for them if you buy this bullshit.)

Well, someone seems to have learned an expensive lesson.

According to Bloomberg, Priceline's ceo Darren Huston, says that Facebook and Twitter have failed to deliver results. I'm shocked...shocked I tell you.

Priceline's online spending last year was an astounding $1.8 billion. But according to Huston...
“For Facebook and Twitter, we have endless amounts of money. But we haven’t found anything there....But Google has been a great thing.”
In fact, Priceline's cost of marketing increased 41% last year while their business grew 29%. It looks like it's back to Google for them.

People who understand the "creating demand vs fulfilling demand" strategy would know in about 2 seconds that Facebook and Twitter would not be as effective for Priceline as Google.

Using the web for creating demand is dumb. Using it for fulfilling demand is smart. You owe me a million dollars.


simpleERB said...

I think what is right for Priceline is not necessarily right for smallbiz

Anders Bisgaard Madsen said...

@simpleERB So what is right for smallbiz? Investing in likes on Facebook that turn out to be fake? Finding Brand Advocates? I'm generally interested, cause to me it seems that the right strategy for a lot of smallbiz would be the relatively cheap and precise advertizing on sites like Google.

Alexandre Lamarre said...

Huh... Whaaaa? Did you not read the blog post? Priceline is big enough to make a mistake and survive. Smallbiz isn't. Go to google, it will cost you 5$ to test if it works or not. Use other mediums to create demand for your product. Traditionnal, proven mediums, like print, radio, or TV if you can afford it.

People in front of the TV are receptive to advertising. People online are very busy looking for precisely not your product.

simpleERB said...

I didn't say "don't test"!

You can test Facebook Ads and Sponsored Tweets as easily as Google Ads.

I meant just because Social Media doesn't work for Priceline it doesn't mean that it isn't cost effective for your new small restaurant especially if you have your little sister doing for nothing :-)

We find that lots of start up restaurants have a Facebook page and a Twitter account but no website simply because they are easier to set up and if they have a million things to do setting up the physical business, there is no time to get the website sorted.

We find small restaurants coming to us to us for a booking widget with over 500 fans and over 500 followers. That is good marketing and not to be scoffed at.

What they often overlook is Google+ with its SEO advantages.

And LinkedIn , where a lot of local business custom might hang out.

All of that marketing is free. Print and TV isn't. When you have ZERO marketing budget that is relevant.

bob hoffman said...

I don't disagree with this.

Cecil B. DeMille said...

I shall pay my debt in the form of banner ad placements that only robots view. We'll call it even.

TCWriter said...

I've seen decent results for some clients on social media, but the test isn't whether it works at all -- it's whether it works better than the alternatives.

So far, the answer has been "no."

Email and SEO/SEM (as noted in Bob's original article) simply produce better. That was true way back before everyone who doubted social media's effectiveness was accused of "not getting it." And it's still true today.

Mostly, I've come to view social media as a dysfunctional email channel for keeping clients and prospects informed.