November 29, 2012
The Wonderful Things We Used To Know
One of the ongoing qualities of mankind that you have to admire has been our ability to delude ourselves into thinking we know things that we don't know.
There are so many wonderful things we used to know that we don't know anymore.
We used to know what the universe was made of. It was made of protons and electrons and neutrons which were made of quarks and a whole bunch of funny little subatomic particles. And then a few years ago we found that about 94% of the universe is made of stuff that is a complete mystery to us. We call it dark energy and dark matter because we have no idea what it is. It's not the stuff that stars or people or protons are made of. It's... we don't know what the hell it is. We're not even sure how to look for it.
It was less than 40 years ago that our experts warned us about disastrous climate change. In 1975, Newsweek informed us that meteorologists "are almost unanimous" that “catastrophic famines might result from…global cooling.” That's right, cooling. On Sept. 14, 1975 The New York Times told us that this global cooling "may mark the return to another ice age." And on May 21, 1975 the Times said "a major cooling of the climate is widely considered inevitable" because it has been "well established" that the climate in the Northern Hemisphere "has been getting cooler since about 1950."
And then, to our dismay, we found out a few years ago that the Earth is actually warming at an alarming rate.
For hundreds of years we knew that diseases were caused by witches, or frogs, or bad vapors, or angry gods. It is only in our very recent past that we've learned about microbes and genetics.
You'd think that after thousands of years of being wrong about just about everything we'd have learned a little humility. But, of course, we never do.
Which brings me to the very mundane subject of advertising.
We used to know how interactive advertising worked. But then the more we studied it, the more we found that consumers have no interest whatsoever in interacting with advertising.
We used to know how social media worked. But the farther along we get, the more we find that our assumptions about the impact of social media on consumers' buying habits are way out of line with reality.
We used to know what was happening in media. And then TV didn't die. And TiVo didn't take over. And the computer and television didn't converge.
But being wrong doesn't stop us.
We still have people making a nice living going from conference to conference, from boardroom to boardroom, who know how it all works and how it will work in the future. They know what we need to do and how we need to do it. They know.
The only problem is this -- they know nothing. They are fools at best, and liars at worst. Anyone who takes them seriously is an idiot.
It's such a shame. We used to know so much.
November 27, 2012
Social Media Bombs On Black Friday
Despite all the hyperventilating over social media, people with open minds and judicious temperaments are still unconvinced that it has significant impact on commerce.
We know that display advertising on social media sites, notably Facebook, has delivered a whole lot less than promised.
But defenders of social media marketing tell us that it is not the advertising value of social media networks that makes them so magical. It's the content value.
The story goes that the real strength of social media is manifest in the feeds and updates on Twitter, Facebook, YouTube, and Linked In. Here people see marketers' posts and they also see the endorsements and referrals from members of their "community" and are powerfully influenced by them.
It's a lovely little story. Unfortunately, it's all bullshit.
We recently wrote about a report from Forrester Research that stated, "Social tactics are not meaningful sales drivers" and that the effect of social media on online sales was "barely negligible."
Now, a report from IBM that measured the effect of social media on online sales for Black Friday have produced some startling data.
The highlights are these:
- While online sales on Black Friday increased over 20% from last year, everything IBM measured relating to the effect of social media on these sales dropped.
- Traffic to online shopping sites from social networks dropped 12% from last year and accounted for eight-tenths of 1% of traffic.
- Sales at online shopping sites that came as a result of referrals from social media networks dropped by over 35% and accounted for one-third of 1% of sales.
- Referrals from Facebook to online shopping sites accounted for two-thirds of 1% of traffic. Remarkably, during this same period, Facebook's user base increased 25%. If there's ever been a clear demonstration of the difference between the popularity of social media and the effectiveness of social media marketing, this is it.
- And get this -- last year referrals from Twitter accounted for two one-hundredths of 1% of online shopping traffic. This year they accounted for 0% of traffic. That's right, zero.
The idea that "conversations about brands" on social media networks are a major influence on consumers is one of the great pillars that social media marketing theory is built on. But as we often say here at Ad Contrarian Worldwide Headquarters, nobody's smarter than the facts.
The results from this IBM report should be another nail in the social media marketing coffin.
But, fortunately for the social media lobby, the marketing lemmingocracy has bought very deeply into the social media hype machine. It's too late for them to back out now.
November 26, 2012
Facebook Trying To Commit Suicide?
Facebook may be about to cut their own throats.
According to Business Insider, they will soon be launching a product that will...
"...prove to marketers that there is a type of online advertising besides Google search ads that is worth spending large amounts of money on."(By the way, that bold "prove" is not from me, it's from the gee-whiz article at Business Insider.)
Facebook better be careful. If their methodology is any good, the only thing they're likely to prove is how ineffectual display ads on their site are.
According to the article, the basis for Facebook's new product is a research tool from a company called Datalogix that allows them to correlate the delivery of ads on Facebook with the purchase of products. So, for example, they can tell Coke that of the 1 million people who had a Coke ad delivered on Facebook, 300,000 bought a can of Coke in the next 3 days.
Sounds pretty good, huh? Except there's a little problem. There's a big difference between correlation and causality. Correlations can be very misleading. For example, of the 1 million people who get a flat tire today 300,000 will probably also buy a can of Coke in the next 3 days. Does this mean getting a flat tire causes the purchase of Coke? I don't think so.
Most ad agencies and advertisers are so dumb and so addled by impenetrable "metrics" that they'll probably buy a correlation scam, if that's what Facebook has in mind. But if some smart people start asking the right questions, Facebook could find itself in deep snow. If they think they can prove substantial causality between the crappy little ads on their site and substantial purchase increases of major brands they're delusional.
Right now, small scale advertisers who don't need significant reach (dentists, weight-loss scammers, rehab clinics, and other crappy direct marketers) are willing to buy Facebook ads because they only pay for clicks, and on a cost-per-click basis they can project a positive ROI. But if Facebook thinks they can prove a positive ROI to brand marketers who aren't buying clicks and need massive reach they're asking for trouble.
The problem for Facebook here is that if this new methodology cannot prove a positive ROI to brand marketers as it promises to do, they will seriously damage their push for a reach-and-frequency based revenue model. And they will remain in the thrall of crappy little direct marketers.
They better be pretty certain they can prove what they think they can prove before they launch this thing.
Subscribe to:
Posts (Atom)
