As the revenue of the big tech companies such as Google and Facebook mostly come from advertising, you can tell this is an enormous market, and a lot of companies are willing to invest huge amount of money in their marketing on digital platforms. However, I always wonder if their investment really worth it. As I perceive my behavior when it comes to using the internet, I don’t find myself really pay any attention on the ads, no matter it appears anywhere, even if it pops up itself and force me to watch, I would rather do some other stuff at the same time. Although I know not everyone’s behavior is just like me, but still, there must be some of them out there. From what Tim Hwang, a former Google employee, said, he expected the Ad tech could be the next internet bubble.
First, he stated that a lot of researches supported the idea that companies’ return on investment in digital marketing are often negative as the accuracy of the targeting is extremely poor. Next, even if the targeting works, which means that the ads are served to the companies’ intended audience, a lot of them are never be seen, because they are placed in the corner or bottom of a page, which the audience wouldn’t have noticed. Despite the ad is powered by technology, it still doesn’t work like human expected at first. Moreover, there are even the rise of the ad blocking system, which help the audience ban the ads. Therefore, the gap between the expected and the actual value of digital ads in pretty big, and one of the problems is that the companies who invest on these digital ads don’t even know how to measure the performance of digital marketing accurately based on the statements from Tim Hwang. Scientists, psychologists, marketers, together with the power of modern internet technologies should try to figure out these questions in the field of digital marketing and provide better solutions to the companies.
Sources:
Ad Tech Could Be the Next Internet Bubble
https://www.wired.com/story/ad-tech-could-be-the-next-internet-bubble/
image: the cover page of Tim Hwang’s book
Dear Tsai Yun-Ju,
Your post was highly interesting and has triggered me to express my opinion regarding this topic. I agree with you that the global online advertising industry is mind-boggling large and that this leads experts predicting an industry meltdown. Also, i share the experience with you that i often perceive many ads as “stupid” or “misplaced”. However, i also catch myself falling to online triggers, where i do not even realize that it was an ad. As an example, search engine ads are increasingly more difficult to distinguish from organic rankings and highly effective in boosting your site’s traffic. Google makes the majority of its ad revenue from search engine ads, where companies bid on specific keywords, used by users searching with google. In my personal experience working at a dutch ecommerce company, google ads are highly important and you can really feel the difference when you have paid campaigns running or not. This is particularly the case for novel companies that have weak organic rankings. Also, ads are increasingly becoming personal by companies tracking your cookies and targeting you with your past browser history.
I am also very excited to see where the ad-industry will go and especially how businesses such as newspapers that were heavily reliant on offline-ads, will survive in the digital age.
Regards,
Luis