You can tell by turning them all off. Ask Kraft Heinz.
Beyond that it gets fuzzy. Is it inefficient? Yes. Does anyone agree on the actual mechanics? No. Is the data wildly inaccurate? Sure. Is there grift? Totally.
And it’s like a room on a cruise ship — the boat is gonna sail one way or another. So it has to be sold.
Advertisers might choose to let Facebook arbitrage those impressions into a cost per click model — at pennies per click instead of hundredths per view. Tradeoffs galore in that model.
When you aggregate these numbers into a $600b industry, you start to see how sweating some of the finer details just doesn’t matter.
super shaky reasoning. the less rooms that get sold, the less likely future ships are to sail or even be built. individual decisions matter in aggregate
I think it’s an opportunity. The original premise of google is that targeted ads would let you benefit from “sweating some of the finer details.”
If 1/3 of a $600B market is wastage or fraud, then that’s an opportunity to give advertisers better response for their spend. Really massive.
I’m sure advertisers would like more sales by being able to remove the waste ads. Currently they can’t do that. But if some new company or tech allows for that, it’s worth trying to figure out.
Its probably impossibly to conclude with any confidence that the results were simply due to cuts to the ad budget, cuts to the budget and cuts to operations, or simply cuts to operations. Ads are also not commodities. An ads effectiveness is also not the result of pure spend, cheap ads can be very effective and expensive ones can also not be effective and vice versa.