Google ads are a con. Meta ads are a con. If someone tells you you’re just not doing it right yet, they’re probably trying to sell you something.
Google ads are a con. Meta ads are a con. If someone tells you you’re just not doing it right yet, they’re probably trying to sell you something.
We have a customer who's seeing ~30k in monthly revenue driven by their meta ads. So they can work. But they have a consult running the ads, and I assume they're doing filtering or something.
Are pretty much all ecommerce brands wasting their money on Meta ads? Seems hard to believe.
Meta ads are mostly obvious fraud afaict - unregistered lotteries, jet washes that don't need power, flashlights so powerful they'll fry an egg by shining at them, household goods developed by NASA, air-conditioning/heating that doesn't need outside air and plugs direct into a socket, ...
I've reported a few to Advertising Standards in the UK, but they're not really interested in combatting Facebook/Amazon fraud.
What's hilarious is having reported an ad to Facebook, they show you that ad more because you didn't longer looking at it. Mad.
> flashlights so powerful they'll fry an egg by shining at them
Flashlights that can do this exist. I don't know if they're being advertised on Meta platforms.
The ones advertised on Meta platforms (and others like YouTube), at least the ones I've seen, claim to do so in a device that looks like it can't have more than a tiny battery and no cooling in there, or that they actualy show using standard AA batteries, or recharging inside an hour by solar energy, or other claim that thumbs its nose to the lawsof physics. But they must be real, after all that nice man left NASA to work on it and now the nasty commercial interests are trying to shut him down! I must buy one now while I still can!
The brand name that comes to mind is the Wicked Lasers Flashtorch, which uses a 65W halogen bulb that emits most of its energy as infrared, and a ~30 Watt-hour Li-ion battery. The old-fashioned light source is better suited to party tricks than illumination.
More modern, and also capable of improvised cooking are handheld searchlights from Acebeam and Imalent with many large LEDs, cooling fans, and even bigger Li-ion batteries. There are third-party videos of these and the older halogen type cooking eggs and setting fire to paper on Youtube.
What you're describing from the ads obviously violates the laws of physics. An alkaline AA would have a hard time cooking an egg on a dead short.
yes, they are wasting money, they know it, but caveats:
famous saying 'i'd cut my ad budget in 1/2 if i knew which 1/2 to cut'
'attribution' is the holy grail of hard thing in marketing.
so they know for sure the channel spend is iffy.
but it's hard to measure, esp. for brand and indirect campaigns.
so as a 'starting point' - it's a very 'noisy channel problem'.
the next wild idea is that ads come from a marketing budget which has $X to spend, and they have to spend it.
this is where the ROI stuff is wildy upside down.
large companies with 'market power' have a lot of surplus. they put that towards relatively lucreative marketing. the $ must be spent.
the cmo makes a budget, allocates, the managers follow the campaign, front line staffers spend. they try to get the best results they can.
there is often an unbelievable lack of true roi concern in all of that.
sometimes it's very aggressive, aka for some keywords, for sure.
but a remarkable amount of $ is spent in very unnacountable way, over what are 'grey' channels anyhow.
the marketing ops person is going home at 5pm and does not care one bit about bots. they were paid to spend it, they did. Facebook is paid to 'show a chart of view' ... they did that. 'everyone is happy'.
im not saying the whole system works that way, but much of it does.
the wild part is - there is so much 'dumb big money' in ads, it makes the whole thing very inneficient.
companies like P&G have 'distribution monopolies' on so many packaged goods, they have to keep up brand awareness.
It's why so many commercials are for commodity products like home stuff - the market is huge, the market channels are locked, they pay $$$ for ads for 'toothpaste' - the least novel and least productive kind of thing imaginable.
so 'Colgate' costs $5 at the store, it costs 50 cents to manufacture - that $4.50 gross margin is stuffed into a system of relative inneficiency up and down the economy. much of it in 'nearly useless ads'.
it's a deep market inefficiency people dont want to recognized because people assume private capital is inherently efficient and that a dollar spent = GDP = value and that's it.
our lives could materially be improved if we banned ads for a lot of things - feels like 'socialism' but really it'd just be about a kind of 'regulated market efficiency'.
So the gigantic incumbents with retail distribution being inefficient makes sense to me. What about the long tail of D2C brands that live on Meta ads? AFAIK, they live and die by their ROAS. I would have to believe that these companies just don't really exist to buy that Meta ads are a "con".
the roi is better at smaller corps that pay attention, but you would still be surprised.
and where it is more efficient its where there is better attribution models aka direct sales.
note: there are certain kinds of products that are 100% 'click driven sales'. they zero brand awareness, they want to sell you that 'fleece hoodie' on the spot. those guys have their funnel math down solid.
but startups and other companies ... not the same.
well funded startups burn $ thinking it's productive - and hugely: buying fake customers, or, spending $2 to get $1 in revenue to either pad the books, show investors, make themselves feel good or 'strategic'. FYI 'strategic' is often rational. those are big pools of money.
but usually campaigns are mixed and attribution is hard, even for smaller companies.
the tighter the budget, the more 'direct purchase', the more 'nominally efficient' it is.
also note - most ad $ is big companies who ironically spend a smaller share of their revenue on ads <- this is the power of scale.
That does make sense, thanks
"that $4.50 gross margin is stuffed into a system of relative inefficiency up and down the economy. much of it in 'nearly useless ads'." is easy to disprove because we know how much these companies spend on advertising (and marketing more broadly) and how much product they sell.
It's more like 25% of their budget.
https://www.statista.com/topics/7725/cpg-industry-advertisin...
I didn't imply that all of their gross was going into ads.
I'm highlighting that the gross on commodity consumer goods is huge - and that it just pays for mounds of white collar bureaucracy, including advertising, and yes 25 points is about right.
Consider that companies pay more for advertising than COGS.
That should tell us something about 'productivity'
FB/Goog revenues could be cut by 60% and the good may very well flow just the same, aka they are not just capturing surplus but facilitate aggressive inefficient competition.
A western nation will post the $5.00 to the GDP when much of it is inefficient make-work.
This is why 'Pricing Parity' has to be used even to begin to compare relative wealth etc.
Toothpaste is a particularly high-margin product so it might not be the best example generally. COGS is generally the largest line item for CPG (or non-CPG products), and distribution isn't free either.
Toothpaste manufacturers can probably get away without advertising on FB/Goog, but I'm not sure that would work for other products or brands. It's not make-work to tell people about your product or service, although in markets with limited players you could see how a marketing arms race would drive prices up.
It's 'make work' because it's a unnecessarily competitive system wherein prices will by definition be driven up to absorb all of the surpluses of any given business.
Google and Facebook are in the business of 'economic rent' of people's attention.
25% of sales price going to Google might leave 5% for manufacturer and possibly even more for the Ad channel. Aka 'Google is where most of your profits are absorbed'.
You're not competing against product competitors - you're competing for attention of individuals, which is very narrow, through a very small number of pathways wherein there are quasi monopolists.
Your 'competitors' are actually 'value chain competitors' - Google and Meta - in this case, who require you to pay extraordinary amounts to access their captured audience.
Google is a massively 'high margin' business, which is an indication of their market power in the value chain, and they could be much more profitable if they wanted to be.
Whatever you make - you are bidding against McDonalds, Mondelez and Proctor & Gamble, not your just your competitor.
To realize this power, do a little 'thought experiment' and imagine of the 'ad layer' of the system would commoditized and extremely efficient, due to heavy competition and/or 'good' regulation (or socialization). Say for example, people were served ads with perfect efficiency, and accounting for some kind of community/regulatory guidance - which meant that 'local services and companies' were guaranteed a tranche of time, along with public services and community things - like School events, local street plays, art houses.
This could probably achieved for a fraction of the cost in the system now, and it would mean 1) the profits parked at G and Meta would be distributed to other layers of the value chain - aka the advertiser/maker, manufacturers, parts suppliers, and also to consumers. 2) likewise a system that defies the 'race to the bottom' competition of advertising (imagine very simple, relatively cheap and authentic ads) and 3) the hidden surplus of the benefit of community awareness, issue awareness, which is invisible on the GDP because 'money does not change hands'.
Another way to put it, is that the 25% spend on Ads is mostly spent on 'economic rent' not really on the cost and effort associated with that activity, in addition to that system being extremely optimized for certain outcomes (profits for private enterprise) and not others (aka 'financialization' of social and community aspects).
All of the extra money, time and effort people have to invest in fighting with each other over very limited attention, through captured attention, is inefficient 'make work'. It's the 'private economy' version of the government paying people to dig holes and fill them.
In almost all areas where there is heavy economic rent, there are inefficiencies; Advertising and Real Estate are huge ones there, there are a few others.
Obviously, Google and Meta do 'real things' - they're not fake businesses, but the massive profits are an indication of the oligarchic power and it's definitely sub optimal.
It's complicated.
SMBs can find an audience that would otherwise be impossible to reach. The thing that is advertised is so diverse it's hard to generalize, however the main thing I've noticed is SMBs live and die by the quality of their ad creatives.
For big businesses which make up the other 50% of Meta ads revenue: They are very effective in circumstances where your main offering is operational and the long term value of a customer is very large. For example it would be a very good place to advertise health insurance and TV subscriptions (which is a significant amount of the big business spend). Here I am more certain. If you didn't invent your product, and it is a beneficiary of the zeitgeist promoted by social media itself (beauty-focused, soft core brain rot), and your thing is basically fungible, you will thrive.
Why's it hard to believe? Look around you at how belligerently foolish, irrational, inefficient, dysfunctional, and confidently wrong every large organization acts. Marketing departments confidently report that their marketing campaigns work, because to report otherwise would be to have their budget slashed to zero. Ad networks confidently report that the ads you buy are effective, because to report otherwise would destroy their companies. Ads are just a tax on the consumer which result in no improvement to any product whatsoever, a pure rent-seeking middleman, an intellectual landlord, a red queen's race, a dead weight on the economy, and, of course, a trillion-dollar industry, because we live in hell.
Maybe I’ve just been unlucky for 14 years but ads almost never work (as much as you pay for them).
Ad business is the best business: you pay for something no one can reliably verify or measure. But you still pay because there is something somewhere with some correlational relationship with an uplift in some of your metrics and you’re afraid to turn it off. So you just keep paying.
If you login to the admin side of any ad business (Reddit Ads, X Ads, LinkedIn Ads etc) you are faced with a severely broken product: broken buttons, obviously wrong metrics, and other glaring bugs.
But somehow you still trust that people who cannot pull the CRUD side of the product off, are going to serve your ad accurately to the targeted audience and give you reports.
Effectiveness can vary a bunch but the majority of the time bad results are correlated to the setup quality.
There are definitely industries and situations where ads are difficult to make perform, things like a single business working against aggregator heavy environment or markets where growth is more important than profit, but overall there's reason for hundreds billions spent on online ads, this when most business can track ROI results.
One of the bigger issues I see is even 'experts' hand over control to the ad platforms to optimise their spend. For better results often you need to manipulate the systems to work in your favour, which platforms try to limit but you do what you can.
One change I feel we need is for regulation around controls and data on ad platforms to stop this ever increasing 'give us your money and trust us' type behaviour.
I always wonder who the hell is clicking these ads. I skip all you tube ads (thanks Adblock)… I never click banner ads on principle. I assume anything paying for my eyeball time is a scam.
So who is this shit working on? These companies must have detailed profiles on “people who do what we tell them” as a whole class of people. Scary.
My elderly parents regularly click the sponsored links in Google search results.
I don't think it even registers for them that they're ads (even though I have informed them multiple times).
Same for sponsored items in Amazon search results. As an adblock user it's really jarring to see their experience of the web compared to my own.
Honestly I wouldn't be surprised if the majority of actual end customers/humans (i.e. not bot farms or paid for actors) who click are not clicking on purpose. I've seen so many bad Android apps that have performance issues where content is still rendering and by the time you've tapped on where you go an add banner/link loaded up and registered you clicking on that. Zero purchase ever done but numerous 'ad clicks' generated
It works great if your goal is to pump up your install & conversion numbers so you can raise the next round of VC at 3x valuation. After a couple rounds of this, your VCs, in turn, can then use the valuation increase to tell their GPs that the value of their fund has increased by 10x. The GPs can use your reported valuation increase to report that they earned a 11.6% real return on the fund this year (13% nominal, using the reported CPI of 2.4%, which of course is nowhere near the actual increase in life's necessities but does show that you can get TVs cheap), and that therefore they beat their benchmark and should get their full bonus. Then the pension funds that invest in them can tell the state that everything is fine and of course every retiree will get everything due to them.
It's bullshit all the way down. The most valuable bullshit is the numbers that you can sell to someone else who is looking for bullshit. They're not lying; they are merely reporting what they are being told, and you can't fault them for trusting their ad networks / investees / LPs / LPs / pension plans.
>the reported CPI of 2.4%, which of course is nowhere near the actual increase in life's necessities but does show that you can get TVs cheap
I went through the CPI basket[1] and vaguely looked for categories "life's necessities" and came up with "Food and beverages", "Shelter", "Fuels and utilities", "Transportation", "Medical care", "Education and communication". Those categories alone make up 85.3% of the basket, and I didn't even bother going into detailed categories to look for other essentials. "Televisions" on the other hand makes up 0.1%. I'm sure there's more non-essentials on there, but 85% of the CPI basket being non-essentials seems... pretty reasonable? If anything, it's weighted more towards essentials than typical consumer spending patterns.
What did gas cost a year ago and what does it cost now?
And...? The CPI is a weighted basket. Gas costing 2x (or whatever) doesn't mean CPI is 2x. Is that hard of a concept to grasp?
Energy going up 16%, because gasoline went up 30%, is the main reason "core CPI" and full CPI are a full percent apart, 2.4% versus 3.4%.
Probably the most succinct description of this phenomenon I've seen in a long time.
Spent a lot of money on meta ads and it worked well for a long time.
What doesn’t work is the nonsense people try to teach about how to optimize it.
It’s what got me into programming in first place, since most strategies can be automated, but there are still companies paying money to people to manage their ad spend.
Add Reddit Ads to that, all the alleged clicks not one comment or conversion.
I get my app is probably bad but you'd expect at least one comment out of 100 "clicks" to say something.
Even with certified real humans who actively clicked rather than being counted one if the many ways these counts are padded accidentally (or not so accidentally), you might be expecting far too much of their attention span when expecting a full 1% to care enough to think long enough to respond before scrolling on. It is worse these days than it used to be, because many who might previously have bothered may instead assume they'd probably be taking to a bot.
Unless you somehow insult their favourite entertainment franchise / political party / deity / etc., or praise one of the same that they don't like. That will get you piles of responses, though not in a way useful to your app!
I have a theory that there are far fewer genuine users on Reddit at this point than you'd expect.
The incentives to create fake engagement to satisfy their actual users who want discussion are quite clear. Doing this also gives reddit an advantage when monetizing their data. Scrape posts & comments for free, and you won't know which are LLM-generated and which at least have a human in the loop (but the human still may use an LLM, so this is where fingerprinting comes in). Perfect for incentivising the ai labs / other consumers of reddit data to pay up for an official feed.
Going back to its roots: https://www.reddit.com/r/TheoryOfReddit/comments/v8xgq/watch...
Reddit may be the most manipulated social media there is.
Guess why we are getting “age verification” everywhere, lobbied by Meta.
It is not to protect the children.
If one runs a small business, one has to pay Google/Meta; otherwise, their businesses will be bottom of the search. It is a tax now.
Eh, I think you're correct in most cases but they work relatively well for our property leasing office. There's a convergence of factors at work there though; small number of high priced products being offered to a relatively small number of people in a certain geo location.
Not limited to ads.
this is the only correct response.
idk, i’ve spent six figures on meta ads in the last few months and gotten tons of real users for my app. how is that a con?
How has been the return? 6 figs is a lot if your users aren't earning you that money back.
I dabbled with this 10-15 years ago.
I always ignore all numbers on the dashboard. All I care about is how much I paid, and how much revenue went up in following weeks.
I never could quite get that number positive.
Ah yes, the "you're not spending enough" excuse, Reddit loves to use that one me.
This was also my experience wasting $1500 on Google ads
The main problem with Google Ads is that Google tries to squeeze money out of you in all possible ways.
I think the only sane way tu run a Google Ads campaign is to:
- only enable Google Search ads (i.e. disable all third-party publishers -- this may be a bit extreme but it's good if you're advertisting a niche product that people are actually searching for)
- only use "exact match" keywords ("broad match" is so broad that Google will show your ads in completely unrelevant SERPs)
- disable AI Max
- disable all automations
- reject any of their "optimization" tips
- set a max CPC even if they say it's bad for you
In other words, reject everything they suggest you to do. Maybe I'm wrong, or maybe this only works for my use case, but that's how I've been using Google Ads succesfully without wasting money.
Also: run experiments to find an "optimal" budget with the right size for your target audience. If you, e.g., set a too restrictive geographic rule, but also set a budget higher than what they manage to burn showing your ads at the area you defined, they will override the rules you set up to guarantee 100% of your money will be burnt.
> only enable Google Search ads
Except then they just don't run your ads unless you're willing to pay silly amounts like $3 per click for bot traffic.