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elgrantomate | 4 months ago
Wayyyy back in 2000 I ran ad ops for Lycos which included a ton of other sites that they had acquired. We did an audit that uncovered the fact that 25-75% of traffic/pageviews/visitors/ad impressions were due to bots. We did our best at the moment to block some more of them, but it was losing game then, as now.
Advertising, especially online advertising, is a largely a waste of money. Overall, it's obsolete and while it may generate what seems like economic activity, it's a net loss as a use of our time and money.
toast0|4 months ago
Advertisement has always been largely a waste of money, the problem is always trying to figure out what part is a waste and what part is effective. Internet advertising promised to be more specifically targeted and attributable than previous advertising models, but I don't think that really turned out well.
As an advertiser, you really have to work hard to know how things are working. Ask customers to tell you how they found you, but know that customers don't always know and don't always share what they know. Adjust advertising campaigns (including turning them off) and see how things change, but changes take a while to filter though. And you've got to do all the other things too --- a lot of new or smaller companies make the mistake of spending a lot on advertisements to drive traffic to them when they can't service the traffic: coupon campaigns that get too many people in, or sending you to a page that's unclear or difficult to use so people bail out, etc.
The article claims 50k visitors, 47 sales, $4000 in ad spend; it's not really clear if that's overall visitor numbers or just from the traffic attributed to advertising. Measuring success by visitor numbers or sales counts was never the right way to measure success; the numeric measure of success for a business should be an accounting measure of net income [1], which is only somewhat related to visitor and sales count. If this business generates $500 of net income for every sale (excluding advertising costs), then $4000 in ad spend to generate 47 sales seems reasonable; if they generate $1 of net income for every sale, then $4000 in ad spend is highly problematic.
[1] GAAP or adjusted as appropriate to the business