Comment by ndiddy
19 hours ago
It reminds me of an analogy I read a while ago in an article critiquing keyword based online advertising (can't find the article unfortunately). A restaurant wants to drum up new business, so the owner tasks three employees with handing out flyers with coupons attached. The coupons are marked to identify which employee passed them out, and each week the owner gives a bonus to the employee whose coupons get redeemed the most. Week after week, the same employee keeps getting the bonus. The other two get more and more suspicious. Is he some kind of marketing genius that's able to get tons of people to use his coupons? Finally, they ask him how he does it. He says, "I stand in the waiting area of the restaurant".
This guy's publisher is paying Amazon $1/click to show the book to people who are already going to buy the book. It's basically the same thing.
You raise a good point. This phenomenon is well-documented for at least two decades now on Google search. It is common for brands to buy keywords for their own product. Why? If not, competitors will by the same keywords to direct customers away. As I understand, this has existed for more than 20 years and Google has never been sued for it (that I know). Maybe this is just part of a highly competitive online search market. To be clear: I am not saying that I like or agree with this market outcome as a consumer, but I am merely saying it has existed for a long time and gov't regulators don't seem to really care.
I don't know how it is for large businesses, but if you're a small business, and you put your own business name as a search keyword for your ad buys, fully half or more of your ad spend will be your existing customers looking for your website, phone number or address. If you stop spending on it, they will still find you, but a competitor will probably show up above you. I am not sure this matters.
Depends on what ads are showing and what they are bidding (vs. what you can afford to bid for the marginal traffic) but yes can be very much worth it to pay google's troll toll.
Google has been sued for displaying ads on trademarked keywords though.
This is what I wonder… the author says that:
> The highest-yielding ad my publisher has tested so far is the search “Seth Godin The Knot“
But that doesn’t mean the ad is a good investment. It isn’t just about the yield from the ad, but about the DIFFERENCE in yield between having the ad and not having the ad.
It is really simplistic thinking to just look at conversion rates.
I'm equally confused here. Who searches "Seth Godin The Knot" and if the first result isn't that exact book, goes and buys a book about knots or weddings or something? The book should be there in plain view at the top of organic best matches. Did they really test this "yield" claim?
Sophisticated advertisers measure “incrementality”, which is exactly what you’re talking about. Alas, most advertisers are not sophisticated.
It’s worse than that. If that employee isn’t standing in the waiting room, handing out coupons some other restaurant’s employee will be standing in the waiting room, handing out coupon for the restaurant next-door.
Oh, and you have to pay the building owner for the coupons which also discount your food.
The term for this that I heard is:
> Advertising as inference not influence.
People buying ads want to influence customers, but the platforms can instead focus on finding the folks who are already going to buy the product and show them the ad in order to gain the sweet sweet attribution saying "I am responsible for the sale".
You can test this by taking your ad-spend and flatly multiply it: if you spend 5 times as much money to advertise to 5 times as many people, but your sales don't also go up by 5x, then the money you were spending at the 1x rate probably wasn't influencing the buyers either, instead the ad companies were merely targeting all the customers you were already going to get sales from.
This reminds me of my dad's story about decades ago as a kid paperboy they had a contest get people to sign up and who ever had the most after a few months would win a bike. He smoked everyone. They were desperate to know how he got so many people to sign up but he refused to tell them.
His trick, well back then for a nickel you could go to a paper vending machine and buy a paper. But it would just open up and you could literally grab all of them if you wanted. So for a month every day he sacrificed a nickel and essentially stole about 20 papers. He then delivered them to non customers along his route for about a month. Then he left a note "if you have enjoyed your free trial of the paper and would like to continue as a customer....". He won the bike hands down and never did tell the paper company how he got so many new starts.
This case is even worse than the restaurant parable, because in that one the customer is already pretty much guaranteed and the coupon will give them enhance satisfaction that makes them more likely to come back. In Godin’s case, the customer doesn’t get that $1 and may not even buy the book, they may e.g. just be looking for the page to read reviews or link it to someone else.