P&G and WPP: How shit hit the fan in digital marketing

https://mumbrella.com.au/pg-wpp-shit-hit-fan-digital-marketing-502769

154 71 8 years ago

mumbrella.com.au

I love the irony of there being several ads on that page.

rblatz• 8 years ago

I read the whole article, and don't use an ad blocker. I don't recall seeing any ads on that page. I find that pretty humorous.

gk13• 8 years ago

This is true for startups, too. If your marketing team (or agency) is running ad campaigns, demand evidence of its contribution to the bottom line.

Also, ensure your marketers’ self-worth is not tied to the outcome of the campaigns they’re running; or else they will hide bad outcomes.

I regularly shut off campaigns if there’s no evident benefit of keeping them on, regardless of what the industry says. For instance, a lot of people talk about retargeting, but I have not seen any success with retargeting after trying with 5-10 clients.

I also discovered that Twitter charges you for accidental clicks on your ads even if they know they’re accidental. Also, these accidental clicks made up >90% of clicks on one campaign I ran.

It’s reassuring to see the big players come to the same realization.

mgkimsal• 8 years ago

or else they will hide bad outcomes.

A couple folks I've worked with over the years go out of their way to highlight some of the bad stuff, and use it as learning material for future work. But it's usually coupled with "hey, we're partway through this, but the numbers are looking pretty bad right now, we should probably stop this now and rethink things". That said, I've generally only been at the smaller-self-serve side of things - the ability to stop/start campaigns with 5 and 6 figure budgets is probably a different ballgame.

libertine3• 8 years ago

demand evidence of its contribution to the bottom line

If agencies have no access to business metrics, isn't this burden upon the advertiser to evaluate the campaigns in terms of business metrics?

Media agencies have their own kpis of success - a campaign can have a good performance media wise, but have little to no impact on the business.

You can say: "well... blame the creative agency for their poor campaign concept!" ... you can say that... except they work with what they have: a specific brand and a product/service.

No agency controls distribution, pricing, placement, quality, customer service, and many other variables that dictate the success of a campaign.

It's easy to blame agencies because they are outside organizations. You are a pitch of way of cleaning your bad decisions as a brand or marketing manager.

The client is always right, even when the client is wrong.

gk13• 8 years ago

You're right, my comment applies more to in-house marketing teams or whoever is managing the agency, and not the agencies themselves.

ameister14• 8 years ago

I'm right there with you on retargeting. It's been my experience that this is smoke and mirrors and something that a client can sell to their bosses because it sounds like it would work.

If a campaign isn't working, I talk to our client about it and if I think I can fix it, I'm open about that too. It's easy to spend tens of thousands of dollars on useless ad spend optimized for the wrong things, and it's unfortunately the responsibility of the advertiser at this point to show their client what metrics actually matter, how to track them, and to give the client the ability to check in whenever they feel a need to.

This shouldn't be the case, but I think a lot of companies hire people that are technically illiterate to run marketing and they just chase eyeballs.

tuna-piano• 8 years ago

How do you figure out that a specific campaign doesn't work? For example, in the bit of online advertising I've done, I've seen nice conversion numbers from retargeting campaigns.

But how do I know these users wouldn't have bought anyway?

gk13• 8 years ago

With attribution tracking that shows which visitors became paying customers (or qualified sales leads), and where they came from.

treis• 8 years ago

That's the crazy thing about mobile ads. I've clicked on hundreds, if not thousands of the things. Never once was it intentional

yourdonut• 8 years ago

What I find odd is that digital ads gives you much more clarity of impact than tv/radio/print ads. It also gives you more detailed cohort data so that you can learn from experiments and adjust your buys based on where the impact is. It's as if the P&Gs of the world woke up recently and realized they need to understand impact of their media buys in general.

mjevans• 8 years ago

My own personal opinion is that most of the time ads don't work.

They're noise that might, at BEST, bias the result of a decision I was already willing to make. (IE: I know I'm going to go somewhere for lunch and MAYBE an ad makes me pick one place over another.)

Really I see ads being useful only in three categories:

    * Reminding a prospective customer your store exists
    * Reminding a prospective customer what you sell
    * Getting a customer to crave something you can provide.

The first two are generally good, however they don't really need to be done all that often. Once someone knows a service exists they'll likely return for more if they liked and need more of that service.

The last one is arguably amoral. Encouraging (needless or extra) consumption and trying to make someone dependent on the ad buyer for happiness. It also sounds a lot like what drug dealers do.

Even that third category, if a product was adding actual value or quality, needn't be done that often to reach effective saturation.

soared2• 8 years ago

bias the result of a decision I was already willing to make

Literally the definition of advertising

smacktoward• 8 years ago

It only gives you that clarity if you're getting the data unfiltered, though. As I read the article, the problem P&G was running into is that it was outsourcing the placement of its ads to third parties, meaning they didn't get access to the raw data on how those ads performed -- they only got whatever data the third party chose to share with them, packaged up however the third party chose to package it. That kind of relationship opens up all sorts of opportunities for the third party to fudge the numbers to serve their own interests, which is what it sounds like P&G decided was happening.

joncrane2• 8 years ago

This is the best analysis I've seen so far.

mirimir5• 8 years ago

Ads offend me. They're an imposition, distracting, mind pollution. So I block them. And even when I see them, using a browser in a LiveCD etc, I pointedly ignore them.

Now maybe I'm unusual. Long ago, I did get used to an Internet without ads. And was sad when malware and ads started showing up. But given the increasing prevalence of ad blockers, I'm not that unusual.

So anyway, average view time of 1.5 sec for ads seems about right. Especially if that average includes lots of zeros.

carlivar• 8 years ago

Do you subscribe to any digital media as an alternative (or I suppose, as an alternative to the ad blocking alternative)?

karljtaylor3• 8 years ago

usually, reactions like this are indicative of being more, not less susceptible to advertising.

case in point: LiveCD is a branded capitalization.

oligopoly• 8 years ago

What you get instead is native advertising - news that are in reality ads, fake reviews, paid comments to social media, forums.. and all that jazz.

wolco• 8 years ago

Be careful where you place your attention. If you let it wonder people will distract with opinions and ideas.

Macha• 8 years ago

Or to put it another way: what is the viewability of the side of a bus? A digital campaign with the same stats would have serious complaints.

karljtaylor3• 8 years ago

I think it's lamar that frequently runs spots that say something like "if you see it/it works!"

usrusr• 8 years ago

What I find odd is that digital ads gives you much more clarity of impact than tv/radio/print ads.

That really depends on what you are trying to sell. A SaaS? Sure. But when your job is influencing which candy bar people select in the supermarket, you stare into exactly the same informational void, until you apply the crude but tried toolkit of ad effectiveness measurements that has been developed for broadcast. The traditional answer to that kind of advertisement task has been to just use blanket media if you don't need much targeting or direct affordability. But when a sizable part of the market just does not expose themselves to broadcast anymore, that might be insufficient, no matter how much money you throw that way.

MarkMc• 8 years ago

But when your job is influencing which candy bar people select in the supermarket, you stare into exactly the same informational void

Is that necessarily true? Most supermarkets have a 'loyalty card' program which requires the shopper to provide her name, address and date of birth. The supermarket could sell all their data to Facebook, which would then have the fine-grained information needed to allow the candy-bar company to very effectively target their ads.

It might not even require a loyalty card - the shopper's credit card info or security camera picture might be enough to accurately link her to her Facebook account.

cronjobma• 8 years ago

I feel there's so much to gain in the advertising space. Companies want to advertise, publishers want to make money and consumers want to learn about stuff they love. I wonder if there are startups tackling this problem. If you can create something that all 3 stakeholders love, you can change the landscape.

biznickman• 8 years ago

Not to be self-promotional but the company I work at is tackling the problem in a way that at least helps 2 of those parties if not all 3 (unified.com). Albeit my commentary below is my own personal take.

Providing transparency to the marketers enables them to provide better targeting, more efficient spend, and in turn provide a better experience for their customers.

One other note pertaining to agencies. They'll continue to exist but the world where they can just blindly spend money is coming to an end. Previously they'd have a random ad buyer in the agency just go and spend the money. Those days are coming to an end and the free margin is going to instead go to reward those agencies that more effectively manage spend.

More transparency --> More insights --> More efficient spend --> Better overall experience.

wmeredith• 8 years ago

Consumers want to learn about stuff they love? What? No one wants to be sold something.

matte_black• 8 years ago

Also, I am told by industry insiders, a “blockbuster” study on media performance in the UK is coming in the next few days. It will make the digital ad industry apoplectic and have them screaming.

Can't wait to see this one on hackernews in a few days. Is 2018 going to be the worst year yet for digital ads?

zombieprocesses2• 8 years ago

Also, I am told by industry insiders, a “blockbuster” study on media performance in the UK is coming in the next few days. It will make the digital ad industry apoplectic and have them screaming.

Hard to take someone seriously when they talk like that. Also it's hard to take the publication seriously when they write nonsense like that. It sounds like local car company or mattress company advertising. "These prices are so low that it will have you screaming!".

Is 2018 going to be the worst year yet for digital ads?

Worst year yet? Digital advertising has been growing by at least double digits for the last 10 years.

It surpassed TV ad spending last year.

https://www.recode.net/2017/12/4/16733460/2017-digital-ad-sp...

Digital ad spending is going to increase. It's where the young people are.

It might dip as the corporate elite try to control social media, but for it to have the "worst year yet", digital ad spending would have to drop by 99.99% of last year's spending to get to 2000s level spending. We already surpassed that the first week of january.

nikanj• 8 years ago

I don't think that's a fair way to measure "worst year yet". If your agency's sales drop by 20%, it doesn't console you to know that the industry overall is much bigger than it was in 2000.

pmcgrathm2• 8 years ago

As someone who has been responsible for a bit north of $1B in profitable, attributable digital ad spend in my career, I can say with conviction that the problem comes down to analytics and misalignment of incentives, NOT the performance of digital media channels.

1)Agencies charge on a % of total media spend, and are thus incentivized to spend more.

2)Advertisers net benefit from expected lifetime value and revenue generation, but are often reticent to share this type of information to an agency.

Agencies are commonly unable to get access to business-level health metrics such as churn, RPU, LTV, and thus optimize to top of the funnel metrics that often do not correlate with attributable lift but do correlate with showing the value of increased levels of spend. Such metrics include click-through rate, viewability, brand awareness and safety, fraud mitigation, etc.

This, combined with the improved ease of use for major digital platforms (I know quite a few startup CEOs who manage all of their PPC/Facebook ad spend), is why the agency model has started to fail. And that is a good thing.

The less intermediaries that touch an advertising campaign, the less likely it is that we as consumers will see an irrelevant ad.

baybal23• 8 years ago

It is, better to say, a sunset for the industry as such.

Digital ads had the most wow effect at the time of google's text ads and Internet yet not being a general demographics' thing.

Back then, they were able to show numbers, but not now.

First generation internet users were mostly highly technically literate, high income professionals. Now, the user ratio has reversed.

You can argue that putting efforts to find a needle in a haystack was still paying off when the majority of needles were of incomparably higher marginal value than they are now: consumer goods clicks, say, are lower value than commercial equipment sales clicks, yet you still have to put an equivalent or greater effort to datamine somebody to make them buy an accursed face lotion even if the number of face lotion buyers is 1000 times bigger.

This is a tragedy of the Internet ad industry. There is a finite amount of eyeballs, and the amount of companies with a substantial money wanting to sell you a face lotion will always eclipse the amount of companies who market unique, relevant, specialty products one may actually be actively looking to buy.

soared2• 8 years ago

I don't understand your critique:

unique, relevant, specialty products one may actually be actively looking to buy

This is because the number of people who buy normal lotion is 1000x the number of people who buy unique specialty lotion. Why would the advertising be different than the market?

First generation internet users were mostly highly technically literate, high income professionals. Now, the user ratio has reversed.

The internet reached the masses - how is that a negative for advertisers? They have more people to advertise to.

yet you still have to put an equivalent or greater effort to datamine

This isn't true. For lotion you buy lotion related keywords, for commercial equipment you need in-depth research about those products, use cases, industry terms, and the queries people use.

rhizome• 8 years ago

putting efforts to find a needle in a haystack was still paying off when the majority of needles were of incomparably higher marginal value than they are now

Was this back when Google included the referrer URL with each needle?

pmcgrathm2• 8 years ago

This is a tragedy of the Internet ad industry. There is a finite amount of eyeballs, and the amount of companies with a substantial money wanting to sell you a face lotion will always eclipse the amount of companies who market unique, relevant, specialty products one may actually be actively looking to buy.

It has little to do with having a large amount of money to spend on ads and more the level of severity of the problem your product solves for the 'eyeball.'

Humans have some needs that are greater than others, and ad dollars spent at alleviating pain or providing for those needs will always get at the most eyeballs. Entire industries - born online - have developed around capitalizing on solving for these needs.

I need money - Predatory loans and credit card offers. I need to be skinnier - Nutraceuticals (Dr. Oz), weight loss, vitamin crazes. I need to be beautiful - Skin care, facial lotions. I need to be less lonely - Online dating, pornography.

The list goes on. The point is - there are more people looking to be skinny, beautiful, rich, and married with children than there are people looking for 'commercial equipment sales.'For now, and until targeting gets smarter and consumers opt to share more data about themselves, those products will win the majority of ad clicks.

We'll get there. (eye roll) Maybe decentralization is the way? :). I'd love to give the Google/FB duopoly a kick in their 'walled garden.'

libertine3• 8 years ago

As a former fellow digital media manager who worked for a WPP agency - you're right.

I would just add that, agencies have clients that are nice to have in their portfolio but they give more work than they invest.

So you have a business model built on % of investment - something that worked very well for massive TV Campaigns budgets (plus the rappel you'd get from TV Networks) - applied to time consuming campaigns that required a lot of FTAs.

I just don't agree much on the "ease of use" - the digital media landscape is quite complex.

A proper digital media campaign (part of a media campaign) has media managers, digital media managers, PPC Managers (let's say they manage FB and Google advertising for the sake of simplicity), AdOps, and Programmatic Teams - you can add on top of this SEO teams, Social Media teams, etc.

Yet advertisers don't want to move one inch on this business model - let me tell you i've seen them criticizing how many hours a proper Search campaign takes, with no knowledge of the matter. Some, like you've said, are bringing in people for digital media management, campaign management ... hell some are building their own PBUs!

I don't think it will work. It's not something new: it was done in the past with TV, and they come to realize the cost of the know how being stuck on their end it's too expensive.

Oh and P&G, and many other advertisers are to blame here as well - the marketing/brand managers don't want cuts on their budgets, so they make reckless decisions, wasting money just to claim they invested it and will require more budget in the next fiscal year.

Media owners are also suspects, the greed made them dependent on Google and Facebook... now their brands are diluted.

Unfortunately agencies failed with the golden egg goose - attribution modeling... attempts were made but it's not something trivial.

gargarplex• 8 years ago

I'd like to network with you. Would you send me an email? My contact info is in my HN profile, https://news.ycombinator.com/user?id=gargarplex

tonyedgecombe2• 8 years ago

the less likely it is that we as consumers will see an irrelevant ad

As a consumer I don't want to see any ads, in particular I don't want to see well targeted ads because they are the ones most likely to change my behavior.

snissn• 8 years ago

Do you ever watch movie trailers before watching a movie? Do you buy things and want to research your purchases?

golergka2• 8 years ago

Why would you see such change in behaviour as something bad? Personally, I'm thankful for targeted ads from companies that I love about new products that I don't follow myself. What's your experience with them that is so negative?

mathattack• 8 years ago

It amazes me that P and G pays outside agencies huge heaps of money to agencies that sit between them and the advertisers. Seems like a slam dunk to move in House given the incentive issues.

nopriorarrests• 8 years ago

in some cases agencies really add value and have competencies which are not that easy to insource back.

some examples:

for smallish advertisers (this is not P&G, I understand) agencies can negotiate much better terms, because agencies are buying in bulk.

and if you are interested in performance marketing with clearly measurable results, building a good internal team could be a challenge as well.

so, it's not a slam dunk.

notyourday• 8 years ago

Except that agencies do not pass those "much better terms" to the clients.

pawelk• 8 years ago

for smallish advertisers (this is not P&G, I understand) agencies can negotiate much better terms

It's more than that. As a small business managing your own ads you can get your account suspended without explanation and any way of recourse just by raising some flags. But being a WPP subsidiary you get assigned an account manager that guides your team trough the process, shows up with presentations, gives early access to tools and ad formats not (yet) available to the general public and makes sure your doubts get resolved before the ad goes live. If you get flagged, they call you to help fix things.

Keep in mind WPP spent $2B on Facebook in 2017, which is 5% of Fecebooks $40B revenue that year. Similar with Google, WPP brought in ~$5B out of $110B Alphabet's revenue.

nitwit005• 8 years ago

The big firms tend to have fairly involved campaigns that are a mix of mediums TV, radio, billboard, internet, and so on. Creating the art and media for those, and setting it all up isn't exactly trivial.

einrealist• 8 years ago

If that becomes a trend, wouldn‘t that increase the amount of poor quality, even malicious ads as ad companies have to lower prices and be less selective about their customers?

elorant• 8 years ago

This looks like the perfect storm for online advertising. For one, ad blocking is on a steady rise and it seems that it got the networks worried to the point that Google tries to circumvent the whole trend by supporting better practices. Then we have the upcoming GDPR ruling in EU which could wreck havoc to advertising networks. On top of that we have ad fraud which has gone to new levels especially after the story about Methbot broke out last year. And now we see major consumer brands pulling out of online advertising.

I have to admit, I love this whole situation. Online advertising has long stopped being useful and it's becoming malignant hurting the medium in so many ways. It seems that ad networks don't bother at all to fix any of the problems from privacy to malware and whatnot. So fuck them. Let them wither and die for all I care.

igorkraw• 8 years ago

And let the micropayment dream rise in it's wake!

With classical stuff like Liberapay, patreon and buy me a coffee and more fancy stuff like Cryptocurrencies, we should finally be able to fund our stuff differently.

nl• 8 years ago

It's a pity there is so much misunderstanding about what this spend is.

Most people seem to have a reasonable understanding of the "sales" side of the advertising business, where you are trying to get someone to buy your products. That's not what this is. This is the marketing spend, where you are trying to get people to know about your product.

This isn't your typical search engine, facebook or retargetting spend. A very large amount of this is video and/or display advertising, and the intention isn't to drive click-though. Instead it is to drive "brand awareness".

The theory here in the FMCG (fast moving consumer goods - think toothpaste or shampoo) segment where P&G plays is that a consumer needs to be familiar with a brand before they make a choice to buy it - especially if it is more expensive.

So the sequence goes:

Make people aware of brand (brand advertising: TV ads, Video ads, Stunts etc)

Get people to try brand (special offers, discounts, co-selling)

Let retailers fight for the sales between themselves (display setups in shops, retailer discounts, recommendation engines in online shopping, maybe click-through advertising)

This "brand awareness" is something which is much harder to measure (I think survey panels is the state-of-the-art still). The digital advertising industry still hasn't solved multi-touch attribution in the sales side of the business, and this is way earlier in the buying cycle.

joncrane2• 8 years ago

According to MarketingWeek, Mark Pritchard of P&G had this to say on Thursday: “If entrepreneurs can buy digital media, why can’t the brand team on Tide, Dawn and Crest be entrepreneurs and do the same? They can, and they will.”

The big question here is, were the famous Super Bowl "Tide Ads" created by the Tide brand team, or an external consultant!?!?

Maybe P&G are emboldened to publicly speak out due to the success of that campaign?

debacle• 8 years ago

The bottom was starting to fall out ~8 years ago when I was doing analytics for a series of P&G content funnels.

That was when I first understood how valueless online ad sells are. In the sophisticated model we had (which filtered out bots, spam, paid for clicks, etc), P&G was in some instances paying at least (I only had our costs) $1000 CPM for views. Of course, in the data they saw, the numbers were far far lower.

Intermernet2• 8 years ago

I recently came across a digital marketing trade publication which was advertising a conference in Australia (Melbourne I think, I may be wrong).

The key subject of the conference was to be the loss of trust from consumers due to the indiscriminate collection of personal data by advertising companies / channels.

The discussion wasn't around whether or not the advertising industry should curtail this data collection, or perhaps be more responsible with it's use. The discussion was about how to change the customer's perception that this data collection was a bad thing at all. I then realised how out of touch this industry was with reality. As the article stated "Reality was always there for anyone who wanted to see it. An idiot blogger I know has been writing about it for almost 10 years."

I'm admittedly anti-advertising (especially the current approaches to "digital" marketing) but I do see it's worth when done in a responsible, balanced way. This insight into the way the industry reacts to the concerns of the customers has only confirmed my previous negative opinion.

I'm not sure if cutting out these "holding companies" from the equation will result in any change from the customer's point of view. It will probably just end up with P&G hiring a bunch of WPP staffers to run their in-house operation. This may kill off a few industry middle-men, but it will probably just result in higher profits for P&G with no benefits to the consumer at all.

tialaramex• 8 years ago

So far as I can tell a large fraction of adverts "targeting" me don't understand time's arrow.

I bought some very expensive high heels as a treat for myself. They don't make them in my size, I bought them because they're beautiful and put them on display.

In the following weeks I received lots of advertising for those exact shoes. Not for high heels generally, not for nice frocks, and certainly not for glass display shelves, just endless adverts for the same exact pair of shoes.

Somewhere a "digital advertising executive" is telling their client that these adverts were very highly correlated with sales of the shoes. Of course, they'll disclaim, correlation isn't causation. But it is - that's their dirty secret, just the reverse of the causation pretended to. Advertise to people who are already buying the product, then say "See advertising works".

The shoes are the most blatant example because they're so noticeable (I did not spend that much on shoes which are merely a pretty red colour or covered in sparkles) but I even saw this for mundane things like a Seagate hard disk. I purchased the disk a week ago, immediately I began to receive adverts for it, and they tailed off after a few days. Every single penny spent on that advertising was wasted, I already _bought_ the hard disk. The online grocery store I sometimes use actually builds custom adverts with my exact list of groceries in it, then advertises them to me the day after I order them for delivery, again a human looking at this can see instantly that it's insane, but so long as you don't understand time's arrow (and an advertising algorithm has no a priori reason to do that) then the correlation looks really good...

irremediable• 8 years ago

You make an interesting point about something I thought I understood, but actually didn't.

I always assumed the point of this advertising approach was that it's messy, but it works. Someone who just bought shoes probably won't be buying a new pair ASAP, but there might be better odds than for any random person. Maybe they like shoes, maybe they'll return them, maybe that's their go-to gift for friends.

I genuinely hadn't thought it might just be an exercise in fudging correlation numbers to make ads look more successful than they are.

P&G and WPP: How shit hit the fan in digital marketing

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