In an earlier blog post, I talked about how sites that generate purchasing intent (mainly “content” sites) are being under-allocated advertising dollars versus sites that harvest purchasing intent (search engines, coupon sites, comparison shopping sites, etc). As a result, most content sites are left haggling over CPM-based brand advertising instead of sponsored links for the bulk of their revenue.
But there is an additional problem: even among sites that monetize via sponsored links there is a large overallocation of advertising spending on links that are near the “end of the purchasing process” (or “end of the funnel”). For example, an average camera buyer takes 30 days and clicks on approximately 3 sponsored links from the beginning of researching cameras to actually purchasing one. Yet in most cases only the last click gets credit, by which I mean: 1) if it’s an affiliate (CPA) deal, it is literally usually the case that only the last affiliate (the site that drops the last cookie) gets paid, 2) if it’s a CPC or CPM deal, most advertisers don’t properly track the users across multiple site visits so simply attribute conversion to the most recent click, causing them to over-allocate to end-of-funnel links 3) if it’s a non-sponsored link (like Google natural search links) the advertiser might over-credit SEO when in fact the natural search click was just the final navigational step in a long process that involved sponsored links along the way.
What this means is there are two huge misallocations of advertising dollars online: the first from intent generators to intent harvesters; the second from intent harvesters that are at the beginning or middle of the purchasing process to those at the end of the purchasing process. This is not just a problem for internet advertisers and businesses – it affects all internet users. Where advertising dollars flow, money gets invested. It is well known that content sites are suffering, many are even on their way to dying. Additionally, product/service sites that started off focusing on research are forced to move more and more toward end-of-funnel activities. Take a look at how sites like TripAdvisor and CNET have devoted increasing real estate to the final purchasing click instead of research. For the most part, you don’t get paid for the actual research since it’s too high in the funnel.
As with all large problems, this misallocation of advertising dollars also presents a number of opportunities. One opportunity is for advertisers to correctly attribute their spending by tracking users through the entire purchasing process (in the case of cameras, the full 30 days and multiple sponsored clicks). Very likely, these sites are currently overpaying end-of-funnel sites (e.g. coupon sites) and underpaying top-of-funnel sites (e.g. research sites). There is also an opportunity for companies that provide technology to help track this better. Finally, if over time advertising dollars do indeed shift to being correctly allocated, this will allow research sites to be pure research sites, content sites to be pure content sites, etc instead of everyone trying to clutter their sites with repetitive, “last click” functionality.
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Chris,
Insightful post! What does this technology that tracks the entire process look like? A browser plug-in?(very few people will download)? A twitter data based app? I have been doing campaigns based on TW data with 66-70% conversions.
Do you think this is viable?
Thanks,
Abir
@Abir2
It's a noble plan Chris but do we have the tools in place, and can we shift behavior? Usually this type of large reorganization requires a disruptive force that starts small, like one site that attributes multiple providers of content with equitable affiliate shares. Then this site has to explode in growth to be mimicked by competition.
Can we create a site like that?
Well known problem. I had this discussion with Steve B. maybe 1.5 years ago. In the context of Google. Like if you wan to take on Google you reduce/eliminate links, track the search through your system and share search money with everybody.
Sometimes it's not about about pay walls. It's about directing traffic to a specific site ….
Hope you play chess, but this is a game with hidden pieces and players.
Reading this post reminded me of how in Corporations the Sales people are usually compensated for the closed deal, even though multiple players in the organization contributed to the close.
Similarly – if there was no incentive for Publishers to “close the deal” at the end of the funnel and drive a transaction perhaps this could result in fewer innovative/aggressive web sales tactics , less e-commerce, lower ad spending, and less ad dollars for innovative web businesses.
Just playing devils advocate here…
Abir/Mark,
Check out Convertro, a company that had a nice write-up on AdExchanger yesterday: http://bit.ly/aDNX9d
While they aren't necessarily a silver-bullet for the entire problem (the issues are far more systemic), I believe their software platform – or something comparable – is a step in the right direction.
There is huge amount of great research by Microsoft Advertising Institute on this: http://advertising.microsoft.com/learning-cente...
They have described the last click ad dollar allocation, and how those late in the marketing tunnel reap 95% of the rewards, even although it happened thanks to those doing the early brand advertising. The per click and per action mantras drive this even further. Clicks and search rule, but those happen only after tens of earlier brand or product ad interactions. Microsoft has shown that also inside one sector, for example travel, special report on that there as well.
Great thoughts as always…Fred Wilson had a related post not too long ago (seems like the Hivemind is circling around a huge opp. here!):
http://www.avc.com/a_vc/2010/01/affiliate-marke...
Solid, insightful thoughts here. This does not seem like a problem that's easily solved. Like the music industry, content creators and publishers are probably going to have to seek motivation outside of the end of the funnel.
Great post. It's a huge issue and there are a lot of missing pieces to connect the dots.
The problems run much deeper than simply tracking (which is relatively easy, if tedious). Even if you know that a user buying a $500 camera was influenced by a research site yesterday and a search engine today, what's the right way to allocate your future marketing dollars?
Getting the “right answer” is a problem that requires tons of data that virtually none of the biggest advertisers & agencies have the budgets/patience for.
This is a brilliant executed scheme from Madison Avenue. They never liked too much to calculate the linkage between their work and actual sales.
When the web ads emerged, publishers said: “LOOK!Now you can ACTUALLY MEASURE impact!”.
Madison Avenue quietly smiled.
Years go by. Web publishers are stuck with it.
Madison Avenue safely continues to skim the huge hard-to-measure-if-any “memorability” and “brand awareness” budgets.
Chris, you are stating the symptoms not the cause of the sickness and till you can speak about the cause of the sickness honestly your solutions lack “street cred”. It is high time you and other people in the middle of the industry reflect honestly on the cultural alarm bells rung by Jaron Lanier.
Great post on an incredibly challenging problem to address, given the integration requirements across not just digital but also traditional media to deliver a complete picture.
For what it's worth, Forrester ranked the “interactive attribution” leaders and put ClearSaleing at the top, followed by Visual IQ and Atlas – http://bit.ly/aOAjrO.
Kevin in case you missed them Chris has posted a number of times on this topic (some of the comment branches were incredibly detailed).
Let me dig them up quickly, oh I see he's got a category list on the side, here's online ad posts, and this is one I kinda of went 3hours of reading crazy with, Chris' most popular posts.
Thanks…I suspect this is realm that is very in-line with Hunch and how they plan to make gobs-o-cash down the road…so I'm sure he's spent many more hours than we'll ever know thinking about this sort of stuff. But I will def. have to go do some back-reading soon…interesting stuff!
I think the imbalance plagues Chris but he doesn't have “the solution”. He's hoping stirring us up can bring some light on the subject.
Agree that we need something to hold onto or work with. A framework or open source ad tracking system to move forward.
As I said you people need to read Jaron Lanier honestly. The “hive set” that Chris is hanging with, specifically his venture partner, is selfishly confused about this.
I've enjoy your comments here, and will certainly check out what Jaron describes. Can you suggest a good place to begin?
I have been following Jaron religiously:
http://benatlas.com/tag/jaron-lanier/
but the must see long lecture (besides the book) is here:
http://zocalopublicsquare.org/full_video_2010.p...
Awesome, looks like Jaron has an interesting past. Groovy that he coined VR and plays the pipes.
Appreciate the heads up!
Chris, in one paragraph. Till you restrict the “embed culture” and “share alike aggregation disease” with a micro-payment solution that generates value for the “creative class” nothing will work. It is that simple.
Advertising supported Internet culture in any shape or from is the problem not the solution.
With due respect to Fred Wilson his business is to benefit from scalability that is the root problem of this misallocation. Fred's idea of an online publication is aggregation, not creative reimbursable authorship, enough said.
You people amaze me. Advertising is the problem, not the type of advertising. People who love internet need to find a way for the “creative class” to get paid, not to reshuffle the ad deck. I just can'tt believe this. You people are ten times more confused than the MSM.
Your post is illustrating a real problem -conversion attribution. A few co's are trying to address this issus – tagman.com is one I know of. When I shop online, my last cliick in is usually from a coupon sites, giving credit for the sale to the wrong click as the coupon sites NEVER motivates my purchase, they just collect the credit for it. This is a problem that needs to be solved.
Really great post. I encounter this fundamental disconnect everyday. It's a real problem and I think the big opportunity lies in finding a suitable alternative attribution model to last click.
Can anyone point me in the direction of information that details what the big ad serving platforms (DART, Atlas, Mediaplex) are doing in the attribution space? I've seen some mention of Atlas, but no links.
if everyone knew about the level of “View Conversion Spam” (my term) that is going on within the ad network world, they wouldnt use most of the ad networks. Once an ad network sees you have a visited the advertisers site, they spam you with below the fold ads, IM ads, etc…just to get credit for the last view before a sale.
I think they both speak to the idea of proper attribution though no? I mean, even in Fred's aggregated world, he's making the point that only the player at the end of the line is actually earning anything (if at all) for the end-purchase…
Of course the problem of getting paid for authorship goes way beyond just online (people do a lot of talking and reading before buying something like a car…most of the time, they aren't paying anyone for most of the 'research' that went into their decision)…but my orig. point was just that it seems like a lot of people are really starting to think about this sort of problem (from all different angles) and so it's interesting to see the different angles and watch how everyone tries to work it out
I don't know if Fred's views changed on this during in the past year but I had a long online argument with him about this and he was all for the broken “old model”, i.e. scale a hive, etc. Let me say it again the ad supporter content model is a cultural disaster and it benefits the very few on top of the hive not the content creators. The only solution is micro payments not a different ad mix. I touched upon this here:
http://benatlas.com/2010/02/the-death-of-the-bi...
Don't you think that one of the possible solutions is to 'merge' top of funnel sites with end of funnels sites? I believe the market is moving to that already (including hunch through the topic widgets and Bing). This can be also achieved through partnerships which is what we are trying to do.
Personally, I think that the web will re-arrange itself to have vertical (sector/context focused channels). So, if I read something interesting about Buenos Aires I'll be able to find out more and book a trip there from the same site. Isn't this the reason why Amazon owns Imdb for example? (although they don't seem to monetize it quite as much as they should).
Aren't more and more blogs embedding buy/book affiliate links to generate income?
This will force advertising dollars to move accordingly and to change the way advertising works anyway.
I hate to be a jerk, but I don't think you're doing yourself any favors with how you communicate your points. For people who know what you're talking about, the combative tone is just going to make them resist what you're saying. For people who don't (like me), the cryptic references and “go research XYZ” comments are not enlightening. So you may feel like you're winning the argument on points, but you're not actually persuading people as well as you could be.
Great post, Chris. Convertro (http://www.convertro.com) is doing some interesting things in the multi attribution world. They're former operators of an online retail so understand the space from a practioner's point of view.
I don't plan to “persuade” anyone, I don't believe it is possible. I also don't believe the causal online encounter is the way to talk about the big issues. Chris's backdrop in philosophy makes him more aware than most of the “Web 2.0 morons” but in order to get know a person or his ideas you need hours not minutes it takes to write a comment.
Sorry for the links back to my site (I hate that) but post to post communication is one leg up from the social media.
So, you're just venting? The link to your site is fine, in my opinion, but including it implies that you'd like people to read it.
On big problem of current advertising methods is privacy. Research into solutions offers different architectures for advertising(some part of the personalization infrastructure is client-side).
So combining this with tools to measure branding activities , offers something both to consumers and advertisiers. and might be liked by consumers , or even become part of browsers, since the privacy problem is big enough.
What if we start tracking this and we find out that the attribution isn't there? Better yet what if we start tracking it and we find out the the only real demand-gen that matters for advertisers is not web based but TV?
I agree with you wholeheartedly that there is incredible interest and intent being generated by publishers but I don't believe it's due to the advertising that's on their site (banners, sponsor or otherwise). I believe it's because of their content (your CNET example is a perfect illustration).
That said, I think there are two issues here. 1) attributing top-of-funnel advertising to bottom funnel performance & 2) attributing content or context to ad performance.
The latter issue is one that publishers will have to grapple with themselves (good luck finding and advertiser or agency that's going to happily give away her dollar). I think there is tremendous opportunity here though. I'd say Rubicon has a head-start here.
The first issue is one a small number of really smart advertisers are already tackling e.g. buying banners to drive up brand (cheap) keyword inventory. However it's really a cross-media attribution issue more than a siloed web issue.
The earlier poster is right, Microsoft was leading this research a few years ago however in recently speaking with Google's display and mobile teams I would say they've lapped them at the moment.
What's great is that we're already the most measured and attributable medium yet we're far from satisfied. It will be fascinating to see what and where our real value rests and how that impacts other channels in the coming years. A bounty of opportunity awaits.
Chris, great post as always. Fred did touch on this a few weeks back and the comments of the post were solid – check there.
There is a macro evolution happening which is going from a “view thru” society to a “measured engagement” society. Measured engagement can include “clicks, sales, leads, downloads” or whatever measurable proxy for performance.
Because the commercial Internet is less than 20 years old, we're still in the early innings of this game due to the legacy measurement systems that were built. Because the entire advertising ecosystem was built around legacy systems (at the time, didn't feel like legacy), it's going to take some time to change this.
People have been mentioning convertro in the comments but also check out companies like joviandata and visualiq.
The macro question: you can have cutting edge measurement that moves away from last click attribution, but when will madison ave understand the advertising ecosystem when it moves to near-real-time (or even real-time)? Is Comscore relevant anymore?
Implicit in Chris' argument is that dollars get reallocated towards the content creator, further upstream where intent is harvested.
As far as your reference to “you people” I should note that I'm not a fan of advertising, in general. In fact, I loathe it.
I wish there were more outlets like Kickstarter and 20×200 that are disrupting the way creatives can earn a living. Absent those platforms though, the unfortunate reality is that advertising is the easiest way to subsidize content in a world where consumers don't like to pay for it.
I believe in time, we will start to see a paradigm shift from where we are today (consumers getting hit over the head with a message that they didn't ask to see) to one where ads can actually serve some utility and be part of the user experience – with proper compensation being distributed appropriately. Perhaps that view is idealistic, though I am hopeful.
Good point. Another formulation of this problem is what I wrote about here: http://blog.rlucas.net/tech_and_market_reflecti...
The “paradox of quality site visitors” is that a domain-typo-squatter's site which induces people immediately to click away monetizes (back in 2006) at 10x the per monthly-unique-visitor rate as does a content-rich community site.
Why? Because CPC as a model was rewarding the “next click” (if not the “last click”) and ignoring the amazing demand generation that was going on in the hobbyist community site.
Looks like we are more on the same page. Advertising will not solve the problem of authors unable to be reimbursed for their work.On the internet dominated by Google and other scale aggregators this is not possible. The root reason for the imbalance is that Google and other aggregators encourage quantity over quality. If you don't address this root cause, the Internet will continue in a state of crisis and more and more people will lose their honest livelihood to the server admins.
i do want you to read it, except i don't like when people link from my blog to other sites in the comments, but i often break my own rules
Interesting post. My experience has been that some of the most sophisticated consumer technology marketers with ecommerce sites are using spotlight or viewthrough tags to track results over 30 days or longer depending on their sales cycle. Then they then assign a weight to each site that contributed “intent” to the sale. Unfortunately, not enough clients invest in the digital agency manpower needed to support this model. I've heard several smart digital agency folks talk about coaching their clients away from last click attribution, but it's still used as a shortcut.
CJ and cookie dropping is a tough way to make a living. Short of major changes in the world as we know it, I'm short those whose models are dependent on that.
I agree with Josh. I'd love to see more ways for the “creative class” to get directly paid, and in fact have invested in a number of ventures like 20×200 that promote this. But the reality is the current internet economy is dominated by advertising, and will likely be for a long time, so as long as that's the case promoting a more “equitable” splitting of the pie seems like a worthy goal.
I agree with Caterina's rebuttal of Jaron. Not sure I have much to add beyond what she said.
I don't think that's Fred's business at all.
I hope everything I write on my blog is well known to some people.
Huh, really like the “paradox of quality site visitors” idea. Interesting.
I doubt Caterina read the book. In fact I am certain she replied to the review not to the book. She is also the one who made money by scaling the hive while millions of authors who contributed free content to flickr got nothing. Surely she will defend the model, it feeds her and deprives millions of authors of reimbursements for their work.
She didn't do it intentionally but she is also blinded by her circumstance. I understand you have to defend her.
“not sure I have much to add beyond what she said”
I was hoping you, with your background in philosophy, aspire to stay clear of shallow opinions. To dismiss Jaron who is the most significant and honest internet thinker today is just intellectually weak. If you are not prepared to debate his assertions, I have a hunch your are not prepared to engage the Internet culture with clarity.
Thanks Chris, this is an area I'm hugely passionate about.
The one aspect of this that you have not covered, which is one of the powerful factors prohibiting innovation in this space, is the power of the voucher/coupon code sites.
I have spent a huge amount of time talking to affiliate networks about endorsing solutions like the ones provided by Convertro and Tagman. The reasons this is not being done are:
The cost is charged to the merchant/advertiser, and there is little incentive for them to invest in this disruptive technology. By adopting multi-attribution, you completely topple not only the power, but the business model basics behind how voucher/coupon and cashback sites work. They rely on their ability to know precisely how much the customer will save/make on a purchase, because they can guarantee they are the last click. The second you bring in multi-attribution, they can no longer accurately tell their clients what they will save/make, and their business is undermined.
Unfortunately, these sites command an immense amount of power in the affiliate marketing industry. Love them or hate them (and most merchants hate them but can't escape them), these sites drive enormous amounts of sales. If they refuse to work with cashback/voucher/coupon sites, their short-term sales take a significant dive, and even more infuriatingly, their competitors will simply take their place on these sites and earn the sales they would otherwise have gotten. I have spoken with many of the top global voucher/coupon/cashback sites, and they are very adamant about their strategy when merchants/advertisers stop working with them.
So, merchants have this dilemma: do I invest in a technology that will jeopardise my relationship with the sites that drive 95% of my affiliate sales, just to ensure that perhaps in the longer-term, more content sites will write about my product, maybe.
This is what we are fighting against to win this battle, which I dearly want to win. But to win means convincing merchants that the short term hit to their revenues will be more than compensated in the long term by more revenues caused by a widening of a better-funded top-end of the funnel. For this, we need metrics – there is some incredible work being done in the UK by very clever agencies. I'm working with them to pull together a case that justifies this leap of faith on the part of the merchants. Hopefully once we have the metrics, and some great case-studies, we can convince more merchants to make the investment in technology and resource, and start sharing the rewards across all those who participate in creating an intent to buy.
So here is how I bought my first laptop:
* Asked a bunch of friends about what laptop to go for.
* Surfed through a couple of laptop review websites.
* Went to CircuitCity and BestBuy and checked through a bunch of laptops.
* Found 2 friends who wanted to buy a laptop too (starting of first year of college – this was easy.) So went and negotiated a better price from CircuitCity to buy 3 laptops together.
Probably 10 people helped me make the decision. But only CircuitCity got the money directly from me.
Online buying isn't that different than offline buying.
My money goes to CircuitCity. Part of CircuitCity's money goes to Toshiba (the brand of laptop I'd bought.) And then its upto Toshiba to spend their money on advertising and PR to make sure people know about their products.
The funnel is working. Its just not a simple funnel because not all products have equal opportunity of being bought.
The end vendor pays monies to interest harvesters. The money from interest harvesters trickles down to interest generators*
*unless they're reviewers. There has always been a gap between vendors paying money to reviewers. Because thats bribing. But companies like JD Power has cracked that code. Which is really the only way of packaging things up and make sure the reviewers get paid their worth.
The funnel – imho – is not really that broken. But not all levels of the funnel adhere to the same metrics and tracking devices.
Any misallocation that is happening is happening because of company planning error – and not because the funnel is not efficient.
Facebook will solve this problem in the future.
[...] Chris Dixon looks at the "massive misallocation of online advertising dollars" due to inadequate attribution models feeding digital advertising's supply chain. Dixon notes the classic issue where "intent generators" are getting less credit (such as display), and therefore a smaller allocation of dollars, than "intent harvesters" such as search. Moreover, Dixon notes the impact on research publishers. Read more. [...]
[...] » Chris Dixon posted an interesting blog last week on why he believes online advertising spend is being misallocated. He argues the point that those sites at the top of the sales funnel are not being adequately rewarded for creating the buying intent in the first place. This lost revenue is having an adverse affect on the businesses of struggling publishers, and is ultimately jeopardising the existence of pure-play content sites. The solution: better attribution. In Dixon’s view, tracking users through the entire purchasing process will help reward those intent creators at the top of the funnel. It’s a timely post, given the current debate around publisher revenue, and has some excellent observations from key industry players in the comments. (Chris Dixon Blog) [...]
A similar related credit assignment problem to the ones you raise is the whole e-retail CPA network model. If an affiliate of an e-retail site is compensated 5% of a $20 sale (i.e. $1) when the affiliate is actually bringing in a new customer to that e-retail site and likely to spend >> $20 over the lifetime of the customer, then the affiliate is being compensated unfairly. More accurately, the eretailer by having a “only the last click counts” policy is not going to attract the affiliate at all since the affiliate can't buy traffic to promote that e-retailer. There isn't that much more involved technically to have affiliates compensated more for the lifetime value of the customer, its just that the eretailers have a templatic affiliate model that are irrationally being clung to. Result: everyone loses.
Content sites who reel people into being first time clients, if this model can be revised from “% of the last sale from the last click” to “% of the customer lifetime”, should be able to earn major affiliate revenue.
Hi Chris,
I am new to your blog. This is great stuff, and an interesting debate.
The only comment to add is the following – As in all things in life, the funnel is part science, part art. While it appears most, it not all people here are steeped in science of “funnel analytics,” what appears to be missing is the art of communicating value propositions up the food chain at client marketers.
Those of us in Publishing/Networks, Agencies, or Digital Marketing at “Widgets R Us Co.”, all speak the same language, and understand the opportunities and immediate challenges in digital marketing. But does the CMO to the same level of detail? Or his/her CEO? Let alone their B.O.D.s’ and shareholders? The point being this – there absolutely needs to be new disruptive technology which helps marketers distribute advertising funds appropriately throughout the pipeline (aka Funnel) and provide them the ability the manage it. And quite honestly, it should be funded through a JV of marketers, agencies and publishers.
At the end of the day, branding, research/thought leadership, couponing/last click all have their place in the marketing continuum. I think we all agree on that. It’s how much of what, and when do we need to make adjustments, and to what degree, is at issue. Demystifying funnel analytics into straight forward, sales and marketing strategies, coupled with good analytics >>> will lead to better engagement at top management at clients >>> and in turn will lead to more dollars flowing into the digital economy >>> which will help fuel innovation, supported by the 3 constituency groups.
Final thought for those who “hate” advertising, I have 1 question for you — You mean you didn’t let out a little chuckle, let alone a smile of amusement when Betty White got tattooed in that Snickers commercial?
‘Nuff said!
[...] A massive misallocation of online advertising dollars cdixon.org … [...]
[...] A massive misallocation of online advertising dollars cdixon.org – chris dixon's blog Dixon argues that because it's the easiest to track, advertisers are badly misallocating their dollars towards ads that transition purchasing intent into a purchase, instead of focusing further up the process on the creation of that intent. (tags: advertising marketing seo metrics chris.dixon) [...]
this is spot on, especially when you look at google search results – the keyword heavy sites like price comparison engines rank much better than the content sites. On last week's “this week in tech” podcast, Googler Matt Cutts said that Google is looking at ranking quality content sites higher. i think this is a good idea.
but your friends didn't get paid. these are the ones who should get paid because they generated the demand for toshiba laptops.
Both my friends did get a discount on their Toshiba laptops too.
Chris, long time follower, first time commenter! First, great post – back in '08 there was a study done by Microsoft (right after their purchase of aQuantive) where they used their Atlas ad serving technology to track total exposures all the way down the funnel – here is what they found in their research:
Most advertisers made their first contact with converters months prior to the conversion. Figure 1 shows the median number of media touch points at different times in users’ conversion histories. Unsurprisingly, the amount of advertising exposure is quite high in the last few days before a conversion. Consumers amass a median of 5.5 ad events in the final 48 hours before conversion alone.
But this frequency amounts to less than a third of the total media events delivered over three months. Half of the total engagements with converters occurred between seven and sixty days prior to conversion, and after a full 90-day look back, converters experienced a median of 18.5 events.
Here is the link to the .pdf of the study: http://bit.ly/aXuY6N
Google (and other CTR sellers) have understood the argument you made and have built empires around harnessing the last click, and showing advertisers “look I made the sale for you!” – it is something that I like to call the “Google Tax,” akin to giving the man/woman who rings you up at Target all the credit for selling the item, and discounting everything else in the supply chain.
But here is the rub, the internet is/has become decentralized. I suspect that our patterns of finding content and information on the web are changing and that soon peer-to-peer recommendations will become a more powerful form of spreading content – and that includes Marketing content. I think that this will threaten the status quo on the web – especially search. I am beginning to believe that a person can get a personalized content delivery experience without being dependent on a search. How does that effect marketing? In everyway…
The post is great in that it is provocative, but a sustainable and equitable solution is certainly not going to come out of better tracking of clickstreams or browsing behavior.
“For example, an average camera buyer takes 30 days and clicks on approximately 3 sponsored links from the beginning of researching cameras to actually purchasing one.”
OK, but what else did that average buyer do that was not trackable? Talk to friends? Get referred to a friend of a friend? See a magazine ad? See people walking around using a certain camera? Visit a few stores?
And what about if this buyer uses multiple devices to do the research? How would you track that?
Let's say I read a positive review on a photography blog, pick up a cookie from that blog, and then decide to hold off on buying for some reason, then my friend shows up with that camera weeks later, I try it, I'm hooked and I buy the camera online without clicking on a paid link on a site that is able to track that cookie … well, how much should the photography blog get?
You're doing a lot of measuring and tracking but if you're honest you must realize that you're really no better off than the 'traditional' advertiser that accepts the old saw: I know I'm wasting half of my budget, but I just don't know which half.
The fact is that many buying decisions are made in a rather messy human sort of way. Just look at your own habits and those of the people around you. I have read positive reviews for products that I have purchased, but not for the reasons that I read about in the review. I'm not trying to be pedantic, I just happen to think that's how the world works.
If there is any light at the end of this particular tunnel it could be the holy grail of social network centric advertising with the caveat that we don't yet have any clear idea of what that will look like.
[...] From cdixon.org [...]
[...] Cost per Click (CPC) – rewards exactly the opposite kinds of websites. As Randall Lucas said in response to one of my earlier posts: The paradox, it seems is this: in a pay-per-click driven [...]
[...] at the end of the purchasing process, observes internet entrepreneur Chris Dixon in an insightful blog post entitled “A Massive Misallocation of Online Advertising [...]
[...] model on the web – Cost per Click (CPC) – rewards un-sticky websites. As Randall Lucas said in response to one of my earlier posts: The paradox, it seems is this: in a pay-per-click driven [...]
[...] on the web – Cost per Click (CPC) – rewards un-sticky websites. As Randall Lucas said in response to one of my earlier posts: The paradox, it seems is this: in a pay-per-click driven [...]
[...] on the web – Cost per Click (CPC) – rewards un-sticky websites. As Randall Lucas said in response to one of my earlier posts: The paradox, it seems is this: in a pay-per-click driven [...]
[...] model on the web – Cost per Click (CPC) – rewards un-sticky websites. As Randall Lucas said in response to one of my earlier posts: The paradox, it seems is this: in a pay-per-click driven [...]
[...] using tracking URLS, etc. are going to become more and more of standard. The downside of tis, as Chris Dixon points out, is that buying performance tends to rewards content light sites where users go often, and click [...]