Archives For advertising


It used to be that the primary medium of advertising were billboards, televisions and newspapers.  As more and more audience shifted to the Internet as the medium of receiving content that used to be served by print and TV, advertising gained momentum on the Internet.  First popularized using the “clicks” model, it continues to evolve and is the dominant source of revenue for most of the Internet stakeholders.  The social media frenzy now cannot be overstated – there are numerous sources of buying “likes” and “followers” that we have heard of.  Alex Rampell wrote about the danger of the intermediate metric on TechCrunch and highlighted that while marketing folks are busy setting milestones based on the number of likes and followers they can accumulate for their brands on social media, this may not in fact be translating into actual sales.  

This is obviously true.  What is a “like” worth?  Especially in light of fake or paid likes?  It is not a directly measurable metric and it can be quite fuzzy as to whether it translates to any direct sales at all.  There are conflicting theories on this, even though brands continue to pour money into social media, accumulating followers, likes, repins and what not.  

But I contend that the situation with social media metrics is no different than with any other metric the advertising world has ever known.  Without going to the beginning of time here, let’s start with newspapers and televisions.  What decided the net worth of an ad on such media?  The number of potential viewers more or less decided why Superbowl ads were worth a lot more than ads on any other day.  Or why a popular newspaper’s front page was worth more than something else.  Was there a direct conversion between sales and a viewed imprint? No!  

Of course, direct conversions are slightly more measurable when a promotion from an ad makes its way into a sale (say, using a coupon in a store or a code in an online purchase).  Then again, this situation is no different from any online intermediate metric we have today.  

Let’s take another widely used marketing channel – email.  What is an email address worth to marketers?  It is as debatable as anything else – but it is common to see offers for simply signing up to receive email.  Each brand has an indirect conversion mechanism that tells them approximately how much an email is worth.  Here is one example – but it is only a small representative of what can be done.  

About the only aspect that makes social media metrics a bit more challenging than any other metric the advertising world has dealt with before is the thriving underground economy that allows social media interactions to be traded.  But, that is to be absorbed as a cost for now, while algorithms get the better of it.  Trolls on the Internet aren’t new.  From fake reviews on Yelp (did you know 20% of Yelp reviews are potentially paid reviews?) to cheap social media interactions (see what a search on “buy social media likes” yields), this is an obvious problem. But, just like email fueled technologies in spam detection (and Yelp’s algorithms filter out what are possibly fake reviews), technology will catch up to extracting the signal from social media interactions.  

The bottomline is that the advertising world is no doubt being morphed by the introduction of new metrics and the shift to online media and sales. But, the philosophy behind computing the net worth of an advertisement is not quite changing – it has always been about “potential impressions” or “potential views” and it still is!