The effectiveness of digital ads is wildly oversold. A large-scale study of ads on eBay found that brand search ad effectiveness was overestimated by up to 4,100%. A similar analysis of Facebook ads threw up a number of 4,000%. For all the data we have, it seems like companies still don’t have an answer to a question first posed by the famous 19th century retailer John Wanamaker: Which half of my company’s advertising budget is wasted?
What Digital Advertising Gets Wrong
Too often, ads end up targeting people who would buy the product anyway.
February 19, 2021
Summary.
Digital ads look way more effective than they are because they’re sold on the number of people who buy after clicking on them. Most of these people are likely to buy anyway, without an ad’s prompt. You can reduce the amount you spend on ads and get more sales from the ones you make if they’re targeted at people who aren’t already your customers.
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New!
HBR Learning
Customer Focus Course
Accelerate your career with Harvard ManageMentor®. HBR Learning’s online leadership training helps you hone your skills with courses like Customer Focus. Earn badges to share on LinkedIn and your resume. Access more than 40 courses trusted by Fortune 500 companies.
Learn how to keep your customers—and their most important needs—front and center.