No, digital advertisers can't guarantee magic versus old-fashioned print or TV

It may seem that way, but much of the digital advertising world's top sellers appear to throw around economic jargon in a form of hand-waving as much as Mark Carrier throws around Bayesian probability claims in an effort to prove Jesus never existed.

The reality is something QUITE different, as this long piece shows.

It's snark-heavy, with a headline of "The new dot-com bubble is here: It's called online advertising."

A key early point of Jesse Frederick and Maurits Martijn is that here, in the most dismal of the social sciences (advertising as part of economics), as in other sciences, correlation is not causation.

From there, we dive into some actual research, which the hand-wavers didn't.

Finding one? Paid company brand name keyword links? Bupkis.

We then move beyond that to:

The benchmarks that advertising companies use – intended to measure the number of clicks, sales and downloads that occur after an ad is viewed – are fundamentally misleading. None of these benchmarks distinguish between the selection effect (clicks, purchases and downloads that are happening anyway) and the advertising effect (clicks, purchases and downloads that would not have happened without ads).

Interesting.

Now, that's all true of old-fashioned ads as well.

From the newspaper biz, I know that. I've not sold a lot of ads, but I've sold a few, and working primarily in the community papers biz, I've heard people ask about ads even if I've not been the seller of record.

Can't tell you how many times someone would ask to make a coupon a part of their ad to test ad effectiveness. That ignores whether people remember to clip the ad or not, remember to have the clipped ad with them, etc., and finally, whether the ad, coupon included, is that much of an enticement for a product or service they might not otherwise need.

Per neuroscience, advertising is just a general "primer." And, whether in a newspaper or magazine's print version, a TV station, or on Facebook, it's only going to attract people already interested in the product or service, or in an individual company. In that sense (and god, I hate to give him credit for anything) it's like a Cass Sunstein nudge.

From there, the authors talk further about "selection effects" (i.e., selection bias) vs "advertising effects." And they apply this to the Hucksterman Empire.

In seven of the 15 Facebook experiments, advertising effects without selection effects were so small as to be statistically indistinguishable from zero.

Well, that's pretty serious.

Because the target audience for a lot of ad sales is small, you have to run large sample sizes on testing before you can figure out if you've got something real. The audience for some new Max Factor lipstick is nothing like presidential polling. Rather, going the other way, the authors compare the rarity of many product needs to that of cystic fibrosis.

From here, the authors note that this also shows advertising can't manipulate people as much as digital advertisers claim.

The information above is as true on affiliate marketing as on search.

The biggie behind all of that is this:

It might sound crazy, but companies are not equipped to assess whether their ad spending actually makes money. It is in the best interest of a firm like eBay to know whether its campaigns are profitable, but not so for eBay’s marketing department.

And, per the authors, many of the marketing staff at many of these companies — we're talking buyers of ads, not the sales staff at Google and Facebook — don't WANT to know. 

Per an anecdote about Mel Karmazin, president of Viacom, talking to Google's Larry Page, Eric Schmidt and Sergey Brin in 2003, and complaining they were removing the "magic" from advertising, these marketers want to keep the magic, so that they continue to look like Wizards of Oz.

This all means that programmatic advertising is smoke and mirrors, too. So my potential nightmare of the post Gannett merger Craphouse creating an in-house programmatic ad network? Could still happen. In a sense, would be an even bigger fuck-up than I dreamed before.