online ads

Google wants to show ads can drive store visits…or not

Google announced yesterday the initial roll out of a new “store visits” metric for AdWords. Essentially, it is an attempt to trace conversion from an ad click to an actual store visit. According to Google:

With the holiday season upon us, it’s clear that the majority of sales for many industries still happen in person – in fact, roughly 95% of retail sales take place in physical stores.1 And online activities are influencing offline transactions more than ever, bringing together the digital and physical worlds. Thirty-two percent of consumers say that location-based search ads have led them to visit a store or make a purchase, so it’s more important than ever for businesses to understand the impact that search ads have in driving visits to your physical locations, whether that’s a store, hotel, auto dealership or restaurant.

The implementation, however, leaves something to be desired. Google will establish location by conventional means, e.g. geo-fencing and Wi-Fi, and which can have an error rate of over 500 meters!

This means the store visit metric will only work for certain kinds of retailers. It won’t work for stores in dense areas or in shopping malls. It’ll only work for a Costco-like mega store that’s in the middle of nowhere by itself.

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What you already know: online display ads don’t work

Yesterday, I wrote how ads are a valid revenue model for online businesses, and not necessarily anti-consumer. Today, I write how display ads don’t even really work.

Intuitively, you know that to be true. How often have you actually looked, processed and clicked on an ad, much less act on it? Take those probabilities and divide them in half, because according to Google, only 44% of all display impressions were even seen by actual human beings.

The definition of seen is quite generous: at least half the ad’s pixels have to be viewable and for at least one second to be counted. So Google is counting even the ads that appear on the side that you completely ignore as you read the web page’s main body of content.

Under this definition of seen, ads that appear just “above the fold” (i.e. are viewable as soon as you arrive) and ads that are vertically long are seen more often.

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You love the place where everybody knows your name

When you are drinking at a bar or eating in a restaurant, what’s great service? What makes you loyal to a particular place? Is it not when they know who you are, what you like, and can therefore provide a level of service and intimacy that other places can’t match?

Why then is online, targeted advertising so different? Why do people get up-in-arms about companies getting to know you better, so they can show you ads you might actually like more?

That is probably what Mark Zuckerberg is thinking when he reacted to a comment Tim Cook once made:

When an online service is free, you’re not the customer. You’re the product.

And then Mark Zuckerberg in a recent Time Magazine article:

“A frustration I have,” Zuckerberg says, before a PR handler can change the subject, “is that a lot of people increasingly seem to equate an advertising business model with somehow being out of alignment with your customers. I think it’s the most ridiculous concept. What, you think because you’re paying Apple that you’re somehow in alignment with them? If you were in alignment with them, then they’d make their products a lot cheaper!”

I have to side with Zuckerberg here.

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