For those not familiar with the above title, it’s in the theme of one of my favorite characters from the original Batman® series of the sixties known as “The Riddler” played by Frank Gorshin. His questions (or riddles) always started with the phrase, “Riddle me this, Batman!” And it is in this theme one question keeps gnawing at the back of my head as I look over Alphabet’s™(better known as Google™) pleasantly reported earnings beat.
Here’s what I just can’t seem to reconcile:
Paid “Clicks” grew by some +58%. Sounds pretty stellar, does it not? But here’s where something just isn’t squaring up too me, ready?
If paid “clicks” are showing their advertising power to attract with such an increase – then why would there be a need to be discounting them at double-digit (-22%) percentages?
Remember, the accepted metric, or “standard” across all advertising platforms for years, which still continues today – is that it takes on average 1000 viewers to make 1 physical positive action, in this case it would be a click.
This is known as the “Direct Mailing Standard” and also “The Times” metric as was adopted by the NYT™ years back. It’s been a standard and continues as one, because it’s been proven out even when it comes to the web of today. I know this from personal experience, because I’ve seen it work and play out in real-time via my own measurements. And also, I sold advertising earlier in my career, which is why I also know of it.
Which brings me back to my conundrum, which is this:
If you were the vendor or holder of something which showed a +58% increase in demand or its effectiveness – would you then discount it -22%?
Better question might be, “Why would you discount it at all?”
Then again, these “clicks” are set by auction if I’m not mistaken, so that would mean people found them less valuable even though they proved to be 58% more effective? (effective as in getting someone to click on it I have to presume)
To ask it another way: If we propose all things being equal in assumptions for effectiveness via the previous quarter – and the bidding results return with a -22% haircut – what does that signal?
Remember, If we give the assumptive benefit-of-doubt as an advertiser, we would have no idea there would/may be an increase at all. i.e., Meaning our best hoped assumption would be that they would be at least as effective as last time in returning prior results. A very fair assumption, indeed. Especially in advertising. Yet, that assumption, if it worked precisely the same as before, was worth -22% less to those advertisers going in? Are you seeing my point?
Maybe it’s me, but there just seems to be something perplexing in these numbers. However, if we apply Occam’s Razor maybe there’s an answer. Such as:
Is the value of “clicks” going down by double-digit percentages (e.g., -22%) because advertisers are not willing to pay for ads that attract nothing more than a “bots” eye?
Maybe, it’s precisely those “bots” that are now needing to work over time (e.g., +58%) being deployed in ever greater numbers to make up for the loss in revenue?
Again, all conjecture, but I just can’t seem to ratify that conundrum to my satisfaction.
I mean, it’s not like there’s any known problems in advertising when it comes to being plagued by “bots,” right?
Or maybe there is. To wit:
(Source – Non-working screenshot of top result using Bing™ via entering search term “Buy google clicks”)
© 2018 Mark St.Cyr