Ad Effectiveness Measurement

It doesn't.For the ad platforms, this lets them optimize their ads for better performance when they know which user profiles converted.For advertisers, it's used for directional guidance on the platform, e.g. ad campaign A converts at 3x the rate of ad campaign B.The famous quote in the industry is "Half the money I spend on advertising is wasted; the trouble is I don't know which half." This method gives you a better idea of which money is wasted, at least comp

Seems like there are more efficient ways to determine the effectiveness of an ad.

Who says it's about effectiveness of the ad? It might just be effectiveness of getting money from the advertisers. More data means you can do more hand-waving to say that this ad will be the one that really really reaches people this time.

There are media productivity companies, like MarketShare that cost a boat load but accurately track every possible interaction with an ad and brand to see what actually works.If you use a company like this and a DMP (data management platform) you can track ads and measure on a scale this article doesn't seem to even know exists...It might cost you a few million to close the feedback loop accurately but there are companies that can correlate an unclicked banner impression to an in stor

Yes! Advertisers do track roi and won't keep burning dosh.

Most advertisers care about what ROI they'd get for their particular business.And the easiest way to determine that is with a test campaign of just a few hundred dollars. Most platforms even give you "free credits" to do exactly that (in many businesses, a few hundred dollars can be a big barrier, because the employee doesn't want to put it on their personal credit card, yet getting the paperwork in place to go through the accounts department is a lot of work).That me

Ad with id X was shown, Ad with id X was clicked, Ad with id X led to a purchase. Is it that important to know more than that?

I almost feel like there are two factions. I'm pretty similar to you. I have clicked on ads a handful of times, but it's very rare. However, I have worked in jobs where I had visibility into the metrics, and I have seen internet ads be EXTREMELY effective. Not in terms of clicks (which could easily be accidental or fraudulent), but in terms of people clicking and then purchasing. People aren't going to "accidentally" click and then give us money. And I've seen many

Advertising companies spend a lot of time and money convincing industry companies that ads work and that their ROI can be measured. In reality you cannot attribute a particular instance of someone seeing an ad to a specific purchase except in the case of a click-through online purchase, which I think is a pretty small portion of sales.

You can run "ghost ads": pretend that you did bid and won an ad auction, log this information, and measure what would have happened in terms of conversions for this counterfactual set of users. Both Google and FB have experimental products to do that, as well as a couple of third party companies. It's very difficult to set up properly, and the ROI numbers don't look good at all which is why big platforms are not super reluctant to offer it broadly, even though it would be a b