Introduction This is a simple post about some commonly known features of online ad auctions. Generalized second-price auction (GSP) is a mechanism in which the advertiser pays a marginally higher bid than the advertiser losing to him. It encourages the bidder to place a truthful bid, i.e. one where the price level is such that […]
Google and the Prospect of Programmatic
Introduction This is a short post taking a stance on programmatic ad platforms. It’s based on one single premise: Digital convergence will lead into a situation where all ad spend, not only digital, will be managed through self-service, open ad platforms that operate based on auction principles There are several reasons as to why this […]
The Vishnu Effect of Startups (creators/destroyers of jobs)
Background In the Hindi scripture there is a famous passage in which the god Vishnu describes himself as death; to Westerners this is mostly known through Oppenheimer’s citation: “Now, I am become Death, the destroyer of worlds.” But, there is another god in Hinduism, Brahma, that is the creator of the universe. How does this relate […]
A major change in AdWords – How to react?
Introduction Google has made a major change in AdWords. Ads are now shown only in the main column, no longer in the right column. Previously, there were generally speaking eight ads per SERP. For some queries, Google didn’t show ads at all, and additionally they’ve been constantly testing the limit, e.g. running up to 16 product listing […]
How to prevent disruption from happening to you? AKA avoiding the “Vanjoki fallacy”
Introduction A major issue of corporations is how they can avoid being disrupted. This is a commonly established issue, e.g. Christensen discusses it in his book “Innovator’s dilemma”. But I’m going to present here a simple solution for it. Here it is. Rule Number 1: Don’t look at absolute market shares, look at growth rates […]
European financial crisis – the next steps?
Introduction With this post, I’m anticipating the next phase of debate on European financial crisis, as the problem of asynchronous economies isn’t going away. The continent is currently riddled with the refugee crisis, but sooner or later the attention will return to this topic which hasn’t been properly dealt with. The problem In brief, there are […]
The correct way to calculate ROI for online marketing
Introduction This is a short post explaining the correct way to calculate ROI for online marketing. I got the idea earlier today while renewing my Google AdWords certificate and seeing this question in the exam: Now, here’s the trap – I’m arguing most advertisers would choose the option C, although the correct one is option A. […]
Carryover effects and their measurement in Google Analytics
Introduction Carryover effects in marketing are a tricky beast. On one hand, you don’t want to prematurely judge a campaign because the effect of advertising may be delayed. On the other hand, you don’t want bad campaigns to be defended with this same argument. Solutions What’s the solution then? They need to be quantified, or […]
Chasing the “true” CPA in digital marketing (for Pro’s only!)
This is a follow-up post on my earlier post about “fake” conversions — the post is in Finnish but, briefly, it’s about the problem of irreversibility of conversions in the ad platforms’ reporting. In reality, some conversions are cancelled (e.g., product returns), but the current platforms don’t track that. So, my point was to include […]
Online ad platforms’ leeching logic
We had a great discussion with Mr. Lauri Pitkänen about unfair advantage in business – e.g., a gift card company’s business model relying on people not redeeming gift cards, investment banker’s relying on monopoly to take 7% of each new IPO, doctor’s controlling how many new doctor’s are educated, taxi driver’s keeping the supply low […]