Sunday, September 20, 2009

Are You Wasting Your Advertising?

I hope you have heard the famous words of John Wanamaker "I know half of my advertising is wasted, I just don't know which half."

Today the phrase should be something like “Half my Advertising is wasted because I do not advertise responsibly” or “Half of my advertising is wasted; I can stop that but I fail to use the data”.

Yes that is correct. We have an abundance of data today to help us save the wastage. There is no shortage of tools that will collect all sorts of data. Yet many marketers fail to act responsibly and use this data to stop advertising waste and also save customers from unwanted ads.

Here are some examples that will show you what I mean

  • Newsletter – Nordstrom - In my blog post on email and relevance, I showed an example of an email from Nordstrom that had irrelevant offers. As result of this, not only did Nordstrom waste time, effort and money but also lost a subscriber. Advertising was wasted.
  • Newsletter – – Same as Nordstrom. Not only did Drugstore lose a subscriber, but a high profile marketing guru “Seth Godin” wrote about this on his blog. Adverting was wasted and resulted in negative publicity.
  • Paid Search – I searched for ‘iPhone Charger” on Google and saw an ad from “Walmart” titled “iPhone”.

    I could take one of the following two actions
    1. Ignore this ad as it does not have relevant copy, which results in lower CTR on the ad and hence higher CPC that Walmart will end up paying in future. (Google punishes you if you don’t have high performing ads).
    2. I click on it and Walmart pays for the click.
    I chose to click on the ad and landed on a page that showed me results for “ipod” instead of “iPhone chargers”. Wow!!! What a mismatch. Net result: My time was wasted with irrelevant results, Walmart wasted its money by paying for click that did not generate any value. Advertising was wasted.

    Here is another example: Search Pay Per Click Tip : A Simple Way to Increase Profit.
  • Offline Advertising – Netflix recently sent me two snail mail pieces on the same day.
    1. Offer to join Netflix and get first month free – Great, I like it, I think I should join Netflix. Wait…I am already a member and receive my movies from them all the time. So should I cancel my subscription and join again to avail this offer? Netflix is known for movie recommendations it makes to its customer based on their past history. Can’t they tie their database to see who is already a member so that they don’t send junk mail to that subscriber? Advertising was wasted.
    2. Offer to recommend Netflix to my friends – They have done it several times now. I have never referred any of my friends as most of them are already subscriber plus who has time to save a print coupon and give it to a friend. The web is full of coupons and they can get it from there. Netflix should have looked at my referral history, I have never referred anybody. Stop sending junk mail and avoid wastage.
  • Display Advertising – We all know the web is full of irrelevant ads. An example is an ad from Air Linus of for flights from New York to Ireland. I think this works for those who are in New York, but not for me. I live in Seattle. Just because I am browsing does not mean I live in New York or interested in going to Ireland. Advertising waste could have been avoided by just checking my Geo location. Money Wasted. Advertising was wasted.

Are you advertising responsibly? Are you using data to make sure you are not wasting your adverting?

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  1. great idea and kudos for genuinely trying to make people think about how they are spending their money on marketing and advertising

  2. Great article - direct to the point.

    There are so many companies wasting time and money on irrelevant ADs (considering what the user were looking for, of course).

    On this post, people can find some of the most commons mistakes on online advertising.

    Thanks for writing this.

  3. Even in print advertising you can improve where you advertise by tracking response using an 800#, unique URL, promo code and other tracking mechanisms. Many advertisers fail to utilize these simple tools and as a result place ads repeatedly in publications that may not yield the most results. Print advertising drives traffic successfully to the web - providing you give consumers the right URL.

  4. As a media buyer, I highly recommend close monitoring of all ads on and offline. If you aren't tracking the ads closely, it is easy to let time slide by without the desired results and before you know if hundreds to thousands of dollars of your ad budget are gone without much to show for it at all!


I would like to hear your comments and questions.