I will answer your question with another: what metric are you using to measure ROI?
Edit: When you say you know lots of "marketers and advertisers" that are making money from ads, are you referring to resellers and providers of ad inventory and/or analytics, or are you referring to people who actually sell goods and services other than marketing and advertising inventory?
Return on investment for advertising is very simple:
net present average customer lifetime value acquired per unit of advertising cost
If it's over unity, you're making money with advertising, if it's not, you're wasting money on advertising or need to increase your CLTV or decrease your discount rate.
You put a cookie on their machine when they hit your website, tracking where they came from, and exactly how much you paid for that visit (because FB will give you which cohort they came from).
Then you track that to a sale, and you can determine how much you made from them.
If it is a single sale, then that's basically it (obviously you track return visitors and amortize the cost of them against that too).
If it is a SAAS, then customer value calculation is a little more complicated (you record how long people stay with you etc).
OK, so how is the success of that funnel measured vis-a-vis other promotional channels? And are you able to demonstrate definitively that a visitor from FB concluded a sale? If so, how?
I don’t understand why you seem to think that companies are throwing tens of billions of dollars a year at Facebook (and Google, and Twitter) with not only no returns but also no ability to measure that lack of returns. It’s just such a ridiculous viewpoint to hold.
I think so because the entire history of advertising is based on hiding the ball in terms of ROI. How many sales does a Super Bowl ad generate? How many does a billboard generate?
For some extremely simplistic e-commerce conversions, such as for referrals to SaaS, it is easy to measure. For entire swathes of consumer products, the game is brand recognition and other soft metrics that drive huge ad spends. You can pretend it’s a science, but the incentives are all upside down for a true end-to-end ROI determination.
A large number of companies are advertising /only/ online, and therefore have a pretty pure measurement of ROI via click tracking from the ad to purchase. It's one of the promises of internet advertising: there's sufficient <strike>surveillance </strike> logging to be able to see what's happening with much greater clarity than TV or billboards.
The other half of the promise is that you can target exactly the 'right' people. And this seems sketchier to me, as the article kinda gets at: as targeting complexity increases, it's harder to tell whether problems are arising due to market fit or issues in the targeting algorithms. In the old world, you bought ads on content, and now you buy ads on eyeballs: my guess is that there's an unexplored happy medium between the two.
It's really, really easy. And that is why Facebook and Google are printing money - vendors know it works and can measure exactly how well, so they throw money at them.
FWIW, I am not trolling. FB domains are deliberately blocked via my hosts file, and my business has nothing to do with consumer ads. I am just a skeptic of intertuption advertising effectiveness in general, and curious to see how rigorous the defense of FB advertising will be. I am still not convinced that click tracking is effective, but I’m willing to be wrong.
Yes. Facebook gives you a unique visitor id when they see the ad that persists and is included in the sale form. It's completely linear, and is tracked from beginning to end. Every click is tracked, and users are tracked even if they leave the website and return later.
There's hard, direct evidence involved in every step of the way.
Edit: When you say you know lots of "marketers and advertisers" that are making money from ads, are you referring to resellers and providers of ad inventory and/or analytics, or are you referring to people who actually sell goods and services other than marketing and advertising inventory?