What is the business about ads?
What is the great business of advertising? Before we can answer the question, we need to take an in-depth look at what exactly is an ad.
When we look at an ad, we see one big block of words, or an image, or a moving picture. Just like in quantum physics, where we study the smallest unit of life. We can also break an ad down to the subatomic, the smallest unit of the structure in an ad, and its activity. When you do, you will realize that all these things makeup and interact with every ad.
Endless signals
An ad at any given time can be served by Locations: Country, State, City, Radius, Zip Code.
It can be served at different timings: Month, Week, Day, Hour, Minute.
It can be viewed from different devices: Desktop, Mobile, Tablet, Cross-devices.
It can be viewed from different browsers: Firefox, IE, Chrome, Safari.
It is made up of different types of Information: Headlines, Description, Extensions (Price, Location, Snippets, Callouts, Promotion, Site links, Opening Hours), Display URLs.
The user can be doing a wide variety of things when viewing your ad: Sleeping, eating, waking up, in a meeting, commuting, in friend’s place, actively researching, watching TV, in a bar, in a sports event, at work, at home.
The user might be in different stages: returning customer, potential customer, researching user. The user might be ready to buy, considering to buy, passionate about your industry, might have watched a few Youtube videos related to what you sell.
The user might be male or female, inside any specific age-group, have different hobbies, have different friends, have different lives.
The user can feel a variety of emotions at the time: urgent (want to take action), desire (want to take action), cold (not ready to take action), warm (might consider taking action), tired, energetic, curious, angry, confused, sad, bored, worried.
It is changing in real-time
At every moment your ad shows, all of this above are happening at once. The dynamics are constantly changing, moving, and fluid. It resembles an ocean. It is not a fixed substance, it is not still, it is forever moving in real-time.
A single line may hit well with a customer and turn another one away.
A customer’s mood may turn from tired to energetic. Or from cold to urgent. Another one might be looking at your ad in the comfort of his own bed, another one might be secretly browsing their phones at work. One might be browsing at lunchtime, another just browsing before bed.
This dynamic that is happening in real-time, and is constantly changing, making it impossible to know what the exact state of the user might be in, the moment of point of them interacting with your ad.
Use of machine learning and smart bidding
There is no way for advertisers to account for every slight variety, it will be beyond our human capabilities. To beat this, we must learn to rely on machine learning and automation. Google machine learning can account for the real-time difference, in milliseconds. It is no longer smart to have too much manual input into our advertising account. To account for every single individual that comes across your business, we must serve the ad that they best want to see.
As humans, it is not possible for us to do that. Therefore we rely on Google’s AI and machine learning to do it for us, profitably. What we need is to feed Google as much data as possible, so that they can best optimize for our success.
This might sound ludicrous 4-5 years ago, but Google machines have become so smart now that testing ads manually or setting manual bids are a sure way to fail. We must look past the concept of “manual” into the world of artificial intelligence, machine learning, and smart bidding.
That is where the 21st century of advertising thrives on.
The great business of advertising
Now that we know the thousands of variables that can happen in real-time before serving an ad. And we know that we cannot account for every individual manually, we must rely on machines that are way smarter than the man can do to effectively touch upon our customers on an individual scale.
Now let’s get back to the question. What is the business of advertising?
The great business of advertising is: What are your customers thinking?
We should always be asking this question, for everything can be reduced to this question. Without it, no sale was ever made. With it, everything can be sold. This is the final cause, the principle of selling.
This principle is changeless, it is exact. It is scientific. When we know what our customers are thinking all day long, we can create a line of the least resistance to selling our products.
The moment we know what they are thinking, we can proactively create ads to serve to their needs, because we now know what they truly want, we can serve better and more effective ads than our peers.
Use machine learning to know what they are thinking
The power of Google’s machine learning is unparalleled, its ability to calculate and serve in real time the best ads for our customers, and adjusts bid in real-time (milliseconds) upon every individual search query.
Admen in the current age now are more called “data scientists” than manual workers.
The principles of sales heavily apply into advertising. By that, I mean that you can take a sales book and apply its teachings into advertising. They both have the same objectives, to maximize revenue and bring in more sales for the company running ads.
But the current age of admen must work with data, rely on machines for effectiveness. To get the best result for our business, we need to feed the system more data, and valuable data about our business, our customers. Our input results in their machine learning capabilities, the more they learn, the more they can optimize for our success.
Summary
Because of the magnified nature of advertising, it rapidly brings to light any great product or service. It brings success to the business in multiples, it can also bring bad recognition in multiples. Good advertising on a bad product only accelerates its downfall, as quickly as it accelerates on a winning product.
The great business of advertising is in the minds of your customers, we should get attuned to their daily thinking. When we do, we are working with a changeless principle that is scientific and exact. It can never fail. It is certain to reap the rewards so long as we recognize the question before us.
