...and Statistics

If you haven't been following, Bob "The Ad Contrarian" Hoffman posted Top 10 Double-Secret Unknown Facts About Advertising, a digital strategist shot back with his own interpretation of the "secret facts", to which Hoffman replied, "Normally, I don't bother answering annoying gnats, but this guy accused me of cheating. I spent a lot of time on this and was painstaking in getting my sources."

You must be new here, Mr. Klein.

Hoffman and I had a similarly lovely exchange in the past: his numbers, my numbers, his graceful retort.  It was so much fun last time around that I couldn't resist poking a stick into a few of his "double-secret unknown facts".  Because, to quote Hoffman, "What I try to expose in this blog are the outrageous claims and misleading data." It's not that the numbers are not accurately cited, it's that some important nuances are painstakingly omitted.

"Fact #1) 99.9% of people who are served an online display ad do not click on it."

Yes, well:

Source: EyeBlaster via eMarketer.  Here's the DoubleClick's Benchmark report Hoffman probably refers to.

"Fact #2) TV viewership is now at its highest point ever."  This announcement from Nielsen is Hoffman's source.  Let's look at it closely, especially at the pdf linked at the bottom of the announcement.  From the pdf, we learn:

Average viewership per day, persons 2+:
1991-1992: 4:06
2008-2009: 4:49
1991-1992: 1:12
2008-2009: 1:12

Not exactly an explosive growth.

And a related tidbit from Nielsen's "TV Audience 2008" report (pdf and a MediaPost article):

Number of available channels per average household:
1990:  33.2
2008:  130.1

Charting the two together, we get something along these lines:

(Chart source: Future of Media Report 2007 (pdf) and 2008 (pdf).)

"Fact #3) 96% of all retail activity is done in a store. 4% is done on line." Hoffman's source: US Census Bureau.

Let's look at the US Census then.  Here's the growth chart for e-commerce dollar volume for the past decade (click on it to zoom in). So far, pretty accurate, although one can say that last year the e-commerce volume was "highest ever", kind of like the way Nielsen talks about TV viewership above.

Now let's look at the footnote:  Electronic auction sales, mail-order sales and automotive sales are included in retail, not e-commerce. E-commerce also excludes "non-retail operations such as travel agencies, financial services, manufacturers, and wholesalers".

Oh, and then there's this: "Manufacturers led all industry sectors, with e-commerce accounting for 39 percent of total shipments ($2,154B) - up substantially for the seventh straight year."  (US Census E-Stats 2008, pdf).

"Fact #10) TV viewers are no more likely to leave the room during a commercial break than they are before or after the break." Hoffman's source: Council for Research Excellence.

I've already looked at this study back in May. If you do the math, it turns out that probably only about 20% of the people are sitting in front of commercials not doing anything else, maybe paying attention.

1 comment:

  1. Nice follow up. I think the point everybody is missing with comparing these numbers – the point I try to make – is that it’s just a whole different game you’re playing when you move from TV to web. Comparing reach and impressions and even clicks is silly; all these things are just stand ins for what you’d really like to measure: the lifetime value of a new customer acquisition. How much did this customer buy vs that customer? What behaviors / communication points led to that increased purchasing behavior?

    That’s what marketing IS, but when you make a TV commercial, you just say “We got X impressions and Y people bought something.” There’s this magic ad man hand waving that happens to turn the X into the Y, but in Ogilvy’s famous words… well, you know them.

    The web lets you build a real formula and make it rigorous. For someone like Bob, who claims to support “performance marketing” (because obviously no one else does), this is a pretty big point to miss.

    Thanks for sharing your exchange with him!


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