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For A Large, Well-Known Brand, Search Ads Are Probably Worthless


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What's the real value of online ads? Maybe not much

 

By Jordan Weissmann

 

 

 

A group of economists have issued a study with a startling conclusion - for a large well-known brand, search ads are probably worthless.

 

 

 

In the summer of 2003, Viacom executive Mel Karmazin managed to sum up old media's horror of the Internet with one of business lore's greatest vulgar one-liners. Karmazin, a swaggering former ad salesman and onetime CBS Corporation president, had made an expedition to check out Silicon Valley's hottest young upstart: Google.

 

Sitting in the future search giant's offices, he listened in dismay as its founders, Larry Page and Sergey Brin, and its CEO, Eric Schmidt, detailed the many ways their company could track and analyse the effectiveness of online advertising. This could not possibly be good for business, Karmazin thought.

 

It had always been nearly impossible for marketers to tell which of their ads worked and which didn't, and the less they knew, the more a network like CBS could charge for a 30-second spot. Art was far more profitable than science.

 

As Ken Auletta later recounted in his 2009 history of Google, Karmazin stared at his hosts and blurted out, "You're [expletive] with the magic!"

 

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