DTC Managers guide to online ads


  • Winston Churchill once said, “However beautiful the strategy, you should occasionally look at the results.
  • Display ads are usually reported to have an overall click rate of about five clicks in ten thousand ads served. If you want to know why the web is so appallingly littered with ads, it’s because to get five clicks you have to run 10,000 ads.
  •  60% of the clicks are reported to be mistakes.
  • You are more likely to complete Navy Seal training than click on a banner ad. According to research company Lumen, only 9% of banner ads are even noticed for a second.
  • Studies show that CTRs have little to no correlation to ad effectiveness, yet it is still the most widely utilized measurement (or Key Performance Indicator, in ad jargon) of online advertising performance.

Source: Bob Hoffman

According to research conducted by a professor at MIT, a fellow at the Melbourne Business School, and the Head of Operations and Technology at Group M, data that is informing your programmatic ad buys may not just be unproductive, it may be counterproductive. In one test, data bought from a data broker was able to correctly intuit the sex of an individual 43% of the time. A cat flipping a coin would be right 50% of the time yet DTC marketers have pouring money into online ads.

TRUTH 1: The biggest driver of traffic to your website is TV ads

Bob Hoffman says in his new book, “the idea that the same consumer who was gleefully clicking her remote to escape from TV ads was going to joyfully click her mouse to interact with online ads is going to go down as one of the great marketing fantasies of all time”.

He goes further by saying “we can’t be blamed for swallowing the baloney that was fed to us about online advertising. But we can be blamed for having stuck to it when it became apparent it was nonsense”.

The new Novartis drug for diabetes is getting a lot of traffic because the media has run with the brand’s key message of weight loss not because of online ads.

DTC managers waste a LOT of money on display ads and search without adequately measuring and optimizing their online budgets.

TRUTH 2: Large agencies are losing good, creative people and replacing them with inexperienced ones.

Large agency holding companies have allowed, and sometimes forced, experienced talented people to leave while replacing them with inexpensive unproven people. Replacements are people who have little experience and who are too data driven.

Here is an example of how clueless most agency people are from Mr Hoffman’s book..

Thinkbox, the TV trade organization in the UK, commissioned a study a few years ago comparing advertisers’ assumptions about consumer media behavior with the facts of consumer behavior. First, they asked marketers and agency executives how many minutes a day they thought people spent watching video on demand. The ad experts said 81 minutes. The actual number was 8 minutes. The experts were off by 900% They asked how many minutes per day people watched subscription video on demand like Netflix. The experts said 84 minutes. The actual number was 11. The experts were off by over 600%

Despite all the hoo-hah over the precision targeting of online advertising, behavioral targeting seems to be only marginally more effective than no targeting at all.

Bob Hoffman, Advertising For Skeptics

TRUTH 3: The fraud on the Web is a crisis situation

By most measures only about 50% of traffic on the web is human. The scale of the fraud we found is jaw-dropping. The industry continues to waste marketing budgets on what is essentially organized crime.” The ad industry has allowed itself to crawl into bed with the weasels at Facebook, Google and the rest of the devious adtech squids. It makes us look like fools. Every week there are alarming reports of fraud, corruption, privacy abuse, and security failures in online media and we shrug our shoulders and duck for cover.

So do you need to be on the Web?

Yes. You need to understand the patient journey online. First, they will come to your website, but they will also check your claims on social media and other websites. This is a huge problem because of the misinformation online. You, therefore, need to ensure your website is sticky for online health seekers. This means two things; first, usability studies, and second, content based on what THEY are looking for, not on what you want to say.

Most pharma websites have ignored the other tactic of providing links to credible health information online, even if they provide information on a competitor’s brand.

I just finished an analysis of some research that a client asked me to look at. The key finding was that their doctor had recommended the medication. The second was information they found online. However, when they dug deeper into the relevance of the pharma product website on their choice, the answer was almost nill.

By the way even though the client spend eight figure on online ads almost nobody indicated that they remembered the ads and CTR was a measly .002%.

Online advertising is largely a scam, and I’m in digital marketing. Invest in good TV creative, and you’ll get traffic but understand that all websites are interlocked together to drive brand objectives.