Slader, Chegg, and Hostage Advertising
https://hbswk.hbs.edu/item/don-t-express-sympathy-with-a-cheerio-and-other-hard-learned-lessons-of-social-media-marketing
Any company that is trying to promote their product will put considerable effort into advertising on social media. This makes sense— after all, the most effective way to target the younger generations is to focus on the socials right? This is not necessarily true, as many companies have learned throughout the years. The article above explores the significance of “likes” on advertisements that appear on prominent social media boards such as Facebook, Twitter, and Instagram. What marketing analysts have come to find is quite counter-intuitive: interaction with advertisements on social media mostly amounts to nothing. In fact it can be quite annoying to the majority of social media users when an irrelevant ad appears in the middle of a conversation.
In the scope of this class, though, we don’t care about if users become loyal customers or not when they see an advertisement. We care about how many clicks this advertisement has generated, and if we are maximizing our profits when selling out slots for ads. With this idea in mind, distributing advertisement slots on social media is guaranteed advertisement revenue for the seller, given how attached to socials our generation has grown to be.
Let’s imagine that you are the CEO of a company selling products with a target audience of college students. You have already spent a fortune on advertising on various social platforms, but your returns are looking mediocre. What now? You want lots of money, so why not advertise on a website that forces college students to sit and interact with your ad. Enter CheggStudy and Slader.
Millions of college students around the nation visit these websites desperate for answers to their homework questions 5 minutes before the due date. At this point they will do anything to get answers. Including sitting through (and interacting) advertisements if it means successfully cheating and turning in that hard work. In this sense, the website holds the visitor “hostage” and forces them to click and watch ads in order to maximize the revenue. If we imagine a valuation procedure as we learned in class, an advertiser X whose target audience is exclusively teenagers would have an extremely high value for a slot on this website. However, if advertiser X had a target audience of people aged 50+ years, then these clicks would mean nothing and therefore the valuation would be very low.