[HN Gopher] Uber discovered they'd been defrauded out of 2/3 of ... ___________________________________________________________________ Uber discovered they'd been defrauded out of 2/3 of their ad spend Author : rbanffy Score : 735 points Date : 2021-01-03 18:37 UTC (4 hours ago) (HTM) web link (twitter.com) (TXT) w3m dump (twitter.com) | gnicholas wrote: | I recently read Subprime Attention Crisis, [1] which talks about | the ways in which advertising is opaque and may be leading to a | bubble. In particular, the author draws parallels to the mortgage | crisis of 2008. He doesn't say a catastrophic event is | necessarily imminent or even inevitable (it could slowly deflate, | either by design or by chance). But it has made me think that at | some point there will be a tipping point and there will be a mass | exodus from online advertising. | | This will have big impacts on businesses like FB and Google, | whose businesses have been designed around ad revenue. It would | be interesting to envision what a social network would look like | if they weren't incentivized to gather data about you for the | purpose of advertising. | | 1: https://www.amazon.com/dp/0374538654?tag=macmillan-20 | | 2 [video about same]: https://www.youtube.com/watch?v=X9dlJ4sHfSk | skinkestek wrote: | Tell this to the poor scammy-dating-site-slash-mail-order-bride- | site operator who has been sold 10+ years of impressions on me: | | - an extremely happily married man | | - with multiple small children | | - in a rather conservative church | | Sometime during the last two years they finally stopped | advertising to me. I've always blamed their marketers - or Google | for being so utterly incompetent as to not pick up any of the | available, extremely strong signals sent out - including me | reporting the ads as irrelevant on a number of occasions, but | maybe I should blame it on incompetent middlemen? | nkrisc wrote: | If you take a look at people who have been caught in extra- | marital affairs I think you'll find those three qualities are | not immediate disqualifiers. | | Maybe the "happily" part, but how does Google know that? | nautilus12 wrote: | I've said for a long time that Martech is due for a correction | due to lack of understanding in attribution. Could this finally | be the bubble bursting? | alexeichemenda wrote: | What's important to highlight here is that marketing teams at | companies such as Uber are incentivized to pus vendors to drive | fraud. Specific example: Uber works with vendors A, B, C. | Marketing team is incentivized to reach a cost per sign-up of $X | (Let's say $50 for the sake of this example). Vendor A, running | fraud, delivers sign-ups @ 45$ each. Vendor B, clean, delivers | them at $55 each. Vendor C @ $65 each. The new baseline from an | exec standpoint is $45 each, and every vendor that doesn't | deliver at that level is cut. Repeat with multiple vendors. | | The solution to this problem is incrementality measurement at the | channel level. Every time you _scale_ with a recently onboarded | vendor, measure baseline of ALL conversions happening on your | app. If this baseline doesn 't move, cut the vendor. I say | _scale_ and not _launch_ because upon launh, there won 't be a | visible impact on the global conversions. To be able to spot this | spike from baseline, pick a small market than "worldwide". For | ex, pick "California", let the new vendor scale in California, | and measure spike in California. | alexeichemenda wrote: | I'll also mention: this is a problem that goes up every ladder. | Marketing individual contributor wants to show good performance | to their manager, so delivering rides for cheap is good. | Marketing manager is in the same boat with the CMO. CMO -> | Board -> VC (VC will be happy to see great efficiency on the | customer acquisition side). VC -> LPs (LPs will be excited | about customer acquisition efficiency). A limited number of | people are actually deeply concerned with this, and that's why | it's taking so long for the top KPIs to change from "cost per | action" to "incremental impact and incremental ROI". | hermitcrab wrote: | Some time back I kept hearing how effective remarketing (aka | retargetting / cyberstalking) was. So I did my own (small scale) | A/B test and it didn't work for my small business. Fair enough. | But the weird thing was that no-one else seemed to have done the | same simple A/B test. Or, if they had, I couldn't find it. | | https://successfulsoftware.net/2014/12/23/remarketing-does-i... | | It is also widely quoted that you "have to see an ad 7 times | before you buy", or words to that effect. I tried to find out if | this was true. Turns out there is no real evidence for it: | | https://successfulsoftware.net/2010/06/03/do-customers-need-... | | It is hard to avoid the conclusion that a lot of marketing is | based on bullshit. | hermitcrab wrote: | I also looked into Twitter demographics back in 2014 and they | were clearly bullshit as well: | | https://successfulsoftware.net/2014/04/03/twitter-demographi... | ddevault wrote: | The adtech industry is a _huge_ sham. It 's an open secret that | ads don't work and that most of the data is fraudulent. There are | thousands of companies with deliberately complicated | relationships to pull a giant shell game with advertiser's money. | All of the data that supports the lie is built out of massive | internet surveillance dragnets. Ultimately, even casting all of | this in the best possible light, it's designed to psychologically | manipulate people. No one wants to see an ad. Adtech is | despicable. | cbsmith wrote: | So, there's some bits of this story that hint at the problem | here. The big headline is that as they removed Breitbart, their | spend was reduced. If you're really doing "performance marketing" | in the sense that people think of it, that doesn't make a lot of | sense. Of course, it makes total sense in the industry. | | If you are properly doing performance marketing, that means | you're going after the best opportunities to get customers, and | you're paying as little as you can for those opportunities. If | you cut out a whole set of opportunities from consideration, that | should not change your spend. If those were really some of your | best opportunities, that means now you'll have to show ads where | you have worst opportunities. Either you'll have a lower chance | of getting a conversion or you'll have to spend more for each | ad... either way, your opportunity cost should go up. Basically | you've constrained your supply without constraining your demand, | so the price might go up, but demand still gets fulfilled. | | Except, this isn't what really happens in the industry. Instead, | you're given an ad budget and a campaign window, and you're told | to burn through the budget within the campaign window. Most ad | networks will try to find the best inventory to give you out of | that campaign window... except often the "performance" they're | chasing isn't "performance". It's "impressions" or "unique users" | or "clicks" or "conversions" (where the goal post on what a | conversion means is moved to "goes to the landing page" instead | of "buys the product"). So what they end up doing is finding the | cheapest (i.e. crummiest and least likely to _actually_ perform) | of whatever your "performance" goal is. So you'll get | impressions that are least likely to click, or clicks that are | least likely to convert, or conversions that are least likely to | actually buy your product. | | This happens, because there is actually a fixed constraint on the | _quality_ side of the supply. | | You're trying to spend $X in a tight time window, and the dirty | industry secret is the need to spend that money so quickly is the | real challenge. Ad networks don't get paid the part of the budget | they don't drain. The ad spend is a big deal. More important than | performance. Ad execs' comp are tied to that spend. | | But when you cut a big chunk of the supply, the expectation is | you're not going to hit the same spend, so... you cut your budget | too. Well now that changes everything. Now you don't have to | spend so much money over so much time. Imagine if you cut your | budget in half, but because you are performance focused, you want | to lose the worst performing half. You should expect _better_ | performance. Way better. Because now some other idiot | "performance" marketer is going to buy up all those crummy bits | of inventory, and you're going to pay the big money to outbid | them for the bits of inventory they were going to get that would | have performed well. | wdr1 wrote: | The use of the "fraud" here is curious, as I don't think it's | what's most advertisers would use. "Waste" would be a better | word. | | Fraud generally indicates a bad actor or something the advertiser | was unaware of. Claiming to run my ads on the New York Times and | instead running them small blogs would fraud. | | On the other hand, if I chose to run my ads for wedding dresses | on ESPN.com, they would be very effective (they'd have a lot of | waste), but that's not really fraud. _I_ made a bad decision. | | I read the Uber comments as 2/3rds of their spend was waste, not | fraud. That still seems a surprisingly high number, although I | wonder how much of it was upper- or mid-funnel, which is | notoriously harder to measure. | SteveGerencser wrote: | I'm not surprised by this a all. I do PPC for a living and I find | that a lot of ad spend is totally wasted on paying for clicks | that you would have gotten anyway, especially on Google and on | Mobile devices. | | A lot of big brands bid on, and pay for, their brand terms | because someone at some point told then that they should. So when | a person uses search to find Uber, they get an ad first, then a | regular listing second. And almost everyone clicks the first | link. Take away the ad and the free click is first. | sixothree wrote: | With google specifically, I've always wondered if the placement | of the listing itself is related to the ad spend. | aetherson wrote: | In fairness, I've worked at several places that engaged in this | practice, and they're perfectly clear that they're paying for | clicks that they'd likely get for free. | | The theory is that if they don't do this, their competitors buy | this ad space and steal some of their organic traffic, and/or | that they're just bidding up the cost of that space to make | their competitors less efficient. | | Now, that theory may not be cost-efficient in practice. But | it's not like the marketers didn't understand that someone | searching for the name of our app were going to see it in the | list anyway. | arbuge wrote: | That theory can easily be tested by turning off the ads in | question and seeing what actually happens. Can always turn | them on again later if needed. | chillacy wrote: | Ebay did this 7 years ago, not sure how it turned out | though https://hbr.org/2013/03/did-ebay-just-prove-that- | paid | sosborn wrote: | Would you be willing to make that decision knowing full | well that it could reduce revenue that is 100% traceable to | that decision? I mean, obviously there are ways to make | this politically acceptable in your organization, but you | better be completely confident that it won't bite you in | the ass. | arbuge wrote: | You can just turn the ads off in one small geography | and/or for a short time. Seems to me the potential | benefits far outweigh the risks here. If your | organization can't see that, then you have bigger | problems. | austinpena wrote: | Google Ads also has a built in report for seeing uplift of | ads + organic and organic only | arbuge wrote: | I'd take that report with a big grain of salt and run my | own tests independently. Google is more than slightly | biased here. | austinpena wrote: | You've got a point. Plus attribution modeling isn't for | the faint of heart. | | One popular method is a geolocation test. Turn off the | test campaign (usually remarketing) in certain geos and | see what happens. | arbuge wrote: | Exactly what I suggested earlier... see my other comment | reply. | spockz wrote: | The solution to this would be to have a very authoritative | site for a query show _above_ any ads. | tpetry wrote: | If the company ranking results and selling these ad spaces | are the same every decision will not be in case of | advertisers/users. Google has long lost it's spirit and is | only optimizing for money. | undreren wrote: | DHH of Basecamp had a long twitter thread about this. Their | competitors bought "basecamp" as a keyword for google ads, | effectively forcing basecamp to pay to stay #1 on searches | for basecamp. | | Google has/had no policies restricting this, unless of | course, you guessed it, the keyword you are squatting is | "google". | joaodlf wrote: | This being allowed shows the sad state Google is in - you | search for a brand, get ads for a competitor? Search engine, | my ass. You now effectively need to pay Google to keep your | product relevant through ads, even when the user is | specifically looking for you. | tqi wrote: | If I search "Kleenex", am I specifically looking for the | Kimberly Clark product or should Procter & Gamble be | allowed to bid on ads for that search? | joaodlf wrote: | Certain types of product have become directly linked to a | product name, yes. Google is smart enough to know this, | though. If I google for my non VC funded product name, | which is unique, why should the first result be for a | direct competitor with deep pockets in advertising? | | This would be fine if Google embraced their dependance on | ads, but Google still labels itself as a "search engine". | friendlybus wrote: | If I search "Kleenex" on Google, I'm asking Google to | find me Kleenex, not some ads. If Google is going to | start listing things in highest-to-lowest bid, then it | stops being a search engine and starts becoming an | auction house of links. | speedgoose wrote: | Isn't it "take away the ad" and Google will put first a ad link | to a competitor instead? | misterbwong wrote: | Having worked on the publisher side for most of my web dev | career, I can say with confidence that most ad spend attribution | is a load of crock. Sure people along the line _claim_ to have | attribution figured out but, coincidentally, they all attribute | your spend to their "value add." | | The incentives of the current ad system and ad spend attribution | for everyone along the chain from publisher => advertiser are all | misaligned and almost no one is doing it properly. It's so bad | because everyone gets paid to turn a blind eye. | | For example, lack of good bot detection. Publishers benefit by | higher CPC/CPM. Ad networks, ad agencies, and creative agencies | all benefit because they take a vig off of total # of ads served | and/or total ad spend. Average individual paid ad buyers benefit | from the vagaries of the system because it allows them to justify | spend by correlation, not causation (e.g. I bought this KW and | traffic went up! Too bad conversions and revenue didn't.....) | | Like organic SEO, the gulf between the average and the good is | huge. If you find a good paid ad manager, hold on to them because | they can be worth their weight in gold. | jrpt wrote: | Most companies either use a neutral third party attribution | product or build their own system. They're not simply trusting | the attribution stated by the companies along the line. I agree | that those are all biased. I also believe many of the neutral | and home grown attribution systems don't work very well. | eksabajt wrote: | This related article is excellent - "The new dot com bubble is | here: it's called online advertising" by Jesse Frederik and | Maurits Martijn. https://thecorrespondent.com/100/the-new-dot- | com-bubble-is-h... | | > Marketers are often most successful at marketing their own | marketing. | slyrus wrote: | I'm reminded of the famous quote by George Best: "I spent a lot | of money on booze, birds, and fast cars. The rest I just | squandered." | blntechie wrote: | Ad tech is a bubble and full of sketchy players. The advertisers | always get fleeced, the only question is for how much. | [deleted] | UShouldBWorking wrote: | I love watching people realize that online ads do little to | nothing. It took me a week or two to realize this years ago with | my own sites. | kmeisthax wrote: | I think a lot of this was already obvious to slightly-savvy | mobile app users. Look at pretty much any free-with-ads app; a | majority of the ads are going to be ads for other free-with-ads | apps, many of which you already have installed. The thing is, | outside of the Internet most ad spend is for marketing ubiquity, | not direct response. You don't really buy, say, TV advertising | with the expectation of getting so many clicks or calls out of | it. And, up until a few years ago, TV was the lion's share of ad | spend. So who knows if we'll see an actual industry reckoning or | not. The whole point of advertising is to waste money, after all, | and plenty of brands were fine with getting nothing but exposure | out of it. | | More interesting to me is the fact that tech companies are | finding it surprisingly difficult to control where their ad-spend | goes. I suppose this is an inverse of the problems with supply | chains, where Apple can take three years to get a connector | vendor out of their supply chain even when they were using | literal child/slave labor. It's a market for lemons; bad "money" | (publishers, suppliers) drives out good. The question is: will | questionable ad publishing actually harm corporate reputation to | the point where big ad spenders go away, or will we just see | periodic Adpocalpse-style waves of spending being decreased and | then brought back? | qeternity wrote: | I suppose this is true in the same sense that the purpose of | life is to waste oxygen. | cortesoft wrote: | The point of traditional advertising IS pretty much to waste | money, similar to how the point of a peacock's tail feathers | are to waste resources... it is a signal to potential partners | (business or romantic) that they are so capable they can waste | resources. It is a signal of bonafides. | unethical_ban wrote: | I'm genuinely shocked at how many people think advertising | doesn't work. | | Just because it doesn't make a person consciously stand up | and say, "I want a Snickers" does not mean the ad didn't | work. | | Like, honestly, are there people here suggesting viral ads | don't work? Or don't understand the point of Coke or Mercedes | Benz ads are for? Coke establishes themselves as the defacto | soda. There is no other soda, or if they are, wish they were | coke. | | MB ads among other things reinforce to MB owners the wisdom | and luxury of their brand. To own an MB is to be part of a | club, one that is advertised across the media spectrum. If MB | didn't advertise at all, they would either become another | commodity brand, or have to be so luxury that only word of | mouth is necessary (Bently, etc). | | Now, maybe that's what cortesoft is saying "get you to waste | money" but if it got you to waste money on their product, it | worked. | cortesoft wrote: | Sorry, I think you misunderstood my point a bit... I think | I am agreeing with you. | | My point was that advertising's purpose (from a consumer | point of view) is for the ADVERTISER to waste money, to | signal that they have confidence that their product is good | enough to recover the cost of wasting money on advertising. | cbsmith wrote: | It's also an important signal to consumers. | cortesoft wrote: | Yeah, that was who I meant by 'business partners' | Ma8ee wrote: | That the products are overpriced? | Phenomenit wrote: | That you're paying for these ads. | cortesoft wrote: | No, that the product is good enough that it makes enough | money to afford expensive advertising. | | There is a really good essay about this that I re-read | quite often: https://zgp.org/targeted-advertising- | considered-harmful/ | neaanopri wrote: | I can't believe I had to scroll down this far for someone | to point this out. | jl2718 wrote: | 90% of email traffic is spam. 90% of ad clicks are fraudulent. | 90% of visitors? 90% of tweets? 90% of likes? Some day, 90% of | YouTube videos. As human-mimicking technology improves, all human | interactions that can be faked, will be. | tomaszs wrote: | I don't know now, but some time ago Google consultants told me | that I should create an ad that displays when someone searches | for my brand name. It was very odd because without it, my page | ranked obviously first for the brand name. It may be the case it | looks good in ads reports to see paid conversion. | | What definitely made me realize what ads are about was when I | have installed user interaction tracking on my website. I was | able to see what paid ads users was doing. | | 90% of the traffic was generating users that behaved like bots. | | But there is a big marketing and a lot of money for everyone. No | one really cares about results. You can find tons of articles how | to optimise campaigns that are aimed at SMB. | | But no one will mention most of such advice are for companies | that spend tens of thousands of dollars per month. Otherwise | there is too little data for ROAS or even CPC and CPM | optimization. Comparison results for smaller campaigns are just | not statistically signifant. | | I must agree with the article it is all about perfect crime. No | one , including clients, are not concerned about real results. It | is like let's throw money into the fireplace and enjoy it is | warmer. | jpollock wrote: | I expect Unilever has some data from their Facebook and Twitter | ad boycott. | | They're restarting their advertising. | | https://www.campaignasia.com/article/unilever-to-end-faceboo... | ryanSrich wrote: | I'm not sure if this is equivalent to fraud. But I've recently | discovered that 99.9% of the website visitors to my new startup's | website are just random @gmail addresses from India and China - | most of which are coming from Google ads. We don't spend much, | about $100/m mostly to keep our #1 ranking in Google (which I | think helps), but it does seem fraudulent. If I turn the ads off, | the traffic from those IPs drops off a cliff. | janmo wrote: | With Google ads you can select the countries where you want the | ads to run in. If you go worldwide and chose to maximize | clicks, Google Ads will mainly run them in India and other | emerging countries because it's much cheaper to get clicks from | there. | ishjoh wrote: | I also had a small Google ad spend ($350 over 3 weeks), that | I setup to run exclusively in the USA, and had the same | experience where IP addresses recorded by hotjar were all | from India, all new signups from the ad spend were '.gmail' | email addresses and although I had about 100 signups not a | single one entered a credit card. | ryanSrich wrote: | Yeah, same here. We have done some spam mitigation, but we | still get so many bogus sign ups and form submissions. In | this instance, who is committing the fraud? Is it Google to | ensure you spend your entire budget? I don't see anyone | else benefiting from these bots and click farms. We're so | small and new that it can't be a competitor. | nickphx wrote: | Some "bots" perform searches and click on ads to build a | "user profile" for the browser. | SheinhardtWigCo wrote: | ...so that they can bypass Google's captcha. | hermitcrab wrote: | IIRC sometimes bots will click on random ads to try to | obscure the nefarious other things they are doing. You | are just collateral. | [deleted] | Aldipower wrote: | Almost the same here. Had an Google Ads budget of $200 a | month. All I got from this were dubious sign ups, which all | together never looked around in the application and never | came back. As my ROI turned to be negative, I turned off | ads completely. My organic sign-ups even increased since | that. And those people are staying! | austinpena wrote: | Physical location only or location of interest included? | ryanSrich wrote: | Yeah so that's the weird part that I didn't mention. These | ads only run in the US. | cj wrote: | This might help you fix the problem: | | Google Ads default settings for location targeting is based | on "Presence or interest" in a location, not whether the | user is actually in the targeted country. That means even | if you have "United States" selected as your target, your | ads will still show mostly to people outside the US who | "show interest in" the US. | | To fix it: Campaign Settings > Location > Location Options, | and under "Target" select "Presence". Never use the default | "Presence or interest" option, as it will result in exactly | the scenario you're describing. | | This is my #1 pet peeve with Google Ads. Using the default | setting is an incredibly common (and expensive) mistake | people make setting up new campaigns. | hermitcrab wrote: | The default Adwords settings are garbage (unless you are | Google). | undreren wrote: | Maybe this is due to chinese and indian click farms running | through VPN's? | | Click farms click on _everything_ in order to dodge fraud | detection, as far as I know. | cj wrote: | I've been suspicious of this in my own campaigns as well. | Google Ads lets you drill down to specific cities where | your ads were clicked. Very often, Ashburn Virginia shows | up very high on the list. Ashburn is where AWS's us-east | region lives, and presumably also where many VPNs operate | out of. | | I simply ended up excluding Ashburn from our campaigns | for this reason. | thekonqueror wrote: | By default Google will show ads to people in or "intersted | in" the selected location. You can change this to only show | ads to people actually present in the specified location, | from campaign level location targeting. I spend low 5 | figures per month on ads and changing this parameter has | significantly reduced poor quality clicks. | wenbin wrote: | The podcast episode where Kevin Frisch (former Uber head of US/CA | performance marketing) talked about this issue: | https://listennotes.com/podcasts/marketing-today/historic-ad... | | All podcast interviews of Kevin Frisch: | https://lnns.co/5UZnQ_FopCb | 101008 wrote: | This has already 303 comments so probably no one will see mine, | but I was planning this year to start doing some online | advertisement to get more visitors to my website and convert them | into Patreons. But I think this will not a good idea after all. | Any other recommendations in how to be more visible to more | people on the Internet? | soared wrote: | There is a thread in r/adops in response to this HN thread for | some good context. | | https://www.reddit.com/r/adops/comments/kprrcd/uber_discover... | oli5679 wrote: | This is pretty interesting study at Ebay. | | https://www.nber.org/system/files/working_papers/w20171/w201... | | They tested the counterintuitive claims by performance marketers | that 'brand' keywords (containing Ebay) had the highest ROI. They | did an experiment and found that, contrary to attribution model, | these Ebay keywords resulted in ZERO incremental sales, although | they were clicked on by many people that purchased. | | This resulted in cut of Ebay marketing budged by $100 mn. | | There is now a big literature in economics looking at experiments | and natural experiments, generally finding much smaller sales | impact of advertising than claimed by industry participants, and | genearlly -ive ROI. | | https://www.nber.org/system/files/working_papers/w20171/w201... | | This Freakonomics episode is a nice overview. | | https://freakonomics.com/podcast/advertising-part-2/ | rightbyte wrote: | Obviously 'brand keywords' has the highest apparent ROI. It is | users already looking for your site that click those. It is | probably some internal bonus scam that fuel such nonsense - a | industry wide marketing department conspiracy. | addicted wrote: | Playing devils advocate, couldn't this just be reflective of the | fact that Ubers brand reach us strong enough that there is very | little advertising that gives them a marginal benefit? | | Uber owns taxi services as a brand as much as Google does search. | adrianmonk wrote: | I guess there are 3 reasons why reducing ad spend might not | show a negative effect: | | (1) Due to fraud, the money wasn't actually going to ads. | | (2) You didn't need the ads. You were over some saturation | threshold and the law of diminishing returns kicked in hard. | | (3) The ads were valuable to you but not in an easily measured | way. Maybe you could coast on brand awareness inertia for 6 | months or a year before it affects sales. | | This case seems to have decent evidence for at least part of it | being #1, but not necessarily all of it. | PragmaticPulp wrote: | A lot of comments are rushing to dismiss the entire concept of | advertising as ineffective, but they're missing the point of | these Tweets. | | One of Uber's advertising partners created numerous apps that did | things like auto-click on their ads and install apps in the | background, collecting the commission for themselves on customers | who didn't actually click the ad or intentionally install the | app. | | They discovered it when they turned off those ads and didn't see | a drop in signups, which is something that normally happens when | they turn of legitimate ads. | soupson wrote: | Right, it seems like the point isn't "Targeted ads don't work," | it's "There are ways to fake ad targeting that fooled a major | company." Uber could benefit from legitimate ad targeting | (assuming they haven't hit market saturation), we just don't | know. | ErikVandeWater wrote: | Why is no one discussing that the term "defrauded" is not | substantiated by the tweet? | soared wrote: | This is really just Uber failing to effectively manage their ad | spend. Somebody at Uber is not doing a core function of their job | if this can happen. A person at Uber is responsible for ad spend, | moving it between vendors, checking CPAs, etc. | jariel wrote: | So Uber has 15B revenue and they only spend 150M globally on | acquisition ad spend. | | It'd seem to me that this is relatively thin, and likely wouldn't | have any impact for some time. | | Uber is already well known - their spend in most cases boils down | to brand advertising and nothing else. | | Marketing is hard, and anyone just throwing money at something | isn't going to win hard. | | For an established brand, user acquisition is going to obviously | have to be more targeted. Putting ads on 'Breitbart' was never | going to drive new customers. | | In fact - I don't think 'banner ads' will drive any new customers | for Uber. | jsnell wrote: | > So Uber has 15B revenue and they only spend 150M globally on | acquisition ad spend. | | The events described here happened right at the start of 2017, | so you wouldn't want to look at their current revenue. Their | 2016 revenue was $4 billion, 2017 revenue was $8 billion. | zuhayeer wrote: | "For ex, one ad network launched 'battery saver' style apps in | Google Play, giving them root access to your phone. | | When you type the word 'Uber' into your Google Play, it auto- | fires a click to make it look like you clicked on an Uber ad and | attribute the install to themselves " | | The things you can do on Android devices are insane. Also ads | aren't necessarily for conversion, they're for permeating brand. | notional wrote: | I like that this story references the #deleteUber tag on Twitter | because it helps organize the timeline of events going on at | Uber. | | There was another twitter thread on here recently about the | chaotic and disastrous (though successful) Swift rewrite they did | which happened during the same time frame. | https://twitter.com/StanTwinB/status/1336890442768547845 | | During those time frames is also when all of the execs were | quitting or being fired, along with their internal harassment | problems. | | It feels like Uber has really succeeded in spite of itself. | dschuetz wrote: | Welcome to the Advertising Tech Bubble. | ghaff wrote: | Maybe. A lot of people have been saying this for over 10 years. | If it's a bubble that's real though, the effects are going to | be pretty widespread. Not only do two of the biggest (and best- | paying) tech employers get slammed, but so do all the inter- | related companies. And, also BTW there will also be a lot fewer | fat exits for startups if Google and Facebook acquisitions get | turned off. | dschuetz wrote: | First signs of bubbles are fraud and wrong valuation. | Gibbon1 wrote: | First sign to me that the dot bomb was imminent was a two | inch article in the WSJ summarizing a finding that | something like 2/3rds of startups had board members or | upper managers that had been sanctioned or investigated | previously for securities fraud. | | It's telling that all the FAANG companies are basically in | open violation of a number of laws. | jonplackett wrote: | I remember reading a while back that if you pay for likes from a | like farm VS genuine, you get about the same quality of likes | because the like farms have to like EVERYTHING to cover their | tracks. How is anyone supposed to know they're really getting | what they paid for? | icedistilled wrote: | Uber instructs ad buys to block all ads on breitbart, but ads | still appear regularly. Uber identifies agencies that are | responsible and stops all advertising buys with them. It amounts | to 10% of their ad budget, no change in new users is detected | despite 10% drop in ad spend, about 15M. | | Edit: oops didn't finish the whole thread. | | Next uber turns of 2/3 of the ads. 100M. Still no effect. | liminal wrote: | I know someone who worked at a marketing "machine learning" | company. The ML really needs to be in quotes, because if you | looked under the hood you'd see the people behind the curtain | (literally -- Amazon Turk workers). But VCs loved them, customers | loved them. The blind selling to the blind... Marketers had money | to spend, ML is the hotness, everyone makes money! (My friend no | longer works there) | dorkwood wrote: | I read a news article yesterday that had the same ad repeated | roughly 20 times. Would the metrics show a separate impression | for every one of those ads I scrolled past? | | Also, despite the repetition, I don't remember what it was for. I | think it had a photo of a woman outdoors. | janmo wrote: | I think Uber is to blame here, reading the story it is obvious | that they bought ads from very shady sources/networks, probably | they went for the cheapest CPC. You get what you pay for. | justin_oaks wrote: | In reality, you get AT MOST what you pay for. There are plenty | of cases where you get much less, or nothing at all, for what | you pay for. | | This story goes to show that. | onion2k wrote: | "You get what you pay for" doesn't mean you deserve to be | defrauded for choosing the cheap option. | the_pwner224 wrote: | On the other hand, if you pay someone $20 to buy a brand new | ApplePhone 12 XS Max, you should expect to not get the phone. | The Twitter didn't mention anything about price; and it is | possible that the fraudsters were actually charging a normal | market rate; and nobody _deserves_ to be defrauded for trying | to get something for cheap; but if Uber was taking the | cheapest option then it 's hard to feel sympathetic towards | them - they're a big company with lots of marketing people | and they should know better. | kerng wrote: | Might be a possibility to disrupt the ad business. FB and Google | might be paid tons of money for providing little value or maybe | even toxic value. | asah wrote: | A lot of ad spend isn't about positive ROI but "being in the | game," i.e. if you _don 't_ advertise then customers, suppliers | and partners all perceive you as a market laggard. That | perception has major consequences. For example, the top technical | and managerial talent goes to your competitors. | | But there are companies that do little advertising - they have | other ways of building and sustaining their brands. | hugoromano wrote: | Got a call from our Google Ads account manager to better match | conversion analytics with Google Ads, after 90 days we found that | the ads didn't convert at all, no change in sales. End result was | to suspend our Google Ads budget. The best phone call I got from | Google staff. | TameAntelope wrote: | I hate to be that guy, but is there a source beyond a tweet that | I could read about this? Not to say the author isn't believable, | I just prefer the trust I already have in Reuters over | establishing trust for this new person all over again... | greenyoda wrote: | Related article posted earlier today: | https://news.ycombinator.com/item?id=25620707 | | It mentions that other big companies, such as P&G and Chase, also | noticed that cutting ad spending had no result on their business | outcomes. | cbsmith wrote: | Yup, the problem is advertisers want big numbers more than they | want ad performance. | sn_master wrote: | Can someone explain the tweet for me please? I am really confused | on what she's trying to say. | DanBC wrote: | Uber were running ads, and some of them were appearing on | Breitbart. | | There's a campaign called "sleeping giants" that looks at a | company's corporate values, and looks at where that company is | advertising, and asks whether that ad placement is compatible | with the values. Breitbart has freedom to say what they like, | but customers of Uber don't have to buy the megaphone. | | Uber tried to pull the ads from Breitbart. | | But the ads kept appearing. | | So Uber looked closer, and they realised some of the data | reporting was fraudulent. One ad company had a "battery saver" | ap on Google Play. That ap had strong permissions, and it was | scanning for people typing "uber" into the Google Play store. | When they did that the ap made it look like the user had | clicked on an ad and then installed the Uber app when they'd | just organically found the uber app themself. | | Uber closed off a lot more of their ad spend and they found no | difference in user signup. | [deleted] | misiti3780 wrote: | How were the ads "slipping thru"? | joeblau wrote: | The podcast[1] does a lot better job of explaining what is | going on than Twitter. | | [1] https://www.marketingtodaypodcast.com/194-historic-ad- | fraud-... | misiti3780 wrote: | thanks | renewiltord wrote: | Some vendors weren't respecting the Breitbart ban. | MobileVet wrote: | Digital ad spend feels like an 'emperor has no clothes' | situation. No one wants to admit it, but it is highly inefficient | and fraught with fraudulent clicks / views. | rm999 wrote: | Back in the early 2010s I worked in ad tech on a data science | team, and one of the things we were pushing for was causal A/B | testing; basically turn off a campaign's advertising to a % of | people and correlate it with sales to measure ROI. | | As we were kicking this off I was at a conference chatting with | an executive at another ad tech company. His response: "oh yeah I | know a guy who tried that, he's not in the industry anymore." | | We almost immediately came to realize our launch clients were | getting negative ROI, sometimes severely so. AFAIK our efforts | fizzled out, and I believe none of the people on my team are in | the industry anymore. | saganus wrote: | I might be misunderstanding... but, negarive ROI? I.e, the more | they spent on ads, the less sales they got? | | Feels like a missed something, as that sounds... | counterintuivie. | | (Not in any way related to the ad industry so pardon my | ignorance) | jmfisch wrote: | As I read it, the amount they were spending on the ads | themselves was more than the converted revenue from ad | clicks. While the decline was probably (guessing) not linear, | spending more on ads led to less than proportionally more | revenue. If that had happened I can imagine calling that | negative ROI. | saganus wrote: | That makes more sense! | | Thanks | qeternity wrote: | No. A negative ROI just implies that the ratio of | benefit/cost is less than one. If I incur a cost/investment | of $100 but it creates value of $200 then I have an ROI of | 100%. If this same expenditure instead only produced $80 | value then I would have -20% ROI as in the value I'm | realizing from my investment is 20% less than the cost of the | investment. | alacombe wrote: | Ratio can't be negative, they can either be above of below | 1. What you are talking about is "$benefit - $cost", not | "$benefit / cost". | [deleted] | ddulaney wrote: | ROI is (net benefit)/(cost), where net benefit is (gross | benefit - cost). Net benefit can be negative, making ROI | negative if cost exceeds benefit. GP was using benefit as | a shorthand for net benefit, which can certainly be | negative. | loeg wrote: | Even gross benefit could conceivably be negative, if the | ads are bad enough! (I.e., a terrible ad might prevent a | sale.) | cmrdporcupine wrote: | Similar time frame for me, worked at an ad-tech startup, when | retargeting was first becoming a big thing and we were pivoting | the startup from the bad business idea it started to to doing | retargeting as a demand"-side-platform" (DSP) on ad various | exchanges. Tried myself to confirm whether any of it had any | positive effect, I couldn't really discern any increase in the | click-through-rate (CTR) for various approaches, but I'm not a | stats expert, etc. so talked to the founder about how we should | employ someone with a stats background. That convo went | nowhere, and for that and other reasons I was out the door | within a couple months. | | That was the era of the ad-exchange DSP bubble. After that I | went to work at another company that was on the other side of | the exchange pipeline and I could see all these DSPs just | plugging away doing their thing and none of it looked (to me) | like it was accomplishing much. It was all bottomfeeding off of | lower quality inventory but I suspect making big promises to | investors. | | That startup eventually pivoted a couple more times and sold to | a bigger player a few years later, making some money for the | founder but I suspect no value to the buyer. | dmix wrote: | Reading about startups that pivot dramatically multiple times | make me cringe so hard. | | The goal of pivoting isn't throwing spaghetti at the wall | until you hit something before running out of VC or angel | money. That just shows terrible product/marketing leadership. | | Your prior story is unsurprising combined with that. | syndacks wrote: | What do you mean by the two references to not being in the ad | industry anymore? Quit? Fired? Why? | karaterobot wrote: | Did they leave the industry because they realized their product | wasn't providing a positive ROI, or were they fired for | pointing that out to other people? I think the former is | probably what you mean, I just want to be sure. | rm999 wrote: | Good question. In the first case it was left vague but I | understood it as being fired and then not trying to find a | new ad tech job. In the case of my team it was finding better | industries to work in. | ben509 wrote: | Yeah, it could be that many startups try to do advertising | ethically, realize that it doesn't work, and drop out. That's | necessarily going to leave all the firms willing to sell | snake oil behind. | | You can get firms selling stuff that doesn't work that are | "trusted" simply because they've been around for years; there | are plenty of distinguished brands selling homeopathic | remedies, audiophile speaker cables, timeshares and MLM | schemes. | polote wrote: | That's what happen when you have too much money to spend and you | don't take time to evaluate if money is well spent. | Nextgrid wrote: | That's what happens when your own job is to waste oxygen, pull | numbers out of thin air and take credit for "conversions" that | were organic in reality; in this case you have no incentive to | optimize things because you'd inevitably show the company your | own position and maybe entire department is irrelevant and a | waste of money. | cbsmith wrote: | No, it's what happens when the objective is something | different. The objective is often to get big ad views & | audiences, not to drive performance. | ozim wrote: | ... or deliver value to customers ... | johnrgrace wrote: | I work at a fortune 50 company, a top 10 advertizer. We have a | universal holdout poplation that NEVER recieves any | directed/targeted marketing that serves as a control group for | many marketing programs. Further in more mass areas there are | direct A/B tests that go on. There is a very strong awareness of | campaigns that are measurable with ROI's and other programs that | are general branding that you can see the impacts in gneral | customer awareness surveys', favorability ratings etc. | PragmaticPulp wrote: | Measuring as spend ROI is standard practice on any large scale | ad campaign. The trick about having a holdout population is a | neat twist. | | It boggles my mind when HN commenters start claiming that | measuring ad campaigns is impossible or that ads are | universally ineffective. Anyone who has spent time working with | large ad campaigns should know the tools and methods used to | measure these things. | | I suspect the HN sentiment comes from a common feeling among | techies that they are somehow immune to influence from | advertising, combined with a high adoption rate of ad blockers. | HN commenters tend to assume that other consumers are just like | themselves, which is far from the truth. In the real world, | advertising (when done right) is not only very effective but | not that difficult to measure using modern technology. | Judgmentality wrote: | > I suspect the HN sentiment comes from a common feeling | among techies that they are somehow immune to influence from | advertising, combined with a high adoption rate of ad | blockers. | | I don't believe this at all. The reason I am skeptical of the | effectiveness of advertising is despite engaging with dozens | of people over the years, I have never had a single person | provide me with convincing evidence that it works. Instead, | they simply repeat "but of course it works!" similar to your | comment. | | So, where is the evidence? | thu2111 wrote: | Google's yearly revenue | schappim wrote: | Your Fortune 50 company owns a heap of brands (at least 16+ | active) that span multiple demographics, geographies and maybe | more importantly self-identities. | | Does the "universal holdout population" span across all the | brands, or do you have a "universal holdout population" for | each brand? | Nextgrid wrote: | I really can't feel bad for someone who wants to pay 100M to | annoy people and waste their time. The "fraudsters" here have | done a service to society: Uber wasn't satisfied with the free, | organic growth they were getting and wanted to be more greedy and | pay 100M to litter the web with ads; the fraudsters took the 100M | and cleaned up their littering by "consuming" these ads with | fraudulent clicks while giving Uber the outcome they wanted, | albeit one they would've gotten anyway had they not been greedy. | [deleted] | franze wrote: | I was VP Growth for a fintech for a while. And the one thing I | learned that Paid Ads are a Trap. Here my open the read medium | article about this https://medium.com/@franz.enzenhofer/ads-are- | a-trap-80df01d2... | | Tl;dr: money is at best a halfway decent accelerator. And as long | as you don't massive positive retention just a sinkhole of fake | growth. And if you have this massive retention there are better | ways to invest your money. | lavp wrote: | I think all of us know deep down that something about online | advertising doesn't seem right. I'm still surprised at how big of | an industry it is given how ineffective it can be. To me it seems | overvalued. | ggm wrote: | For research we made ads which were grey, flat field, and | basically said "please don't click on me" and we got astronomical | numbers of clicks sometimes. Hmm... | netsharc wrote: | But... reverse psychology works? Wouldn't people be curious | what's behind the "curtain"? | ggm wrote: | Yea, there's some of that. | jedberg wrote: | There was a freakonomics podcast recently about advertising | (online and traditional). | | No one can actually prove it has any ROI at all. No one is | willing to run the experiments necessary. In the few cases of | natural experiments, where ads got turned off for some people by | accident, there was no change in buying behavior. | | https://freakonomics.com/podcast/advertising-part-1/ | | https://freakonomics.com/podcast/advertising-part-2/ | soared wrote: | I don't understand this line of reasoning. P&G, Unilever, | Cocacola, etc have never, not once in history, had a gung-ho C | level exec who said "Screw it, I'm going to find out if our | advertising works". And then either found it works and kept | spending, or found out it doesn't work and saved literally | billions of dollars. | | There is so much money at stake that could be either saved or | generated, its simply not possible that no one has looked at | it. I used to help Pepsi/Fritolay set up tracking to tie | advertising on youtube to in-store sales. They spent millions | of dollars to measure their ads, Google had a clean-room data | center specifically for pepsi/frito. The idea that no one | actually checked if this system works is simply not possible. | SheinhardtWigCo wrote: | > Google had a clean-room data center specifically for | pepsi/frito. | | Why? | morelisp wrote: | For brands that large the majority of their spend isn't | campaigns specific to new products, but overall brand | management. The experiments would need to run for years or | decades and if the prevailing belief that these are Red | Queen's Races is correct, the cost if they're wrong could be | the whole company. | Ericson2314 wrote: | Fortune 500 is a cesspool of insane inefficiency balanced by | equally ~~insane rent seeking~~ insanely secure revenue. The | sooner everyone understands this, the better. | xpe wrote: | First, care to define your terms? | | Second, inefficient relative to what? | | Third, so far, what you've written here looks like a rant, | not a predictive theory nor a powerful explanatory theory. | | Would you like to quantify your claim? Or at least make it | more precise? As it is, I don't think it advances your | argument. | | I'm interested in strong logic, data, explanations, and | persuasion. I see none yet. | Ericson2314 wrote: | > Second, inefficient relative to what? | | The sad thing is it's not inefficiency relative | comparable things. But anyone that has worked at these | places or sold B2B to them just knows it on intuitive | level that they are garbage, and need a heavy sedative to | think there are no alternative. | | > not a predictive theory nor a powerful explanatory | theory | | It's not. It's about letting go of some efficient market | ideal and _then_ finding new ideas. | | We can look at Fortune 500 case-by-case to learn new | things | | > Cola cola | | Sugar drug cartel. Despicable business with very stable | revenue despite being a net drag on society. (At least | "regular" drugs have a lot more upside!) | | > Proctor and Gamble | | Just as restaurants are reaching down market, and the | inefficiency of everyone cooking and cleaning is starting | to have market implications, we should see their reign | finally dwindle. Wash-and-Fold should follow laundromats. | The specialization means that stupid differentiation | between products for uninformative consumers (c.f. | https://en.wikipedia.org/wiki/Monopolistic_competition) | should go away and restaurants and laundromats optimize. | | Personal soaps and cosmetics (of course many soaps _are_ | cosmetics) however will stay as cultural reasons ensure | people will continue to clean themselves and not contract | that out for the foreseeable future. | kortilla wrote: | How is Coca Cola rent seeking? How about Apple? I suspect | you aren't using that term correctly but maybe I'm missing | something. | TheOtherHobbes wrote: | Coca Cola sells water with flavouring and quite | astonishing amounts of sugar. Apple sells nice devices | made by what might as well be slave labour. | | Both are propped up - actually maintained - by huge and | vastly expensive brand management strategies. | | The criticisms of individual campaigns here are missing | the point. It's not about micro ad spend, but the | _perception of value and manipulation of behaviour_ | created by the combined effect of multiple PR and | advertising efforts - which include traditional print and | TV /radio ad campaigns, guided advertorials disguised as | news in the MSM, interviews with prominent figures, | political campaigns of more or less obvious relevance to | the core business activity, state, national, and | international political lobbying, direct political | campaign donations, advertorials masquerading as | "freelance" journalism and blogging, managed astroturfing | on social media, shareholder relationship management, | product placements in movies and music promo videos, | articles about commercial visual design elements in trade | journals. And on and on. | | That perception of value is - unsurprisingly - extremely | valuable. And it's very much a US way of doing business. | Instead of producing products that are inherently | superior, produce something that is functional but | glossily packaged, brand it as a premium lifestyle | commodity, and charge exorbitant prices for it., | | The prices are traditionally far out of proportion to its | actual utility. In fact real utility may well be negative | - see also diabetes and any number of other health | issues, depression associated with social media use, | debt-driven spending on lifestyle products. Etc. | | So the rent seeking comes from a kind of cultural | squatting. There is value in dominating discourse in all | of these different ways, because discourse and narrative | define markets and ultimately control behaviour. And | while this is happening other kinds of discourse - which | may well have more real utility - are diminished at best | and crowded out at worst. | | So in this case it doesn't matter if Uber "wasted" their | money. Uber have their own branding thing going, and | explicit ad spend is a tiny part of that. | | And even if all online ad spending ended tomorrow, a | small number of corporations would have a difficult time | for a while, but the marketing industry as a whole would | inevitably interpret the change as minor damage and route | around it. | Ericson2314 wrote: | Because the ideology of capitalism is "cooridation | failure, whatever", It sure would be nice to find a way | for one of those companies to freeload off the culture- | shaping the others do, and bring the whole enterprise | crashing down! | TeMPOraL wrote: | Trademark laws exist to prevent such freeloading. In this | context, they ensure only the ones paying for the | culture-shaping can benefit from it. | treis wrote: | Effectively every restaurant in the US has to pay either | PepsiCo or Coca Cola. Similarly, if you want to buy a | non-alcoholic beverage at the grocery store it's mostly | down to those two (with Dr. Pepper having a much smaller | but still significant stake). Any competitor that emerges | just gets bought up by one of the three. | | Apple's half of the phone Duopoly. Either you pay them or | pay Google if you want a phone and want to buy software | for it. | ABeeSea wrote: | Restaurants only pay because consumers demand it and | would not visit the restaurant otherwise. That's not rent | seeking. That's market forces. And what they pay | correlates with how much their customers demand | coke/Pepsi. | [deleted] | [deleted] | Ericson2314 wrote: | Yes. But in fairness I retracted rent sneaking as a | combination of monopolization, bonafied rents, addiction, | and just shear damn inertia contributes to the malaise. | | Calling it all "rent seeking" is not a hill I want to die | one. | throwaway201103 wrote: | "Rent sneaking" is an interesting typo. Going to have to | give some thought to how to use that term in appropriate | context. | mumblemumble wrote: | The trick isn't figuring out whether advertising in general | influences people's behavior. The trick is in figuring out if | any particular advertising campaign generated more profit | than it cost to run. | | Also, there's one alternative that's often forgotten in these | discussions: Perhaps game theory is at play. It may be, for | example, that, across entire industries, advertising costs | more money than it's worth. But that everyone has to do it | anyway, because anyone who chooses not to will start losing | ground to everyone else. IOW, just like in the standard | prisoner's dilemma, choosing to act is less about increasing | your potential gains than it is about limiting your potential | losses. | | There is an interesting long-running natural experiment in | the pharmaceutical industry that suggests, albeit | inconclusively, that this is the case. | doopy1 wrote: | Distilling it down into "any particular advertising | campaign" is pretty myopic in this world. It's about | strategy as a whole over decades. Not every ad campaign is | to drive immediate sales or signups (direct response). | Branding and awareness campaigns can take years to run, and | these are ALL diligently measured at every stage. Losses do | occur do to negligence, malice, and poor execution all the | time, but the brands should take some blame as well as they | often feel compelled to spend. They have huge budgets that | they NEED to spend regardless of they perform - sometimes | due to accounting shenanigans, sometimes because they don't | know any better, etc. | ghaff wrote: | I suspect that a similar dynamic can be in effect with many | industry events. Everyone would collectively perhaps be | better off with pulling out of or at least scaling back on | big industry shows. But that doesn't mean it makes sense | for _just you_ to pull out. (And, certainly, your events | team probably isn 't going to push for scaling back.) | | There's also a huge mutual back-scatching thing going on. I | remember in a former life we wanted to pass on a big | software vendor's user group show because, while we sort of | needed their software for some important customers, we got | _very_ little traffic at this expensive event. Their CEO | called our CEO and basically said to him "Be a pity if | something happened to our partnership." | likpok wrote: | Part of the claim is that the people who are checking are ad | execs who, if PepsiCo stopped buying ads, would shortly be | out of a job (or have their budget and influence slashed). A | counter to this might be that different advertising channels | are likely not identically effective, and a TV ad exec has a | big incentive to poke holes in non-TV ads. | soared wrote: | Yeah that is what is usually given as the reason so I was | getting at a gung-ho CEO, CFO, CRO, Consultant, etc. | toast0 wrote: | See the Pepsi Refresh Project of 2010. Where Pepsi | redirected a sizable amount of ad budget (including super | bowl ads) to community projects. They abandonded this | strategy after a while because they lost market share. | | This is the biggest large scale test of advertising I'm | aware of. But it probably doesn't apply to all products. | amelius wrote: | They only lost market share because everybody else was | still using advertising. Therefore, this is not a test in | favor of advertising (only in the prisoner's dilemma | sense). | pkalinowski wrote: | So advertising works? If it didn't, those buying ads | would not take the pepsi market share | otabdeveloper4 wrote: | PepsiCo has third-party auditors that they employ to check | the checkers. | adkadskhj wrote: | How do you look into it though? I don't know, so i'm asking - | but my immediate thought is that you treat it like science. | You isolate an environment, advertise, and see if it has an | affect. But the implication there is that if it doesn't have | an affect, money is on the table. | | If this is even remotely close to reality then it makes sense | to me. Companies are more concerned with constant growth than | strict efficiency, imo. They're throw as much money around as | possible, and every cent lost or left on the table is panic | inducing. | | I also imagine different types or products and/or markets | behave quite differently. Eg a new product might very well | benefit from advertising - since no one can buy your product | or visit your store if they don't know it exists. | [deleted] | rriepe wrote: | "Half the money I spend on advertising is wasted; the trouble | is I don't know which half." - John Wanamaker | | Half was true in his time (a century ago) but I think our | numbers are way worse. | Ericson2314 wrote: | Yes, the advertising industry is just obfuscated basic income | for the twitter class. | karaterobot wrote: | There was a good piece of reportage on this subject last year: | | https://thecorrespondent.com/100/the-new-dot-com-bubble-is-h... | mgraczyk wrote: | This is completely false. Large advertising platforms have many | A/B tests that show significant differences in consumer | behavior between groups that receive different ad treatments. | | Ads might be less efficient than some believe, but it's super | easy to see that they "work", and advertising platforms do it | constantly. | mgh2 wrote: | Back in 2017, Uber sued Dentsu for ad fraud | | https://www.japantimes.co.jp/news/2017/09/19/business/corpor... | jefftk wrote: | _> No one can actually prove it has any ROI at all. No one is | willing to run the experiments necessary._ | | Depends enormously what sort of business you're in. I used to | work for a company where all of our sales came from ads, 100%. | It was trivially true that if we stopped advertising we would | have no sales. We were also committed to running experiments: | we knew how well all of our many advertising channels | performed, and we ran A/B tests for every change. | megablast wrote: | Yes of course they can. They can run trials in different areas, | and see if there's an increase in spend. They run tests all the | time. | spoonjim wrote: | This is nonsense. I had a startup completely powered by Google | Ads. Ads brought in nearly 100% of the traffic. When my billing | information with Google got mixed up and the ads stopped, the | traffic went to 0 immediately. | Mountain_Skies wrote: | Though not an intentional test, we found out what happens when | a movie gets a wide release but does not advertise. In 2008, | the movie 'Delgo' was released on over 2000 screens with nearly | no advertising. Because the production company could not find a | distributor, they spent their ad money on renting the screens | for a week, with the hope that some people would randomly see | it and word of mouth would spread, leading to the theaters | wanting to keep it for additional weeks. It became the lowest | earning wide release movie up to that point in time. Each | screening averaged two people per screening. More people saw | Conan O'Brien making fun of the movie in his monologue than | actually saw it in the theater. | | The reviews for the movie were poor but it had lots of | household names as its voice talent, including Anne Bancroft in | her final film. Good or bad, advertising likely would have lead | to more people seeing it than two per screening. Of course | there's no way to know for sure how many more would have been | enticed by the ads but we do know that going with zero | advertising resulted in a huge disaster. | mlthoughts2018 wrote: | This is really, really not true. Advertising lift has been well | studied, especially in metastudies spanning hundreds of digital | campaigns across Facebook and Google. These are independent | academic metastudies, with hundreds of millions of impression | data samples. | | Positive lift in the range of 0-20% is very common, and many | statistical aspects of causal inference on ad impacts are well | understood. | | Negative lift and flat campaigns are real phenomena too, and it | does deserve more widespread publicity that negative lift | happens in an appreciable number of campaigns, but that doesn't | take away from the overwhelming evidence that digital | advertising works and that the mechanics of positive lift are | well studied. | | Here are two of the foundational papers in this area: | | - | https://www.kellogg.northwestern.edu/faculty/gordon_b/files/... | | - | https://www8.gsb.columbia.edu/media/sites/media/files/Garret... | | Particularly Figure 1 (page 26) in the second link. That figure | alone utterly refutes any nonsense claim that digital | advertising doesn't have provably positive ROI. | jedberg wrote: | Did you read the transcript the for episode and the | associated links and notes? | | They back up their claims with studies of their own as well | as metanalysis. | newbie2020 wrote: | Maybe not for companies of uber's size/current reach, but small | businesses definitely do benefit from ads. They see an | immediate uptick in sales when they start advertising on | various platforms. | onlyrealcuzzo wrote: | You can A/B test ads pretty easily, and this is quite common. | With some degree of statistical certainty, you can tell how one | ad performs to another. | | You don't have control over your SEO results as well - but you | can also measure against SEO traffic with a high degree of | certainty. | | All big companies do this. | | Sure, you're never going to know exactly how many people you | advertised to would have organically, eventually found your | product and bought it. | | But that honestly doesn't seem that important compared to the | other metrics - which most functioning large companies have | decent data on. | | You're also never going to know how many of your customers ate | Green Eggs and Ham for breakfast. It's irrelevant. You have | decent insight into your direct-online ROAS, and that's unique | to direct online advertising, and it's important!! | | Yes, you're never going to know if that million dollars you | invested in online ads was the best use of that million | dollars. But that's not much different than building a new | factory, either. | | Edit: | | Specifically to Uber's case - they did NOT turn off 66% of ALL | ads randomly to no adverse effect (implying that all ads are | worthless). | | They DISCOVERED that a certain type of ad (paying for installs | on dubious ad networks) was mostly fraud. After turning off | 100% of this type of ad - they found no adverse effect. | | This is a fail on their analytics team. They should've been | measuring this type of ad better - especially given how big a | portion of the total spend it was - and had insight into | something not being right. They should have been able to do | this - and if they couldn't, because the network somehow didn't | give them enough data to do it, they probably shouldn't have | been spending this much money for exactly these reasons! | isoprophlex wrote: | Did you actually read the linked tweets?! | | Uber turns off a shitload of ad spending, nothing bad happens | to new user acquisitions. | | I'd say there are about a million better uses of a million | dollars than just pissing them away on a scam. | walshemj wrote: | Paying for crappy app installs on shady sites is not really | advertising. | | What they should have done was a proper hyperlocal SEO | campaign like Firestone Gieco, and Mc Donalds do. | m00x wrote: | There's a huge difference between a company that is widely | known for being the app for ride hailing and a small | company trying to get eyes on their new product. | coldtea wrote: | Well, Uber is known to everybody by now. To the effect that | "to Uber" is even kind of a vern/noun. | | Also people either need a hired transportation or not. If | they don't have a car or don't want to mess with the | traffic and need to go somewhere, it's either Uber or Taxi | usually. | | It's not like Coca Cola, which is well known, but people | could do without it (unless addicted), so needs to | constantly nag people. | | And it's not like some new product, which without | advertising nobody would even know it existed. | | In fact most of Uber's existance its operation has been | 100% advertising (spending VS money to offer cheap rides | and expand and gather "eyeballs" and "customers" without a | profit). In my book, customer acquisition without profit is | another name for advertising. | | So it doesn't sound strange that it could do without | advertising today. | | But what if there were 3-4 strong players in the same, each | eating in Uber's market share? You'll see how fast they'd | found advertising indispensable again... | thrav wrote: | There's an interesting question there about when this form | of advertising becomes obsolete. | | Uber is in a very different position than many other | companies. Anyone who browses the internet with regularity | is already aware of their existence and probably just needs | the right set of circumstances to come together to make | Uber useful to them. | | I suspect the results would be different if Uber were | earlier in their adoption curve, but maybe that's not true | either. Maybe they'd be ignored for different reasons at | that time. | wasdfff wrote: | Likewise, I probably haven't seen an ad for coca cola or | kleenex in a while. Once a brand is ubiquitous to the | point where soda becomes coke and tissues become kleenex | in the lexicon, it feels like ad spend is wasted. | DanBC wrote: | Coca Cola spends billions on ads. | | 8 million views: | https://www.youtube.com/watch?v=yg4Mq5EAEzw | coldtea wrote: | > _8 million views_ | | So, less than a viral cat video? | ajsnigrutin wrote: | Is it really christmas time, if there are no cocacola- | trucks-driving-to-town ads on tv? | jhawk28 wrote: | Brand advertising is different. It is there to remind | people about the brand. Companies do it because they have | the analytics that show that it works. | Retric wrote: | They mostly do it from inertia, how well it works is a | separate question. Historically you can find many | examples of hugely successful advertising campaigns, it's | much harder to quantify the negative. | LoSboccacc wrote: | > You can A/B test ads pretty easily | | A/B testing ads is a complex matter. you can A/B traffic and | conversion easily, but a lot of established companies with | fierce competition fight for mind share, not direct | conversion; for that, you have both awareness effects (user | won't forget about coca cola if they don't run ads for a | month, and an ad that doesn't directly convert but increase | awareness still has value) and coverage synergies (the number | of repetitions in a day will increase coverage non linearly | and the amount of channel repetitions will increase awareness | more than a single channel view, even if it doesn't convert | immediately) | azornathogron wrote: | > All big companies do this. | | Except Uber, apparently? Or would the method you're talking | about not have discovered that something fishy was going on? | (I don't work with ads so I don't know the limitations of the | type of experiment that you're talking about) | onlyrealcuzzo wrote: | It would work for some of Uber's ads. From the article, it | looks like they were frauded mostly by in-app ads. And they | were paying for installs - not actual trips. | | So, no, Uber's advertising here is a little different than | (I think) the majority of companies. They are mostly paying | for installs rather than sales / conversions. A lot of | newer "app" companies could be in similar situations. | | Though, honestly, this seems like a massive fail on their | analytics team for not figuring this out earlier. They | should have been able to see that all of these "installs" | from certain advertisers were not leading to trips. | | In fact, it says they turned off 66% of ads. They didn't | randomly turn of 66% of ALL ads. They turned off this TYPE | of ad, which they failed to earlier recognize was | ineffective. | | Step 1) assume your ads won't work. | | Step 2) have enough analytics / logging in place to | convince yourself the ads do work. | | Step 3) if they don't work, turn them off. | | Looks like they skipped step 2 - which honestly, is not | uncommon for a fast growing business - even if they are | huge and already make a lot of money. | | What they found isn't even what people are discussing. They | found that certain networks they were buying ads from were | almost 100% fraud (which is pretty well known). | | Instead, people here seem to be discussing that most online | advertising is fraud, and/or that there's no way to prove | it's effective. That is absurd. | lincolnq wrote: | Hang on though, in the linked thread they said that the | fraud was incurred at the point of _real users_ signing | up for uber -- when they type uber into the app store | search (e.g. an organic install), the ad network | fraudulently takes credit for it at that point. So | "enough analytics/logging" would not do the trick here - | I think they would have noticed if a certain type of ad | wasn't leading to trips, as you are pointing at. | nojito wrote: | This is all discussed in the podcast. | | There's no revenue change even after testing (when you tack | on costs of ad delivery). | adrusi wrote: | It can happen that an almost certainly bogus scientific field | persists for decades using state of the art research methods | and no bad faith on the part of the researchers (any bias | they introduce is probably not conscious). | https://slatestarcodex.com/2014/04/28/the-control-group- | is-o... | | A/B testing is... not a state of the art scientific research | technique. Moreover the companies that provide the tools to | do A/B testing are the same companies that sell you access to | advertising space. I'm not saying that it's a common practice | to defraud A/B tests, I'm saying that the fact that adtech | companies have chosen to enable that research methodology out | of the set of all methodologies they could offer suggests | that we should expect, before seeing the results of any A/B | trial, that the results will tend to favor the adtech | narrative. | | I don't think that people in the adtech space believe they're | selling a bogus product, but I do think they wouldn't want to | know if they were -- they have a good thing going. | | If you're employed in adtech you're mostly fine, skills | transfer. If you're invested in adtech, do what you can to | diversify away. Advertising is overvalued to some extent and | that bubble will burst at some point or other. The question | is just how much actual value advertising provides, how much | will remain when the bubble bursts. | oli5679 wrote: | > Sure, you're never going to know exactly how many people | you advertised to would have organically, eventually found | your product and bought it. | | This is typically an order of magnitude less than the | attribution figures stated by digital marketing experts. A/B | test is the right method to use, but the crucial thing is you | need an earmarked population to see zero adds over your | attribution window, since what you care about is impact on | incremental sales, rather than incremental click likelihood. | | There is a long econometrics literature on this and it is not | a fussy technicality, the figures typically differ by 10x +. | gregoryl wrote: | Instagram definitely does this. I'm part of the magic | cohort who never see any ads :) | maxerickson wrote: | So how much ad spending is going to 'dubious ad networks'? | | Are they easy to categorize? Or is it a big secret what's | dubious and what isn't? | nabla9 wrote: | >but you can also measure against SEO traffic with a high | degree of certainty. | | None of these benchmarks distinguish between the selection | effect (clicks, purchases and downloads that are happening | anyway) and the advertising effect (clicks, purchases and | downloads that would not have happened without ads). | | You can fix this by dividing the target group into two random | cohorts in advance: one group sees the ad, the other does | not. Designing the experiment thus excludes the effects of | selection. | | When you do this experiment correctly, you find out that ads | have low effect or are not cost effective (as eBay | discovered). | st1x7 wrote: | > Sure, you're never going to know exactly how many people | you advertised to would have organically, eventually found | your product and bought it. But that honestly doesn't seem | that important compared to the other metrics... | | Wait, why wouldn't that be important? It seems like the most | important question since it asks whether advertising has any | significant impact at all. | megablast wrote: | Does advertising create an increase in buying your product. | That's the most important question. | monkeybutton wrote: | At least with ecommerce one can track users that have | seen and/or clicked on ads with what they have purchased | and return on ad spend can be calculated. | | But yes, the question still is: does it raise intent or | did the user already want the thing, googled it, and | clicked on the first result (which is your ad, above the | organic results that also lead to your online store)? | dlp211 wrote: | The fundamental problem with this is that if I bought | your product, it's because I was looking for your product | after doing a decent amount of research which meant I was | on a bunch of retargeting lists and you've wasted money | on me. I have never to my recollection purchased anything | because of an ad. If I have clicked through an ad, it was | simply because it was the quickest way to get to the | website/product. | | There is a role for advertising because Google polluted | their organic search results with Ads making it harder | for you to find what you want and forcing you to compete | for the top Ad spot. I realize that I can only speak for | myself, but I have never seen any evidence that | advertising works and I've worked in ad tech. | ipsum2 wrote: | It's pretty clear to see direct causation when using ads | to promote your product. Promote your product using ads | for 1 month, then turn off ads and see how many sales you | get. For a majority of e-commerce, you'll see a | substantial drop. | Aeolun wrote: | If you are sinking $100M in, I sure hope it's having some | effect. | asdfasgasdgasdg wrote: | Maybe the person is referencing how difficult it is to | determine the value of the counterfactual? If it were | possible to determine I imagine people would really want to | know. | wonnage wrote: | There's still value in getting people to buy _now_ instead | of maybe buying later. | joe_the_user wrote: | The thing about the "advertising doesn't matter" argument | is that there are situations where advertising absolutely | matters - when a company is just starting out and there's | no way they can get organic referrals, when the public is | unaware of their existence, etc. | | Moreover, most companies started small at some point so | advertising and maintaining advertising made sense up to a | point. | | And if we look at those companies where maybe advertising | actually doesn't help, companies that have reached a level | of success where organic referrals and public awareness | drive most of their business. And they're ongoing | businesses that probably reached that level through | advertising and have money now to use for that. | | But not only are they already advertising but they don't if | their word-of-mouth/public-knowledge presence will last | indefinitely, they don't know if just word-of-mouth would | let them control their image, would stand-up against future | competitors ads and so-forth. So, even supposing you could | show advertising didn't offer any immediate increase in | customers, continuing to spend on it doesn't seem to me as | irrational as it sounds. | raverbashing wrote: | This is the point that a lot of people are missing | | Uber shows up in the news and in conversation every day. | Most people have heard about it by now. Very few people | are going to install it because they saw an ad. | | Not the case for your neighborhood "Bob's Burgers" or | "Uber Competitor" or some other new company. Or for | specific marketing actions of known companies | (promotions, new services, etc) | ghaff wrote: | Furthermore, many of the people who say they hate | advertising also hate PR and other sort of marketing | campaigns. So presumably their theory is that people | should build something and just hope people will discover | them somehow. | mumblemumble wrote: | It's critically important for adtech companies' customers, | since it's an essential part of determining return on | investment. | | But it's also critically important for both adtech | companies and data scientists who work in the space to | direct people's attention away from those sorts of metrics. | You generally don't want to call the attention of the | person who signs your paycheck toward the fact that it's | all but impossible to really know for sure if your service | has delivered them any net benefit. | pnw_hazor wrote: | This is creeping pretty close to the legal definition of | fraud. | | But advertising has had a fair amount of safe-harbor | carve-outs for over a 100 years or so that are not | available to other industries. So it is no surprise it | continues today. | | edit: I hate to say it but the auto-downvoters here on HN | are approaching reddit levels. Everything I said above is | true. | [deleted] | [deleted] | jodrellblank wrote: | > " _edit: I hate to say it but the auto-downvoters here | on HN are approaching reddit levels. Everything I said | above is true._ " | | It's not that you're wrong, it's that you're boring. | | "I knew this years ago, look how my cynicism is superior | to your naievite" is a boring comment to read. You could | explain why you think this is any closer to fraud | compared to selling anything else and claiming it's the | best in its class, or what safe-harbor carve outs by | whom, or why they matter more than other effects, or what | you think should be done to change them, or _anything_ | more substantial than "I'm not surprised". Oh aren't | you? Great, cool story bro. Except it's not /even/ a cool | story. | | It's old man "get off my lawn". It's every tech forum's | old-man status grabbing which is now approaching Reddit | /r/SysAdmin levels on HN. The only question is whether | aggressive downvoting can curb its growth here before it | gets a choke-hold. | imdsm wrote: | It's sad to see the downvote culture come here. | Downvoting is meant for removing contributions that don't | add much to a discussion, not for indicating whether | someone agrees or disagrees with you. It seems to be a | norm that is spreading though, sadly. | | It would appear jodrellblank is perfectly demonstrating | how to misuse the feature, by calling you boring. Not | exactly the kind of attitude that we want to have around | here. | TeMPOraL wrote: | This is the industry whose job is to manipulate and | deceive people. It should surprise no one that, if they | do that to others, they'll do that to themselves as well. | posedge wrote: | Listening to the podcast just a minute ago as I found this | post... What a coincidence. I second that recommendation. | guerby wrote: | "No one is willing to run the experiments necessary." | | Tesla is one natural experiment about not spending money on | advertising in the mass media compared to traditional car | companies that spend HUGE amount of money advertising. | | https://www.motorbiscuit.com/gm-spends-an-embarrassing-amoun... | | "Hyundai spent $4,006 per Genesis vehicle sold in 2018. Ford's | Lincoln brand came in second with $2,106 per vehicle sold. | After Jaguar and Alfa Romeo, GM's Cadillac brand came in fifth | with $1,242 spent per vehicle sold. Tesla was the lowest at | just $3 spent per vehicle sold." | toast0 wrote: | Telsa is in an enviable position of selling most of their | cars before they're produced. In that position, you don't | really need to advertise much. They also get a lot of PR to | keep up brand awareness. | | If Hyundai couldn't keep Genesis vehicles on the dealer lots, | they'd advertise them less too. Having a dealer network means | dealers that want manufacturer support in advertising to keep | dealers happy, even if the new cars sell themselves, dealers | need to get people in to sell used cars. | morelisp wrote: | Tesla's marketing spend is whatever it costs them in legal | fees and fines to keep the mouthy celebrity CEO - and their | high-profile campaigns in 2018 seemed pretty effective. | specialist wrote: | I get downvoted whenever I propose digital advertising bubble | will pop once people wise up to the fraud. | lern_too_spel wrote: | The ad buyers aren't smart enough to measure the actual | effectiveness of their ads, and the ad sellers are not | incentivized to teach them how to do it. This can go on for | an arbitrarily long time. | Wowfunhappy wrote: | I'm only about halfway through the first of the podcast | episodes you linked (thanks!), but just thinking about this | logically for a moment: | | I would not be shocked to learn that advertising for a specific | product or event is not particularly effective. However, I'm | inclined to believe it has a huge effect on overall brand | recognition. | | Let's say you go to Amazon to buy a roll of toilet paper. How | do you choose from the literally hundreds of options? You could | spend a day of your life reading reviews, and trying to parse | which ones are fake. Or you could buy the toilet paper from | Scott because you recognize the brand. | | As I see it, buying brand advertising is a lot like buying an | expensive suit. It's not that the suit makes you more | productive, but it is a sign of professionalism, and--frankly-- | of wealth. If a brand is advertising everywhere, you know they | aren't a fly-by-night company, and their products likely meet | some standards of quality. | dehrmann wrote: | There's also the bit about luxury (mostly) car commercials. | Half their purpose is to remind you that you made a good | decision buying your <brand> car, and maybe your next car | should be the same brand. | mumblemumble wrote: | > No one is willing to run the experiments necessary. | | Not without reason. Even without the conflict of interest that | Nextgrid points out in a sibling post, there's still a | significant financial barrier to attempting to measure this | stuff. According to a former professor of mine who spent a | large chunk of his career studying this stuff, the size of | study you need to conduct in order to get any kind of | statistical power at all on an ROI study is just absurd. See, | for example, the treatment starting on page 15 of: | http://www.davidreiley.com/papers/OnlineAdsOfflineSales.pdf | mgh2 wrote: | Additional resource discussed in the past: | | https://news.ycombinator.com/item?id=21465873 | im_down_w_otp wrote: | Gabriel Leydon of Machine Zone spoke to the general topic at | Code/Media back in 2016. Basically discussing that they'd gone | through the trouble of building internal expertise and tools | for optimizing their ad spend to better ensure specific | outcomes they desired/required in a way that would inevitably | lead to more sophisticated ad buyers and putting a nail in the | coffin of traditional media advertising. | | https://www.youtube.com/watch?v=oXBqzpExvrk | disgruntledphd2 wrote: | Alternatively, they dumped hundreds of millions of dollars | into ads based on a wildly unrealistic notion of a customer | lifetime (much like the rest of Silicon Valley). | im_down_w_otp wrote: | I didn't say they achieved their goal. Though I do think it | was/is an admirable one. It would be nice if marketing | budgets weren't a near limitless accountability-free money | pit. | zamalek wrote: | > there was no change in buying behavior. | | I suspect that if our browser isn't blocking ads then our brain | is. It's complete conjecture, but I assume that adblockers | eliminate this cognitive load explaining a portion of why they | became successful before they were necessary for | security/malvertising. | indymike wrote: | Beware extremes like "no one can actually prove". One | difference between internet ads and their more ethereal tv and | radio predecessors is that adviews, clicks and purchases can be | tracked. Also, there are techniques that can make even TV, | radio, print and even digital to physical world ad performance | more visible: coupons, response codes and campaign-specific | phone numbers and URLS. That Uber was buying hundreds of | millions in ads and could not attribute performance (sales, for | example) speaks more to poorly designed campaigns and | potentially very bad actors in the supply chain. | tempsy wrote: | it's funny how trillions of dollars in market cap are built on | top of some service with unprovable and questionable value. | tiahura wrote: | > No one is willing to run the experiments necessary. | | Or, no one is willing to share the results of the experiments. | legitster wrote: | I work in digital marketing and this episode made me want to | tear my ears off. | | First of all, they didn't differentiate between display or PPC | advertising. PPC you only pay if the user actually engaged with | the ad. Nearly all of the anecdotes they used where about | online display advertising - a known crock. | | And we absolutely run experiments all the time! In fact, we tie | our ad spend directly to conversions. If anything, the market | is _too_ efficient - it 's really hard to get more than what | you are paying for. | jedberg wrote: | But the experiments you run pit one ad type or channel | against another. Have you ever run any experiments comparing | ads to no ads? | Ericson2314 wrote: | Great subject matter, but boy does reading the transcription | remind me why I hate podcasts. Stop infantilizing the audience | with these coo-coo-ing sounds bites and get to the damn point | already! | lumost wrote: | It's unclear how this experiment would be done. In the case of | brand advertising, it's likely that brand awareness would decay | over some period of time and in turn purchase behavior would | change. | | It's not currently possible to run an A/B experiment with a | hold out group of potential customers across all channels, let | alone for any longer duration experiment. So how can we | separate cause and effect? (although pay per conversion | channels do get gamed left and right) | marcinzm wrote: | Traditional brand advertising testing (TV, newspaper, etc.) | would be geography segmented as I understand it. So half the | cities got the campaign and half didn't. You can mimic that | with IP based geo-location although you'd get more leakage | than pre-internet. | pas wrote: | Come up with some new product that requires some personal | data for usage (eg. age, gender/sex, address). Start to | advertise this in just one country to one demographics, and | look how many out-of-target orders you get. | | Maybe it's even enough if you simply just sell it via mail | order, you can then look at the addresses. | | There's probably a natural information spread in any market | (word of mouth, trade magazines), and there's probably a | physical dispersion of the target group of people too (people | move, visitors/tourists saw the ad/product and order it at | home), but it still should be a valuable to see how much | effect just one campaign has. | | Maybe one of the best products for this could be a car. They | are pretty standard, really not much difference between them, | they are in all price ranges, and regularly new models come | out. Advertise one in a few major US cities but don't in | others. | marcinzm wrote: | These experiments are run all the time even before the | internet. I remember reading about how for broad brand | advertising they used to segment by city. Half the cities got | an ad for Coca Cola and half didn't. Then you compare sales of | Coca Cola. No one will publicly publish numbers because it's a | mix of sensitive sales data and competitive advantage (ie: | otherwise your competitors don't have to burn money running | their own tests). Also, smaller shops turn their online | advertising campaigns on and off all the time to test impact. | notional wrote: | Why does reddit have ads if all ads are a money pit? | | I understand you no longer work there, but ads started in 2009 | I believe, so you perhaps had some input on this? | mattkrause wrote: | Owning the pit into which other people throw their money | seems like it would be pretty lucrative. | ABeeSea wrote: | This is incorrect. Companies do the experiments. They just | don't publish the results. Why would they? The idea that Amazon | doesn't know the ROI on their ad/marketing spend is laughable. | otabdeveloper4 wrote: | > No one can actually prove it has any ROI at all. | | That's a philosophical question of whether you consider | statistics to be "proof". | | > No one is willing to run the experiments necessary. | | You're nuts if you think this is true. I assure you that | companies in traditional industries (i.e., without venture | capital) can and do run these experiments. | | The Uber story is about venture capital and its anti-market | incentives, not about the ad industry. | jedberg wrote: | Read the podcast transcript. An economist proposed turning | off print ads in one market to find out if they mattered, and | the head of marketing said he'd rather not know. | Razengan wrote: | I've thought and said so before: The ads racket is be a case of | the emperor with no clothes, at best. | | At worst, it's a front for building "profiles" of everyone. | | I can't recall the last time I bought anything _-because-_ of | an ad. | | If anything, ads have sometimes actually _put me OFF_ from | buying something! | pas wrote: | But someone did. "Brand awareness" is a thing. | | For example we can probably agree that for completely new | companies spending on ads makes sense. Or giving out free | samples, etc. | | Similarly for big companies doing media campaigns to keep the | new ones at bay makes some sense. | | Even if word of mouth is a thing, even if there are organic | searches, and even if it seems like a race to the bottom if | everyone just tries to outspend each other. | | It'd be great to make experiments about how to sensible | prevent/regulate this ad arms-race. But first better data | privacy laws. | paulsutter wrote: | Ecommerce sites have very fine grained measurement of their | advertising spend and know exactly the ROI (which is why they | focus so much on retargeting) | birdyrooster wrote: | Yeah I think Google and other advertisers are great at | predicting what people will buy and then shows them ads for it. | That's different than showing a person an ad and changing their | behavior, but to advertisers they can't know unless they | experiment. | [deleted] | carlmr wrote: | But that would still make their ad spend useful. Even if not | in the traditional marketing sense. | | But if you can't see any change in business from 2/3 of ad | spend at all it must be fraudulent. | josefx wrote: | > Yeah I think Google and other advertisers are great at | predicting what people will buy and then shows them ads for | it. | | Seems to be entirely subjective. | | I bought a new blade for a bread cutting machine on amazon, | the last one lasted ~25 years. My current recommendations: | blades for bread cutting machines. | | I also checked some Christmas decorations on Amazon, but | didn't buy any. So next to the blades I get Christmas | decorations recommended. January is a bit late for that, | isn't it? | | I also bought a single server rack on eBay. Now I regularly | get spam emails from eBay reminding me of new offers for | server racks. Even the company I work for doesn't have that | many, so why? | | In short I am not really convinced that these platforms are | good at predicting what I want. Rather it looks as if they | are good at showing me what I already have. | spatley wrote: | The answer to your confusion is that un sophisticated | remarketing (showing ads for searched or purchased items) | has in nearly all cases a measurable improvement on ROI. | Improvements to filter out useless ad views are much more | complicated and expensive. Advertisers actually don't care | about any individual case, but buy on aggregate results. | nobody9999 wrote: | >In short I am not really convinced that these platforms | are good at predicting what I want. Rather it looks as if | they are good at showing me what I already have. | | While that's definitely true (I get ads from Amazon for | stuff I've already purchased all the time too), in that | case Amazon is leveraging their own marketing channels to | support their own business -- which has, effectively, zero | marginal cost to them. | | However, when advertisers buy space from Google or FB, | that's not the case. There is a definite external cost to | such ad buys. | | As such, being able to identify the "value" of such | expenditures is (or can/should be) important to the | advertisers. | | That said, much of advertising is based upon the idea of | "top-of-mind awareness."[0] | | The idea being that if you are considering a purchase, the | brand that comes to mind without prompting when considering | that purchase will be preferred over brands of which you | aren't immediately aware. | | Purchase decisions made on a whim or without any research | are usually those which are low cost. Which is why | companies like P&G, Coca Cola and like companies focus on | "top-of-mind awareness." | | If you're going to buy a washing machine or a riding lawn | mower, you're much more likely to do research than if | you're going to buy a soft drink or a bag of chips. | | That said, the same "top-of-mind awareness" can be helpful | even for big ticket items, as those brands may well be the | first ones about which research may be done. | | Identifying how such advertising may impact purchase | behavior is a complex topic, and unless you can quantify | specific ad-views to actual purchases, doing so is | generally speculative and is the subject of a great deal of | quantitative market research[1]. | | [0] https://en.wikipedia.org/wiki/Top-of-mind_awareness | | [1] https://en.wikipedia.org/wiki/Quantitative_marketing_re | searc... | panda888888 wrote: | Agreed. Companies often don't understand the | "directionality" of purchasing behavior. | | For instance, I recently bought a new iPhone directly from | Apple, and I bought a case for it on Amazon. Now two months | later, Amazon is recommending that I buy an iPhone | (...which I bought two months ago from Apple). | | Buying a case an then waiting two months to buy the actual | phone would be a very strange thing to do, but Amazon seems | to think I should do this. | eitland wrote: | Remember this is the same Amazon that files C# and | Javascript books under "Law books" etc, I have documented | it: https://erik.itland.no/fun-with-amazons-ai-machine- | learning | | And Amazon is definitely not alone: Google has been | troubled with "AI" running rampant in search results for | years, seemingly with no or very little QA. | ghaff wrote: | I would guess it's fairly hard to encode a lot of rules | that are obvious to most people algorithmically. Amazon | does encode a likelihood of repeat purchases to some | degree; they offer a coffee subscription but not a weed | whacker subscription. | | But besides doing something like "purchases >$100 are not | likely to be repeat purchases," I would think it would be | difficult. | pas wrote: | The usual reply to this is that Amazon shows you that | because you might return it and then buy a new one, gift | it to someone, etc. | | They show it because it "works" for them, not because | it's wrong and they just can't somehow make sure they | don't show something. | | Because even if 99% of people don't buy anything twice, | 1% probably does for some reason, and that signal just | trumps all the noise. (And that's why most of ad spending | is bullshit, but since Amazon's cost [even with | opportunity cost] is basically 0 on their own site, | they'll continue to do this.) | alibrarydweller wrote: | I'm a fan of the podcast but one argument they cited seemed to | have a pretty glaring error - they looked at the case where | eBay was comparing incremental gain on search ads over no ads. | It's methodologically hairy because eBay is a very major player | with significant brand recognition. | | "When Tadelis was working for eBay, the company was in the | practice of buying brand-keyword ads. Which meant that if you | did an online search for "eBay," the top result -- before all | the organic-search results -- was a paid ad for eBay." | | This doesn't show that advertising doesn't work per se, it | shows that eBay didn't hire a competent ad buyer. Whether or | not you can prove the efficacy of advertising as a whole, this | is not a valid approach. | Nextgrid wrote: | > No one is willing to run the experiments necessary | | The people that would have the power to run this experiment | have their entire careers depending on things staying as-is. | Running the experiment carries a significant risk of exposing | that the advertising operations they're responsible for provide | much less ROI than they pretend it does. | | The unwillingness of anyone to run such an experiment is | already an answer. Why wouldn't someone jump at an opportunity | to prove the thing/service they provide actually works, unless | they were unsure about it themselves? | jedberg wrote: | Exactly. That's what the episode says too. The only people | who could run the experiments hinge their entire career and | industry on the results. | [deleted] | adwww wrote: | I used to work in this industry. | | A small tech team investigated fraud on our platform and | developed a system that was pretty robust at detecting and | potentially shutting it down. But literally nobody was | interested - even the people advertising don't want to know. | | The people spending money are typically networks, media | buyers, ad agencies, etc, far removed from the actual brand. | | There are so many parties who want a slice of the brand's | cash that they are all long past caring about whether the ad | is being viewed by a human or not. | walshemj wrote: | Agency or client side? | | I assure you the big brands CFO's take a huge amount of | interest in what is spent on advertising. | syshum wrote: | In my experience the Sales and Marketing teams of any | large company have the loosest restrictions on how they | account for their spending. | | Other dept;s like IT have to justify every penny, but | Sales and Marketing not sooo much | garciasn wrote: | I work in the field. Incrementality testing is a big part of | marketing measurement at any reputable agency. Any claims to | the contrary are FUD. | | That said, companies like P&G, Airbnb, and Uber, which are | oft-cited as examples of digital not being worth it, fail to | understand their own brand recognition and organic power, | built through prior marketing efforts, as key to their | current standing. | | Sure, TODAY, it doesn't have the impact they'd like it to | have but the investments PRIOR were key to ensuring their | success. | quacked wrote: | Quit and do something that isn't fundamentally detrimental | to everyone's quality of life. | | http://jacek.zlydach.pl/blog/2019-07-31-ads-as-cancer.html | dasil003 wrote: | Brand is a lot more than marketing spend, and not all | brands are equal. Google and Facebook have companies that | depend primarily on performance marketing spend over a | barrel. | TeMPOraL wrote: | How do you determine a reputable agency though? | | I worked next desk to people running a small ad agency. | Because we shared office (and I found them an intern), I | got a very good look at how they're working. What I've seen | can be summarized as: people who have zero clue or interest | in statistics writing "reports", with "graphs" they don't | even understand beyond "pointing up = good", proving | positive ROI to customers - who also have zero clue or | interest in understanding the numbers in the report, and | not enough visibility into the whole funnel to | independently check attribution. Both the agency and the | clients were engaging in a shared and completely | unjustified fiction of positive advertising return - and as | long as both sides were happy, the money kept flowing. | | I've been long since suspecting a lot of advertising on- | line looks like that. Every now and then, I see evidence in | favor. Like that good ol' Optimizely debacle, where it | turned out Optimizely was structurally optimized to help | people make invalid A/B tests, that erred on the side of | concluding the interventions were working[0]. And sure, big | brands with some superstar ad teams probably do this right. | But I think there's enough slack in most businesses that | advertising spend can get quite far detached from actual | ROI without anyone noticing (and with plenty of people | happily riding the gravy train). | | -- | | [0] - https://news.ycombinator.com/item?id=10872359 | nicbou wrote: | "It is difficult to get a man to understand something, when | his salary depends upon his not understanding it!" | Kyro38 wrote: | ~ Upton Sinclair | fortran77 wrote: | And, unlike most Internet Quotes, this one is apparently | real! | | https://quoteinvestigator.com/2017/11/30/salary/ | dllthomas wrote: | > Why wouldn't someone jump at an opportunity to prove the | thing/service they provide actually works, unless they were | unsure about it themselves? | | Because everyone is already acting like they know it works, | so the only way that experiment can change things is in a way | that's bad for the person in question. In that situation, | they should (from a local, selfish perspective) be resisting | even if they're awfully sure it _does_ work (and perhaps even | if they 're right!). | | Given that, I don't think the behavior has already given us | an answer. | disgruntledphd2 wrote: | Facebook's ad research team have run a lot of experiments. | | The goal was to demonstrate an impact of in-store sales | from internet advertising. They did the first studies in | about 2008-10, and have continued running these studies | ever since. | | They even built a tool so that advertisers can run these | studies, and get a sense for the incremental impact of | their ad. | | Google have a similar (less full-featured) system. | | Really, it's the rest of the ecosystem that has much of the | fraud, and I think that a lot of people in the industry are | aware of this. | pessimizer wrote: | > The goal was to demonstrate an impact of in-store sales | from internet advertising. | | So the goal was to advertise advertising. A more | scientific goal would be to see if there was an increase | of in-store sales from internet advertising. Instead they | were looking to design experiments that would show a | positive effect, with the goal of giving advertisers a | dashboard so they could run those experiments themselves. | coliveira wrote: | Not really, scientists for example also have their whole | careers based on the truth of some theories that they use. | However, they're willing to put them to proof in different | ways. The reason they do so is that they have a high degree | of confidence that these theories are true. This cannot be | said of people doing advertisement. | ssss11 wrote: | I'm not exactly sure what you're trying to say. | Scientists' whole careers are based on running hypotheses | to prove or disprove their theories. That IS their | career. | mkr-hn wrote: | And disproving a theory with lots of research backing it | would be great. Imagine if someone found a huge hole in | general relativity. There would be a boom in the grant | writing industry. | ACow_Adonis wrote: | The reproduction crisis in sciences suggest the self- | interest is pretty wide spread. | | And the social stigma in science of being someone who | tries to take down, discredit, or disprove your | colleagues/superiors/ competitors theories is pretty | substantial: IME there has historically almost been a | taboo against attacking our speaking negatively about | publications and your own sciences + faculties practices. | | The saying of sciences advancing one funeral at a time | doesn't exist because they're all such great skeptics and | falsifiers, and current scientific practice is heavily | biased towards positive findings and contains general | publication biases. | | indeed there's actually a LOT of common ground with | advertising self-interest, since a lot of publication in | science is effectively just advertising your brand... | justapassenger wrote: | It's like saying that no one who works on reliability of the | systems is willing to run experiment to throw 100% errors for | a month, because running experiment like that may show that | reliability of the systems doesn't matter. | | And then using data from a one system that went down and | nothing happened as a proof that systems reliability doesn't | matter at all, and it's huge scam by engineers. | johnrgrace wrote: | The experments are run. Why don't you look at the work that | comes out of the Advertizing research foundation. | x0x0 wrote: | Uber was just incredibly incompetent to not audit their ad | spend at all. | | I worked at an ad company. It was an absolutely standard | metric to eg geo-fence ads out of a state or two for 3 months | to demonstrate the impact of ads. This isn't easily | externally visible, but tests like this are standard | practice. | | Particularly in the app install space, which is sketchy as | hell once you stop buying from the top handful of vendors, | buyers should be auditing by a couple million in annual | spend. To get to $150m without looking hard at big chunks of | their spend is just plain arrogance and/or incompetence. | throwaway201103 wrote: | > Why wouldn't someone jump at an opportunity to prove the | thing/service they provide actually works, unless they were | unsure about it themselves? | | Because advertising in some form certainly works. If you can | determine that approach "A" that everybody is doing is | actually a waste of money but approach "B" is effective, then | you can develop services around approach "B" and market them | based on these findings. | ecf wrote: | As someone who believes that ad tech is the primary force driving | the ever growing consumer distrust of technology, I can't help | but feel a little giddy reading this story. | Snoozus wrote: | I have this suspicion that mobile ads have way weaker effect than | claimed. No-one in adtech has any interest in finding out. | Marketers don't want to lose budgets or importance either. So a | lot of money is wasted on annoying people. How sad. | wpietri wrote: | Makes sense to me. | | CEO: "We need to do something about growth!" | | Marketer: "Mobile ads are something!" | | CEO: "I read those are hot. Here's a bucket of money! Do lots | of something so we have lots of growth!" | | [spending ensues] | | As the Uber story shows, a lot of money gets spent without | anybody making sure that it actually works. The actual goal is | not to have an effect. It's to be seen as taking bold action. | If the business gets better, bonuses and promotions ensue, no | matter what the actual cause. Cargo cult management. | | It sounds insane, but I'm sure it's rife. Years ago I was | coaching at a Lean Startup weekend class. One team really | killed it, rapidly testing product hypotheses through real- | world testing. Their initial idea was quickly proven worthless, | but they listened to users and came up with an idea that would | sell. | | I kept in touch with one of those team members. He went back to | his prominent, well-funded startup, excited to improve his | company. But nobody wanted improvement. Execs wanted to sit in | a big room, think big thoughts, and produce specs. The | engineers were to implement those specs. But nobody would | measure the effects of anything. Proof that a grand poobah's | idea didn't actually pan out was deeply unwelcome. It slowly | drove my pal mad and he quit. The company bumped along for a | few years to a modest acquisition, but it never really lived up | to the hopes. | bastawhiz wrote: | I've been playing a silly phone game for about a month now. | Only last week I realized it has ads: I'd become so ad-blind | that I completely ignored the banner ad they keep at the bottom | of the window at all times. I only noticed it because it | flickered when transitioning to another ad. | jayd16 wrote: | I'm certain they do want to find out. Adtech still wants to | know where paying users are even if the total is less than | they'd like to claim. | PragmaticPulp wrote: | Engaging random marketing consultants is a good way to waste | money on ads. | | However, anyone engineering for advertising from the start of | your distribution plans should be able to measure these things. | It's not hard to track which signups came from ad clicks versus | organic traffic. The problem is that most companies start out | focused on their apps and simply assume advertising is a | totally independent function that happens elsewhere in the | company. Invest some time into including advertising as part of | your signup process and it's really not that difficult to track | LTV of customers who signed up via ads. | | In fact, that's how Uber confirmed this fraud. They noticed | that some of these fake customers were clicking on the ads and | getting signed up within seconds, which is something only bots | can pull off. If the customers you're getting from ad signups | aren't actually spending money in the app, you should know | about this from basic analytics. | chrisdinn wrote: | I think the problem is that the overwhelming majority of | digital ad formats just don't work. Does anyone who works in | digital ad tech genuinely believe that these formats work? I | have been here for the last ten years and have come to believe | they do not, certainly not comparable like traditional linear | TV or print in their heydays. | | There are exceptions. I think Google search ad works so well | it's eating the product. I think YouTube's TrueView is great | for modern brand advertisers (safety issues aside). But by and | large, banner ads, forced video pre-rolls, etc don't work. The | negative message of the format offsets any message you try to | convey. | | Yes, fraud is a part of this. But I think a lot of this | evidence looks the same as if none of their targeted, | performance-based advertising was doing anything at all, beside | really weak branding. | | Genuinely interested to hear from people who disagree. | staticassertion wrote: | Mobile devices tend not to have adblockers, so exposure might | be a lot higher. | | Also, the only ads I've clicked are mobile ads. I've even | installed apps via ad before - I've never once purchased an | item from an ad online (but I've also run an adblocker for a | decade). | | Ads certainly "work" by some metric, and some definition of | "work", but I think the metric and definition is unclear. | jackcosgrove wrote: | The only ads I click on are mobile ads, and that's because | many times the X to close them is too small. Other times | the ad is jumping around my screen and it steals my | fingerpress. | chrisdinn wrote: | I think CTD ads (click-to-download) are one of the | exceptions. It's a great format for some cases, eg games. | For game devs, trust that yours is addicting enough that | you can safely show your users a competitor's game knowing | they'll come back to you. For players, you were looking to | play a game anyway and maybe you want to try something new. | Click, download and play that instead. | wasdfff wrote: | Instagram ads for millenials are like flies to honey in my | anecdotal experience. So many of my peers buy their | furniture, dress shoes, clothing, water bottles, watches, dog | leashes, pretty much everything in their lives from seeing | some like-aged person use that thing on an instagram ad (and | the product usually being pretty cheap). It blows my mind how | successful these dime a dozen drop shipping companies based | on instagram are with millenials and gen z, and buying like | this will only be more normalized in the future as more | people know someone who got something nice from that | instagram ad. | spideymans wrote: | >It blows my mind how successful these dime a dozen drop | shipping companies based on instagram are with millenials | and gen z, and buying like this will only be more | normalized in the future as more people know someone who | got something nice from that instagram ad. | | Especially with stay-at-home orders due to the pandemic, | everyone (well, not everyone... but hyperbole) now has | their own drop shipping brand operated out of their | business, all selling the same cheap products off of | AliExpress. Will consumers catch on to what is going on? Do | they even care? | MivLives wrote: | Yeah I've noticed I've even been drawn to something because | of the mindless scroll to that's pretty neat, the button to | buy it is right in front of me. | | I suspect this really only works for more novelty things | like clothing that are cheap enough to enough to impulse | buy and of interest to image conscious people. | qwerty456127 wrote: | > overwhelming majority of digital ad formats just don't work | | Doesn't it? It may have miserable conversion rate, limited | target audience but it apparently is commercially viable. | People would hardly spend money on sending e-mail spam in | 2020 if it didn't work. | kbar13 wrote: | if you read the twitter thread we see that uber was | spending 10x more money than they should have on ads simply | because they weren't auditing where their money was going | towards. | | so there's evidence that people (incl uber, a market | leader) do indeed spend money on ads even when it does | nothing | Hnrobert42 wrote: | I got 0.66x, as in $100M out of $150M. I likely missed | something. Where did you see 10x? | chrisdinn wrote: | $100M was labelled "fraud" in this example, but there was | more waste uncovered in the remaining $50M that didn't | get that label. | rightbyte wrote: | How do we not know that the spam is sent out by one sucker | after the next that go until they realize it is not worth | it? | redisman wrote: | Mobile games run on this. They have a target user | acquisition cost and spend based on that. It seems to work | for some very profitable companies. People shouldn't try to | over read into this. Businesses can't run on irrationality | for very long | chrisdinn wrote: | I thought that at first. But like the original post points | out, Uber was spending a lot of money, not just in absolute | terms but in percentage terms, and it wasn't working for | them. | | There's an allure to making something measurable and | setting goals against it. Often, those goals take on a life | of their own. That's what I am suggesting happened here, I | guess. | cm2012 wrote: | Facebook and IG ads work. I agree that display network ads do | not. | chrisdinn wrote: | Ya for sure. I was a Googler so my examples were biased, | these aren't the only ad formats that work but there are | fewer than most people (even in ad tech) realize. | cm2012 wrote: | Yep, even FB "audience network" ads suck and are fraud | ridden. Newsfeed is a fundamentally great format for ads. | 2sk21 wrote: | However I have not logged into FB in six months because | the actual content in my newsfeed is so toxic. I wonder | if this will cause things to change, although it seems | unlikely. | janmo wrote: | Interestingly mobile ads are typically cheaper to buy than | desktop ones. | andrewjl wrote: | Does this mean that all of the so-called "small business needs | it" arguments against durable federal privacy legislation are | totally moot? | marcus_holmes wrote: | I learnt an old adage while doing my MBA: "Half the money I spend | on advertising is wasted; the trouble is I don't know which | half." - attributed to John Wanamaker. | | Online advertising was supposed to fix this. You could never tell | when a potential customer read a billboard, but you could | absolutely determine when someone clicked on an ad. | | I don't know what happened. I suspect everyone got obsessed by | tracking user behaviour and remarketing and all the bells and | whistles. | g42gregory wrote: | Wow, that's quite a revelation. Uber turns off 2/3 of ads and | metrics are the same. Eventually, with optimizations, they got | down to 10% of previous spend without loss of revenue. I wonder | if the Uber story is unique or it cuts across all advertisers. | How would this affect Ad Tech industry? | mrits wrote: | The ad industry has always claimed that fraud doesn't matter | because it is priced in. It's been over a decade since I worked | in click fraud detection but I believe Google's numbers were | around < 2-5% of clicks were fraud (someone here might have up | to date numbers). So this _is_ a huge revelation from my | perspective. | ghaff wrote: | Depending on the content of the ads, I could easily believe | that anyone who is remotely the market for even the occasional | Uber ride already has the app on their phone and, if they want | a ride will either use Uber, whichever ride-share is cheapest, | Lyft if it's available because they don't like Uber, or a | taxi/limo in situations where that's more convenient. | | I guess you can offer promotions but then you're giving money | away. | xyst wrote: | Impending crash - time to short the entire ad tech industry. | st1x7 wrote: | I just don't want to lose the web along with the ad tech | industry though. | vb6sp6 wrote: | The web existed before the adtech industry. It will live | after it. | wasdfff wrote: | As a smoking crater maybe. The web was orders of | magnitude smaller before the adtech. | skinkestek wrote: | yep, but it is mostly those parts I want back. I can | almldt live fine with: | | - programming blogs that doesn't have ads | | - Wikipedia | | - three or four online newspapers/websites that I pay for | anyway. | | - HN | | - all the old stuff: web rings and enthusiast web sites | | - I'd probably miss stackoverflow but I use that site | less and less these days anyways. | | Most of the rest can burn and we'd maybe be better off. | At least search results would be cleaner :-) | thu2111 wrote: | Wikipedia is constantly running ads. They're just | "charity" donation ads so you don't think of them as | such, but turn on the TV and you'll notice that charities | advertise themselves to get donations all the time. It | doesn't make it not advertising. | | As for HN, how long have you been using it? Are you aware | it's ad supported? Some stories are ads, usually for | hiring. | idunno246 wrote: | Working in iPhone games, our biz dev people made us integrate | with the shadiest of ad publishers. But we required attribution | and could track how much the users spent, so could stop | spending on them quickly, which was the normal result. Most of | the companies were surprised we wanted attribution and had to | build something custom, which to me means at the time nobody | else was tracking it so lots of customers must have been | getting fleeced. From the tweet, it's crazy that they were | spending 100m without tracking the quality of the users. | | Also worked in ad tech. There were some types of customers that | cared about performance, but the largest were typically | agencies and all they cared about was spending the budget they | were given. Everybody knows this is happening, you can | differentiate yourself slightly by doing better detecting it. | But at the end of the day people really care about customer | acquisition cost which includes the fraud, so if you had 0% | fraud everyone would just raise their prices or margins | Kalium wrote: | > Also worked in ad tech. There were some types of customers | that cared about performance, but the largest were typically | agencies and all they cared about was spending the budget | they were given. | | Large companies call it "brand" spending. Which is to say | they're spending to maintain brand awareness. Measuring ROI | would call the practice into question. | jsnell wrote: | > From the tweet, it's crazy that they were spending 100m | without tracking the quality of the users. | | They were high quality users: Uber didn't pay for installs, | but for installs + first ride. What's being alleged is that | the ad networks were detecting a user installing the app, and | fraudulently creating an ad display event to make it look | like the install happened due to the ad. | Triv888 wrote: | Cities discovered they'd been defrauded out of 2/3 of their taxi | revenues... By Uber.... Looks like money is flowing... | cm2012 wrote: | Friends don't let friends do programmatic direct response | advertising. Do it directly on the platforms yourself. | | I run an ad agency with relatively well known clients and I | consider the word "programmatic" in a resume a negative | correlation. | raverbashing wrote: | Care to elaborate more? What exactly is "programmatic direct | response advertising"? | cm2012 wrote: | So programmatic means using a 3rd party ad tech tool to place | your ads across all internet ad placements. | | Doing it directly means placing ads yourself on the biggest | platforms (Facebook, google). | | Direct response just means "if you actually want | results/ROI", as opposed to for nebulous brand goals. | jeffrallen wrote: | Lay down with dogs, get fleeced. | htwyford wrote: | Tim Hwang wrote an excellent short book that deals with this, | Subprime Attention Crisis: | https://www.goodreads.com/book/show/50403486-subprime-attent.... | He addresses that most interactive advertising is never seen and | prices are massively inflated. The attention is subprime, like | subprime mortgages. One companies realize most of their ad money | is being wasted, we might see massive recognizing in | Google/Facebook valuation and in the rest of the economy as a | result. | doopy1 wrote: | This book is the laughing stock of ad tech right now, it's got | some good ideas, but it's 90% sensationalized and half-baked. | The mortgage analogy is weak as well. This book is a money grab | more than anything. It's an attempt at stirring the pot. | drewwwwww wrote: | do you know if anyone has written a detailed critical | response? | | people in the industry it is about laughing it off i think is | to be expected. i doubt most traders in mortgage | securitization in 2006 would have agreed the sky was about to | fall. | doopy1 wrote: | I saw a nice synopsis from a finance person on reddit on | why the analogy to the mortgage issue is way off the mark, | but I doubt I can find it again. My point is that there's a | whole burgeoning industry in whining about how ad companies | are evil, but it's not really quite so black and white. | Balgair wrote: | What 10% of the book is good? | doopy1 wrote: | I think calling attention to issues with ad tech is good, | that's where my 1/10 score comes from. | twotimestuesday wrote: | I've been running on site attribution surveys[1] on a handful of | brands that I work with and the results have been pretty | surprising. Word of mouth tends to be overrepresented and FB | underrepresented though there is probably some sample bias so | it's far from a sure thing. | | [1] https://www.zigpoll.com/examples/attribution-survey | [deleted] | ohples wrote: | I feel like a company like Uber could of been justified put the | large majority of there ad budget into well placed physical ads | in cities and airports. ___________________________________________________________________ (page generated 2021-01-03 23:00 UTC)