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Uber discovered they’d been defrauded out of 2/3 of their ad spend

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Re: Uber discovered they’d been defrauded out of 2/3 of their ad spend

#11

Post by aetherson »

SteveGerencser wrote: post #8

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.…

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.

Re: Uber discovered they’d been defrauded out of 2/3 of their ad spend

#13

Post by chrisdinn »

Snoozus wrote: post #3

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.

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.

Re: Uber discovered they’d been defrauded out of 2/3 of their ad spend

#14

Post by janmo »

Snoozus wrote: post #3

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.

Interestingly mobile ads are typically cheaper to buy than desktop ones.

Re: Uber discovered they’d been defrauded out of 2/3 of their ad spend

#16

Post by Nextgrid »

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.

Re: Uber discovered they’d been defrauded out of 2/3 of their ad spend

#17

Post by franze »

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.

Re: Uber discovered they’d been defrauded out of 2/3 of their ad spend

#18

Post by onion2k »

janmo wrote: post #12

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.

"You get what you pay for" doesn't mean you deserve to be defrauded for choosing the cheap option.

Re: Uber discovered they’d been defrauded out of 2/3 of their ad spend

#19

Post by qwerty456127 »

chrisdinn wrote: post #13
Snoozus wrote: post #3

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.

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.…

> 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.

Re: Uber discovered they’d been defrauded out of 2/3 of their ad spend

#20

Post by jedberg »

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/

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