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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

#21

Post by janmo »

ryanSrich wrote: post #9

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…

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.

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

#22

Post by Nextgrid »

polote wrote: post #15

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.

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.

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

#23

Post by birdyrooster »

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.

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

#25

Post by ryanSrich »

janmo wrote: post #21
ryanSrich wrote: post #9

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…

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.

Yeah so that’s the weird part that I didn’t mention. These ads only run in the US.

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

#26

Post by idunno246 »

g42gregory wrote: post #4

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?

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

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

#27

Post by chrisdinn »

qwerty456127 wrote: post #19
chrisdinn wrote: post #13

Earlier quoted context omitted.

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.

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.

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

#28

Post by cm2012 »

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.…

Facebook and IG ads work. I agree that display network ads do not.

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

#29

Post by the_pwner224 »

onion2k wrote: post #18
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.

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.

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

#30

Post by Nextgrid »

jedberg wrote: post #20

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-…

> 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?

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