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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

#141

Post by likpok »

soared wrote: post #99
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-…

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 th…

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.

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

#142

Post by pas »

lumost wrote: post #72
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-…

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…

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.

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

#143

Post by adkadskhj »

soared wrote: post #99
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-…

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 th…

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.

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

#144

Post by ghaff »

dschuetz wrote: post #49

Welcome to the Advertising Tech Bubble.

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.

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

#145

Post by otabdeveloper4 »

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 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.

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

#146

Post by cj »

undreren wrote: post #44
ryanSrich wrote: post #25

Earlier quoted context omitted.

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

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.

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.

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

#147

Post by otabdeveloper4 »

likpok wrote: post #141
soared wrote: post #99

Earlier quoted context omitted.

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 th…

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.

PepsiCo has third-party auditors that they employ to check the checkers.

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

#148

Post by speedgoose »

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.…

Isn't it "take away the ad" and Google will put first a ad link to a competitor instead?

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

#149

Post by xpe »

Ericson2314 wrote: post #139
soared wrote: post #99

Earlier quoted context omitted.

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 th…

Fortune 500 is a cesspool of insane inefficiency balanced by equally ~~insane rent seeking~~ insanely secure revenue. The sooner everyone understands this, the better.

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.

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

#150

Post by kortilla »

Ericson2314 wrote: post #139
soared wrote: post #99

Earlier quoted context omitted.

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 th…

Fortune 500 is a cesspool of insane inefficiency balanced by equally ~~insane rent seeking~~ insanely secure revenue. The sooner everyone understands this, the better.

How is Coca Cola rent seeking? How about Apple? I suspect you aren’t using that term correctly but maybe I’m missing something.
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