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.
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
#152I 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.
Re: Uber discovered they’d been defrauded out of 2/3 of their ad spend
#153There 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…
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.
Re: Uber discovered they’d been defrauded out of 2/3 of their ad spend
#154Earlier quoted context omitted.
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…
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.
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Re: Uber discovered they’d been defrauded out of 2/3 of their ad spend
#155Earlier 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…
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 e…
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.
Re: Uber discovered they’d been defrauded out of 2/3 of their ad spend
#156Earlier quoted context omitted.
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.
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Re: Uber discovered they’d been defrauded out of 2/3 of their ad spend
#157Some 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.
Re: Uber discovered they’d been defrauded out of 2/3 of their ad spend
#158Tim 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 val…
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.
Re: Uber discovered they’d been defrauded out of 2/3 of their ad spend
#159You 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…
> 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)
Re: Uber discovered they’d been defrauded out of 2/3 of their ad spend
#160Having 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.