Why is no one discussing that the term "defrauded" is not substantiated by the tweet?
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
#172You 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…
> 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 +.
Re: Uber discovered they’d been defrauded out of 2/3 of their ad spend
#173Uber 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.
Re: Uber discovered they’d been defrauded out of 2/3 of their ad spend
#174Re: Uber discovered they’d been defrauded out of 2/3 of their ad spend
#175There 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."
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."
Re: Uber discovered they’d been defrauded out of 2/3 of their ad spend
#176Earlier 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.
Yeah that is what is usually given as the reason so I was getting at a gung-ho CEO, CFO, CRO, Consultant, etc.
Re: Uber discovered they’d been defrauded out of 2/3 of their ad spend
#177Earlier quoted context omitted.
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.
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.
Re: Uber discovered they’d been defrauded out of 2/3 of their ad spend
#178Back 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…
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)
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.
Re: Uber discovered they’d been defrauded out of 2/3 of their ad spend
#179A 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.
Re: Uber discovered they’d been defrauded out of 2/3 of their ad spend
#180Earlier quoted context omitted.
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.y…
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).
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.