Uber discovered they’d been defrauded out of 2/3 of their ad spend • Hacker News Board

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

#321

Post by ericol » Sun, Jan 03, 2021, 10:09 PM UTC

bigdict wrote: post #297

Together with https://news.ycombinator.com/item?id=25623858 it might appear like there's a coordinated takedown of ad tech companies going on. Google derives 80% of its revenue from ads, Facebook 99%. Imagine these giants coming down if it turns out that online ads aren't effective? EDIT: Tweaked the wording regarding the alleged "coordinated takedown" as a reaction to a comment.

I don't think that's the case. If you browse HN somewhat regularly, you'll see that a lot of times when a post makes it to the top (Or close enough) it's very likely that a related post will make the rounds pretty soon.

I think it's more related to people trying to ride the karma wave than "A coordinated takedown of ad tech companies". And it is effective, because it happens way too often.

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

#322

Post by jonplackett » Sun, Jan 03, 2021, 10:10 PM UTC

I remember reading a while back that if you pay for likes from a like farm VS genuine, you get about the same quality of likes because the like farms have to like EVERYTHING to cover their tracks. How is anyone supposed to know they're really getting what they paid for?

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

#323

Post by strictnein » Sun, Jan 03, 2021, 10:10 PM UTC

julienfr112 wrote: post #258

There is also one agent problem : manager status is linked to headcount or/and budget. As a head of marketing, you have no interested at all at reducing your ad budget, quite the opposite !

A smart manager won't just let their budget be cut, because that won't be good for the company. If they find that marketing approach X doesn't work as well as Y or Z, they will simply move funds to do more of Y and Z.

By doing so they will increase revenue and profits all the while keeping ad spending at the same level.

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

#324

Post by specialist » Sun, Jan 03, 2021, 10:11 PM UTC

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 get downvoted whenever I propose digital advertising bubble will pop once people wise up to the fraud.

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

#325

Post by gnu_beskar » Sun, Jan 03, 2021, 10:13 PM UTC

There is this nice book on the subject called Subprime Attention Crisis by Tim Hwang, on why the whole ad industry might be a bubble.

And this Freakonomics podcast episode on digital advertising https://freakonomics.com/podcast/advertising-part-2/

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

#326

Post by asdfasgasdgasdg » Sun, Jan 03, 2021, 10:13 PM UTC

st1x7 wrote: post #73

onlyrealcuzzo wrote: post #50

You 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. But that honestly doesn't seem that important compared to the other metrics... Wait, why wouldn't that be important? It seems like the most important question since it asks whether advertising has any significant impact at all.

Maybe the person is referencing how difficult it is to determine the value of the counterfactual? If it were possible to determine I imagine people would really want to know.

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

#327

Post by bigdict » Sun, Jan 03, 2021, 10:13 PM UTC

ericol wrote: post #321

bigdict wrote: post #297

Together with https://news.ycombinator.com/item?id=25623858 it might appear like there's a coordinated takedown of ad tech companies going on. Google derives 80% of its revenue from ads, Facebook 99%. Imagine these giants coming down if it turns out that online ads aren't effective? EDIT: Tweaked the wording regarding the alleged "coordinated takedown" as a reaction to a comment.

I don't think that's the case. If you browse HN somewhat regularly, you'll see that a lot of times when a post makes it to the top (Or close enough) it's very likely that a related post will make the rounds pretty soon. I think it's more related to people trying to ride the karma wave than "A coordinated takedown of ad tech companies". And it is effective, because it happens way too often.

I agree, I remember reading an article or a comment explaining this phenomenon on HN, with examples.

Nevertheless it would be interesting if the idea of digital ads being ineffective snowballed to the point where it became like a self-fulfilling prophecy, and led to the demise of large companies that we think of as "giants" or "monopolies".

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

#328

Post by dlp211 » Sun, Jan 03, 2021, 10:14 PM UTC

monkeybutton wrote: post #284

megablast wrote: post #272

Earlier quoted context omitted.

Does advertising create an increase in buying your product. That’s the most important question.

At least with ecommerce one can track users that have seen and/or clicked on ads with what they have purchased and return on ad spend can be calculated. But yes, the question still is: does it raise intent or did the user already want the thing, googled it, and clicked on the first result (which is your ad, above the organic results that also lead to your online store)?

The fundamental problem with this is that if I bought your product, it's because I was looking for your product after doing a decent amount of research which meant I was on a bunch of retargeting lists and you've wasted money on me. I have never to my recollection purchased anything because of an ad. If I have clicked through an ad, it was simply because it was the quickest way to get to the website/product.

There is a role for advertising because Google polluted their organic search results with Ads making it harder for you to find what you want and forcing you to compete for the top Ad spot. I realize that I can only speak for myself, but I have never seen any evidence that advertising works and I've worked in ad tech.

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

#329

Post by rightbyte » Sun, Jan 03, 2021, 10:16 PM UTC

oli5679 wrote: post #169

This is pretty interesting study at Ebay. https://www.nber.org/system/files/working_papers/w20171/w201... They tested the counterintuitive claims by performance marketers that 'brand' keywords (containing Ebay) had the highest ROI. They did an experiment and found that, contrary to attribution model, these Ebay keywords resulted in ZERO incremental sales, although they were clicked on by many people that purchased. T…

Obviously 'brand keywords' has the highest apparent ROI. It is users already looking for your site that click those. It is probably some internal bonus scam that fuel such nonsense - a industry wide marketing department conspiracy.

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

#330

Post by ddulaney » Sun, Jan 03, 2021, 10:19 PM UTC

alacombe wrote: post #302

qeternity wrote: post #194

Earlier quoted context omitted.

No. A negative ROI just implies that the ratio of benefit/cost is less than one. If I incur a cost/investment of $100 but it creates value of $200 then I have an ROI of 100%. If this same expenditure instead only produced $80 value then I would have -20% ROI as in the value I’m realizing from my investment is 20% less than the cost of the investment.

Ratio can't be negative, they can either be above of below 1. What you are talking about is "$benefit - $cost", not "$benefit / cost".

ROI is (net benefit)/(cost), where net benefit is (gross benefit - cost). Net benefit can be negative, making ROI negative if cost exceeds benefit. GP was using benefit as a shorthand for net benefit, which can certainly be negative.