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

#411

Post by pmontra » Sun, Jan 03, 2021, 11:19 PM UTC

unethical_ban wrote: post #350

cortesoft wrote: post #60

Earlier quoted context omitted.

The point of traditional advertising IS pretty much to waste money, similar to how the point of a peacock's tail feathers are to waste resources... it is a signal to potential partners (business or romantic) that they are so capable they can waste resources. It is a signal of bonafides.

I'm genuinely shocked at how many people think advertising doesn't work. Just because it doesn't make a person consciously stand up and say, "I want a Snickers" does not mean the ad didn't work. Like, honestly, are there people here suggesting viral ads don't work? Or don't understand the point of Coke or Mercedes Benz ads are for? Coke establishes themselves as the defacto soda. There is no other soda, or if they ar…

I understand the point but the MB example could be off the mark. According to their site [1] they sold more than 2 M cars in 2019. Luxury yes, at least a bit, but a pretty large club. Maybe Ferrari and similar brands? But they do a different kind of advertising.

[1] https://www.daimler.com/investors/key-figures/markets/

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

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Post by marketingtech » Sun, Jan 03, 2021, 11:20 PM UTC

nabla9 wrote: post #387

jasode wrote: post #259

>Stopped [some] Spending on Digital Ads, Nothing Happened. Why? [Added "some" for clarity.] Let me try to restate the author's article because he presents it in a confusing way. The issue is that both Google and Facebook have "core ad tech" that works decently with proven ROI -- and they both have "additional ad tech inventory" (a.k.a the partners/affiliates) that's much lower quality : Facebook "quality" ad placemen…

It's not about clicks or traffic. The real issue is selection effect vs. advertising effect SEO traffic benchmarks don't measure the right ting or show real ROI. FB or Google don't want you to measure the right thing. Traffic to the website has licks, purchases and downloads that are happening anyway (selection effect) and clicks, purchases and downloads that would not have happened without ads (advertising effect) m…

These are pretty easy to measure on Google or FB with their "lift study" tools and a conversion pixel. The lift tools will let you create a holdout group of X% of people who should be targeted by your ad. They won't see the ad, but you can still measure the rate at which they convert on your site. Then, you can compare that conversion rate to the rate of people who actually saw/clicked the ad.

Conversion pixels are never 100% accurate (and are becoming increasingly inaccurate due to browser/OS changes) and shouldn't be used to say "This ad generated exactly X sales that wouldn't have happened otherwise!", but you can examine the relative rates from people who saw or didn't see your campaign.

I've also seen companies who don't trust FB/G to grade their own homework on a known lift study, so they measure the effect by running PSA ads. Their ad campaign will be something like "Donate to charity XYZ!" but will be set to measure purchases on their website. That lets them establish the baseline purchase rate of the customers in their audience.

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

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Post by shiftpgdn » Sun, Jan 03, 2021, 11:20 PM UTC

cj wrote: post #146

undreren wrote: post #44

Earlier quoted context omitted.

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.

Is it possible to create an IP blacklist for your ads? Seems like blocking India, China and AWS/Azure/Digital Ocean would be step one.

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

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Post by kabes » Sun, Jan 03, 2021, 11:21 PM UTC

If ads don't work, how did the advertising industry convince people to spend on advertising in the first place?

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

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Post by ineedasername » Sun, Jan 03, 2021, 11:22 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.

No need for a conspiracy: one popular article sparks the submission of something similar, and given there was enough interest to make the first one popular, it's not uncommon for another to become popular.

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

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Post by reilly3000 » Sun, Jan 03, 2021, 11:23 PM UTC

As a publisher and ad network vet, I can vouch that Dr. Fou knows his stuff. He’s been one of the clearest voices about the mechanics of ad fraud. Any engineer would be enlightened at what wild escapades have been hacked into DOMs around the world on the backs of starving publishers. Any business person would see how much ad fraud has shaped the world we live it. He’s a fellow that’s definitely worth a follow!

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

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Post by nr2x » Sun, Jan 03, 2021, 11:23 PM UTC

I continue to believe the main reason Facebook is scared of new iOS tracking controls is people will figure out the CTR is the same without the tracking.

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

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Post by Aunche » Sun, Jan 03, 2021, 11:24 PM UTC

josefx wrote: post #74

birdyrooster wrote: post #23

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.

> Yeah I think Google and other advertisers are great at predicting what people will buy and then shows them ads for it. Seems to be entirely subjective. I bought a new blade for a bread cutting machine on amazon, the last one lasted ~25 years. My current recommendations: blades for bread cutting machines. I also checked some Christmas decorations on Amazon, but didn't buy any. So next to the blades I get Christmas d…

The probability that a random person would want to buy a blade for a bread cutting machine is nearly 0%. The probability that you will buy a blade for a bread cutting machine again is non-zero because you may be dissatisfied with your new one.

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

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Post by andrewjl » Sun, Jan 03, 2021, 11:24 PM UTC

joe_the_user wrote: post #299

st1x7 wrote: post #73

Earlier quoted context omitted.

> 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.

The thing about the "advertising doesn't matter" argument is that there are situations where advertising absolutely matters - when a company is just starting out and there's no way they can get organic referrals, when the public is unaware of their existence, etc. Moreover, most companies started small at some point so advertising and maintaining advertising made sense up to a point. And if we look at those companies…

That still doesn't address the GP point, advertising doesn't matter if you can get customers coming to you organically. Business size changes the odds of that, irrespective of that if the customers would have come to you anyway (and there are ways to know this!) then the ad spending was largely a waste.

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

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Post by johnrgrace » Sun, Jan 03, 2021, 11:24 PM UTC

TeMPOraL wrote: post #300

garciasn wrote: post #125

Earlier quoted context omitted.

I work in the field. Incrementality testing is a big part of marketing measurement at any reputable agency. Any claims to the contrary are FUD. That said, companies like P&G, Airbnb, and Uber, which are oft-cited as examples of digital not being worth it, fail to understand their own brand recognition and organic power, built through prior marketing efforts, as key to their current standing. Sure, TODAY, it doesn’t h…

How do you determine a reputable agency though? I worked next desk to people running a small ad agency. Because we shared office (and I found them an intern), I got a very good look at how they're working. What I've seen can be summarized as: people who have zero clue or interest in statistics writing "reports", with "graphs" they don't even understand beyond "pointing up = good", proving positive ROI to customers -…

Have you ever engaged with the large advertizing holding companies? They have teams of HIGHLY acomplished data scientists, boutique vendors for specific niches etc. Even if you don't pay for it there will be some people skilled at statistics looking at reports. If you pay for it, there will be data scientists doing analysis.

The large ad firms deliver a very good product but it usually isn't cheap.