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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

#501

Post by lasc4r »

reissbaker wrote: post #497
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.

I think the implication here is "that honestly doesn't seem that important" because the expectation is that the number of people who would find you anyway would be a small number compared to a well-run ad campaign, at least over timeframes startups care about. Having worked with a decent number of small teams without a lot of brand recognition, ads bring in a lot of customers: it was pretty obvious in our metrics whe…

>One could argue that advertising for large brands with name recognition could be less valuable.

It is without a doubt, and this is what the Freakonomics advertising episodes are mostly about.

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

#502

Post by aaron695 »

pnw_hazor wrote: post #128
mumblemumble wrote: post #94

Earlier 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.

> 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.

What safe-harbor carve-out existed 30 years ago for advertising that another industry might have wanted something similar on?

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

#503

Post by reissbaker »

lasc4r wrote: post #501
reissbaker wrote: post #497

Earlier quoted context omitted.

I think the implication here is "that honestly doesn't seem that important" because the expectation is that the number of people who would find you anyway would be a small number compared to a well-run ad campaign, at least over timeframes startups care about. Having worked with a decent number of small teams without a lot of brand recognition, ads bring in a lot of customers: it was pretty obvious in our metrics whe…

>One could argue that advertising for large brands with name recognition could be less valuable. It is without a doubt, and this is what the Freakonomics advertising episodes are mostly about.

Yeah, I wrote that badly. It's easy for me to believe they're less valuable. I really meant "One could argue that they're useless, but that seems hard to believe in a competitive market."

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

#504

Post by PaulDavisThe1st »

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…

Depends on the timeline. If for financial (or other) reasons, they need to "reach the audience ASAP", then sure, advertising is likely to be a good or even required move.

But if they want to exploit a more organic growth curve, and are in a financial position to do so, then advertising isn't so useful.

Ardour is a cross-platform DAW that has been around for 21 years. Every 2 minutes somewhere in the world, someone starts a version they got from us. We've never advertised.

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

#505

Post by lasc4r »

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.

Nice conspiracy theory bruh.

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

#506

Post by ErikVandeWater »

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.

People tend to upvote things related to what they've seen recently.

It is in fact much more likely that Google decreases the visibility of articles that in any way tarnish Alphabet's reputation.

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

#507

Post by aerosmile »

SilasX wrote: post #494
aerosmile wrote: post #464

Earlier quoted context omitted.

Only because the head of marketing realized it would expose his past misjudgments - not because he didn't realize it would actually be a good thing for the company. You'll see this type of behavior in every department - people trying to cover up their mistakes.

Wait, so their marketers are unwilling to do anything that would reveal ad ineffectiveness, and you consider that an argument in favor of the claim that ads are effective (the topic at this point in the thread)? Like, you take that as a signal that marketers would converge on effective ads?

My point is that we have to differentiate between bad employees and the overall effectiveness of ads.

The latter is all about incrementality. When you adjust for it, you get the true effectiveness of ads. In some instances, the incrementality will be significant, in others it won't. It looks like that in Uber's case, the incrementality was low. Btw, if you're not familiar with this term, please look it up - there's a ton of literature on it: https://www.adroll.com/blog/marketing-analytics/beginners-gu...

Which brings me to the point about bad employees - marketers who are not adjusting their performance measurement based on incrementality should be fired (and it certainly looks like this was not being done at Uber at that time).

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

#508

Post by offtop5 »

Nextgrid wrote: post #445
mttddd wrote: post #438

Earlier quoted context omitted.

Ya anecdotal for sure but a ton of my friends bought their significant others some new fangled thing they only heard about because they saw it on Instagram. HN loves to bash marketing (and FB/google) but it has never been easier to spin up your own shoe company and easily advertise and get customers (e.g, allbirds).

I've also seen and personally know people who bought crap off Facebook ads and ended up either being scammed or with a product below what the ad promised.

For me I've been very happy with my Facebook purchases

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

#509

Post by jrumbut »

MichaelMoser123 wrote: post #500
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…

i usually get ads for things that i just bought. That means they are very good at snooping, on the other hand if I just bought a TV set then that doesn't mean that i would need another one soon. Funny that Goole/Facebook currently don't seem to be running ads for complements of products too often; Amazon is better at that (if you bought this book, then you might also want this one).

It seems like we've been talking about this so long that a complementary product feature would be standard everywhere even if it didn't work.

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

#510

Post by KONAir »

dylan604 wrote: post #458
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.

> it might appear like there's a coordinated takedown of ad tech companies going on. Oh please let it be so, even though it's just a wild ass guess. Ad "tech" has ruined the internet (only slightly hyperbolic). Oh to be able to recover the "innocence" of the late 90s internet. Maybe I should just stop browsing so I can spend more time yelling at the kids to get of my lawn

I am at a loss to this '90s innocent internet. It scared me into using adblockers for over 2 decades (which coincidentally makes the article and this whole thread completely alien to me).
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