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

#601

Post by dang » Mon, Jan 04, 2021, 2:48 AM UTC

bigdict wrote: post #561

dang wrote: post #525

Earlier quoted context omitted.

Yes, this was just a standard follow-up [1] and we did the standard counter-follow-up, which is to merge the threads. [1] https://hn.algolia.com/?query=follow-up%20by%3Adang&dateRang...

Hi dang, I'm wondering is there a list of HN phenomena that you've noticed over the years? Examples would be: 1. follow-up submissions 2. an initial wave of critical comments followed by a wave of apologist comments 3. first page of comments occupied by a single top level comment with lots of descendants (you often post to draw attention to other pages of comments in these cases)

There's no systematic list but I use links to HN Search (like in the GP) to refer to such patterns. There must be a hundred such categories by now. Eventually I may try to compile them into something more standardized.

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

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Post by nl » Mon, Jan 04, 2021, 2:52 AM UTC

swiley wrote: post #576

nutanc wrote: post #522

We did a similar kind of experiment some time back and found both FB ads and Google ads were doing jack shit for us. Google was better. FB ads were absolutely useless. So we stopped our ad spend. We observed no change in our customer acquisition. Another way these ad engines extract money out of you is by allowing competitors to bid for your brand name keyword. Try searching for Ozonetel on Google. There will be six…

We're probably not in your target market but most people here probably know anything marked with "ad" is very likely to contain malware and probably won't click it even if they think it goes where they want.

This isn't true. Google search ads are rarely malicious - Google does a pretty good screening them.

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

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Post by vardhanw » Mon, Jan 04, 2021, 2:56 AM UTC

Two related articles I read this year: [1] is an account of a deeper analysis of this problem, [2] is AirBnB's experience with cutting off spending on online advertising during the pandemic. The conclusion is the same, but what is important is the analysis of the reasons for continuing ad funding in orgs which has more to do with the marketing executive's psychology and need for feeling important than any objective analysis of the effectiveness of the campaigns.

[1] https://thecorrespondent.com/100/the-new-dot-com-bubble-is-h...

[2] https://www.theinformation.com/articles/airbnbs-new-strategy...

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

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Post by legitster » Mon, Jan 04, 2021, 3:01 AM UTC

jedberg wrote: post #335

legitster wrote: post #283

Earlier quoted context omitted.

I work in digital marketing and this episode made me want to tear my ears off. First of all, they didn't differentiate between display or PPC advertising. PPC you only pay if the user actually engaged with the ad. Nearly all of the anecdotes they used where about online display advertising - a known crock. And we absolutely run experiments all the time! In fact, we tie our ad spend directly to conversions. If anythin…

But the experiments you run pit one ad type or channel against another. Have you ever run any experiments comparing ads to no ads?

Absolutely. You can give a campaign its own website or URL if you want to test something like the effect of a specific billboard or radio ad.

Or you can do the equivalent of an excess mortality study but for client acquisition or product sales. You take something like the month of January and you say "this is what we expect for web traffic given our standard traffic for that month, and extrapolate it with your average web activity growth". And so long as you have "clean" months to compare it to (with no ads running), you can get a pretty decent back of envelope about what your ad campaign did.

Like, there's so many different ways you can cut the apple, it's patently ridiculous they made those claims.

To give them a bit of credit, there's something to be said for there being a lot of bad ad spending out there. But like the stock market, there's a tacit understanding that it's more or less efficient.

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

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Post by kumarvvr » Mon, Jan 04, 2021, 3:01 AM UTC

Nextgrid wrote: post #30

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-…

> No one is willing to run the experiments necessary The people that would have the power to run this experiment have their entire careers depending on things staying as-is. Running the experiment carries a significant risk of exposing that the advertising operations they're responsible for provide much less ROI than they pretend it does. The unwillingness of anyone to run such an experiment is already an answer. Why…

Yep. Like the old adage goes, You cant make a man understand something, if his job depends on him not understanding it.

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

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Post by chevman » Mon, Jan 04, 2021, 3:12 AM UTC

soared wrote: post #124

This is really just Uber failing to effectively manage their ad spend. Somebody at Uber is not doing a core function of their job if this can happen. A person at Uber is responsible for ad spend, moving it between vendors, checking CPAs, etc.

Yeah, first thing I thought as well when I read this.

Dude has $150MM annual ad budget and has never audited his vendors?

Either total incompetence, or something shady was going on.

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

#607

Post by ogre_codes » Mon, Jan 04, 2021, 3:12 AM UTC

Nextgrid wrote: post #30

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-…

> No one is willing to run the experiments necessary The people that would have the power to run this experiment have their entire careers depending on things staying as-is. Running the experiment carries a significant risk of exposing that the advertising operations they're responsible for provide much less ROI than they pretend it does. The unwillingness of anyone to run such an experiment is already an answer. Why…

> The unwillingness of anyone to run such an experiment is already an answer. Why wouldn't someone jump at an opportunity to prove the thing/service they provide actually works, unless they were unsure about it themselves?

Or they have run the experiment and the results haven't lines up with their own personal biases so they were discarded.

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

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Post by tobr » Mon, Jan 04, 2021, 3:14 AM UTC

pb7 wrote: post #574

nutanc wrote: post #570

Earlier quoted context omitted.

"if I search for "apple", what should the first result be? Wikipedia or Apple.com?" Apple is a common noun in the English language. So I would assume the first result to be Wikipedia or some site which gives the best details about apples. The second result could be Apple.com or whoever has applied for the keyword.

Thank you for answering. But that is inconsistent with what you said about your brand appearing first before any ads. In Apple’s case, are competitors allowed to bid on this keyword, since it is a common noun in English? Why or why not? I assume your brand is not a common word in the English language but what if it is in another language? As you can see, I can continue muddying the waters until it’s not so trivial to…

Now you’re comparing apples and Ozonetels. Ozonetel is not a common noun.

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

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Post by hn_throwaway_99 » Mon, Jan 04, 2021, 3:19 AM UTC

notatoad wrote: post #586

Pxtl wrote: post #562

Earlier quoted context omitted.

I'm surprised that's legal, since they're literally referencing somebody else's trademark.

There's nothing illegal about referencing somebody else's trademark as long as you're using it to talk about their product. Having a trademark doesn't forbid your competitors from talking about you.

What I think should be made illegal is that Google (and others) is essentially collecting another toll even when users enter in the brand name of the target business in the first place. That is:

1. User types CompanyFoo (whose real URL is www.companyfoo.com) into their address bar, which lands them on Google (because Google owns Chrome and pays billions for the privilege on other browsers).

2. Since Google will sell this keywords to others, many businesses always bid on their own brand name to ensure it comes up first.

3. Thus, an ad for CompanyFoo shows up first, even though www.companyfoo.com is the first search result, so when user clicks on the CompanyFoo ad Google takes its cut. Again, this is also because Google has done as much as possible to make ads as visually similar to SEO results as possible - just the teeny 'ad' banner, compare to the big yellow box of early Google.

I don't have as much objection for other companies buying branded keywords, but the way Google has set up things up they are taking their cut from everyone even when they are giving very little value.

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

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Post by crakhamster01 » Mon, Jan 04, 2021, 3:19 AM 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-…

> No one can actually prove it has any ROI at all. No one is willing to run the experiments necessary.

This is entirely false. I work in adtech, and almost all companies run experiments in order to optimize their ad spend (everything from Ad A vs Ad B, to Ad vs No Ad, to Channel A vs Channel B, and more).

This isn't to say that advertising always produces ROI. Quite often, experiments will be run that will show a certain strategy isn't performing well, and the company will adjust accordingly. It's incredibly naïve to think that companies are flushing half a trillion dollars a year down the toilet on advertising without any attempt to validate their investments.