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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

#781

Post by TLightful »

soared wrote: post #99
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 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…

>> The idea that no one actually checked if this system works is simply not possible.

Have definitely heard that one before. No disrespect.

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

#782

Post by pfranz »

drevil-v2 wrote: post #772
roenxi wrote: post #706

Earlier quoted context omitted.

Prefacing this with an acceptance both that HN culturally has US management principles and that I've got no idea how to run a business... Why is it an initial assumption that customer acquisition and ad spend are linked short or even medium term? That doesn't seem right. When I see an ad for washing machines it doesn't make me run out and buy a washing machine. It gets me familiar with Samsung the brand so in 6-12 mo…

Well then it becomes a question of attribution. How do you with a finite amount of dollars to spend on advertising know if you are getting your money's worth when you cannot connect a dollar spent on ad with incoming revenue? Sure in broad strokes you are probably right that brand awareness has ROI positive in the long term. But then why would you buy targeted advertising vs a giant billboard on the main road?

This quote is over 100 years old, “Half the money I spend on advertising is wasted; the trouble is I don't know which half.”

To more specifically answer your question; I imagine they have some sort of strategy with advertising. A billboard campaign might work. I always see Barracuda ads in airports, but nowhere else. Soap operas are named because soap and consumer products advertised to homemakers during the day. Even when using a broad brush you look for the best use of your money and target your audience.

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

#783

Post by zapdrive »

diarrhea wrote: post #745

This is now at 700 comments, and no one is talking about the math in the Twitter "thread". Found no mention in the Twitter replies either. Is it just me or is the math hilariously off? [0]: "10% of $150M is $15M". Correct, but do we need a screenshot of a calculator for that, let alone Google? (why do people rely on an internet connection and Google for this?) [1]: Talking about "2/3", but putting in "0.75". So which…

Lol, women and maths don't work together. In her head 2/3 = 75%, because she never actually tried to understand fractions and only memorized them. Women are good at memorizing, not at understanding.

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

#784

Post by avar »

mumblemumble wrote: post #140
soared wrote: post #99

Earlier 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…

The trick isn't figuring out whether advertising in general influences people's behavior. The trick is in figuring out if any particular advertising campaign generated more profit than it cost to run. Also, there's one alternative that's often forgotten in these discussions: Perhaps game theory is at play. It may be, for example, that, across entire industries, advertising costs more money than it's worth. But that e…

> IOW, just like in the standard prisoner's dilemma, choosing to act is less about increasing your potential gains than it is about limiting your potential losses.

You seem to be assuming that the potential gains are limited to current players of the game in this comparison.

It's possible that Coke, Pepsi etc. are all losing more money on ads than they're gaining in market share against their current competitors and in increased sales. But that doesn't begin to address the question of whether advertising is a net loss.

For one, the advertising also serves as a collective moat against new competitors, which could enter the market and eat up both Coke and Pepsi's market share. Maybe their biggest gain from it is that a bankrupt soda company from the 80s didn't replace them, and that a similar company today wouldn't have room to enter the market.

It also doesn't account for more complex effects like a net increase in sales for all companies in that market. E.g. maybe Rolex, TAG Heuer etc. all benefit in the long term from expensive watches being seen as fashion accessories.

If Rolex stopped their advertising spend one month and saw little immediate change, then TAG Heuer etc. might follow suit. But both might only experience the real loss years later as "luxury watches = must buy" faded from the psyche of their current and potential customers.

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

#785

Post by TimSchumann »

zpeti wrote: post #752
hn_throwaway_99 wrote: post #612

Earlier quoted context omitted.

If anything, FB ads were worse than useless for my business, all they attracted was 90% fraud. Looking at what business Ozonetel is in (i.e. sales are directed towards business owners), I'm not suprised FB ads were also worthless for you. I get the sense FB ads are really only good for things a consumer might impulse buy (e.g. clothing, games, small gifts, etc.) but anything where the user is probably going to do som…

Reading this thread I really start to feel people don't understand what fraud is. You shouldn't be calling it fraud when in the next paragraph you say that FB does work for impulse buys and not "ozonetel" Just because your ads didn't convert, or 90% of the traffic you buy didn't convert, doesn't make it fraud. Fraud is malice, with the intention to defraud someone and not deliver what you promise, with intent. This i…

> You shouldn't be calling it fraud when in the next paragraph you say that FB does work for impulse buys and not "ozonetel"

I don’t believe they were saying the adds themselves were fraud, merely that they had a higher than average propensity to attract fraudulent customers.

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

#786

Post by [deleted] »

diarrhea wrote: post #745

This is now at 700 comments, and no one is talking about the math in the Twitter "thread". Found no mention in the Twitter replies either. Is it just me or is the math hilariously off? [0]: "10% of $150M is $15M". Correct, but do we need a screenshot of a calculator for that, let alone Google? (why do people rely on an internet connection and Google for this?) [1]: Talking about "2/3", but putting in "0.75". So which…

[deleted]

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

#787

Post by kleiba »

V_9 wrote: post #759
diarrhea wrote: post #745

This is now at 700 comments, and no one is talking about the math in the Twitter "thread". Found no mention in the Twitter replies either. Is it just me or is the math hilariously off? [0]: "10% of $150M is $15M". Correct, but do we need a screenshot of a calculator for that, let alone Google? (why do people rely on an internet connection and Google for this?) [1]: Talking about "2/3", but putting in "0.75". So which…

Yes, but marketers don't really care about math. Only about the numbers! You would expect a few hiccups and a steep learning curve when the product they are trying to buy is a bid for visibility on insanely complex networks of platforms using said rocket science to guess where one's mind is at. Disclaimer: worked years in the space on the topic of performance, only one time ever have i seen an AB test correctly run a…

Yes, but marketers don't really care about math. Only about the numbers!

This is hilarious.

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

#788

Post by danielscrubs »

ljm wrote: post #777
diarrhea wrote: post #745

This is now at 700 comments, and no one is talking about the math in the Twitter "thread". Found no mention in the Twitter replies either. Is it just me or is the math hilariously off? [0]: "10% of $150M is $15M". Correct, but do we need a screenshot of a calculator for that, let alone Google? (why do people rely on an internet connection and Google for this?) [1]: Talking about "2/3", but putting in "0.75". So which…

As for the calculator screenshot, that kind of stuff feels like a consequence of having 'show your working' drilled into your head at school. Which is great to show your teacher that you understood the question and didn't plug it into a calculator, but unnecessary later on.

Send it to your university professor and see how it goes.

You can’t really blame academia for this one.

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

#790

Post by LoSboccacc »

Aeolun wrote: post #339
megablast wrote: post #272

Earlier quoted context omitted.

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

If you are sinking $100M in, I sure hope it’s having some effect.

You're also bidding for eyeballs. An established player might want to scoop up the most relevant keywords forcing competitors to at least price match, effectively starving them either of views or cash
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