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Advertisers scramble as ‘non-human traffic’ eats up online budgets

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Re: Advertisers scramble as ‘non-human traffic’ eats up online budgets

#61

Post by hyperpape »

eli wrote: post #37
arbuge wrote: post #20

I've been in the online advertising world for 10 years and it still befuddles me to see that most ad dollars still haven't switched to cost-per-action (CPA), i.e. only paying for actual conversions. One big benefit of advertising online after all is that tracking conversions and their referrers is much easier than with offline.

CPA simply doesn't make sense for all ad campaigns. When Lexus buys ads on a financial news site it's for branding -- they want to get their logo in front of their target demographic. The ads aren't optimized for clicks or leads -- sometimes there isn't even a clear call to action.

Yup, but then why bother with CPM? Just buy display ads for a fixed price in publications they believe their customers might read. Sure, it's not an improvement over what they did in the 50s but they don't have to worry about fraud.

Re: Advertisers scramble as ‘non-human traffic’ eats up online budgets

#62

Post by meric »

bthornbury wrote: post #12

I've wondered about this before if advertising was just designed to be a big negative sum game for advertisers. Interestingly if these same bots were capable of making real purchases and were run by ad companies this behavior may be sustainable because some people are making money. Almost like wall street.

Assuming an average consumer will spend a constant number of dollars per year - advertising would indeed be a big negative sum for advertisers. Advertisers would make the same number of dollars, except having had to spend on advertising. The problem is those who do not advertise generally lose out to those who do.

Re: Advertisers scramble as ‘non-human traffic’ eats up online budgets

#63

Post by Animats »

So now 25% to 50% of impressions go to ad bots. It's known that most ad clicks from about 10% of human users, who will click on anything but buy little.

The real winner in this is Amazon. Amazon doesn't pay anybody when someone clicks on a product listing. They have to buy. Same for eBay. So there's no point in 'bots clicking on those sites.

Online ad rates have been dropping for some time now. Most of the ads run by Google Adsense (the ones on third party sites) are there because Google pushes advertisers hard to use that feature. Most of the conversions from Google Ads come from the ones on search results, which are displayed when the user is looking for something. Those are useful. Most other forms of advertising are interruptions for users interested in something else.

The classic tactic ad-based companies try as ad prices drop is increasing the ad density. That's called "pulling a Myspace". It didn't work for Myspace, which tanked. Twitter seems to be headed that way - usage up, profits not too good.

The way this is going, online advertising is going to have the conversion (to a sale) rate of spam - one in thousands.

Re: Advertisers scramble as ‘non-human traffic’ eats up online budgets

#66

Post by cpeterso »

Silhouette wrote: post #50
roymurdock wrote: post #49

Advertising in its current form is broken. I was recently in a class where we performed a case study on Google. The professor asked if anyone had ever clicked on an ad. One kid out of 60 had clicked on ad for cheap protein supplements, but hadn't bought any. Everyone else scoffed, pointed out their use of AdBlock, and cited their gullible parents as the only people they knew who might ever possibly accidentally click…

Everyone else scoffed, pointed out their use of AdBlock If your entire class was running AdBlock, then your sample is far from representative of the general population. There are two ad models that work in my opinion The thing is, opinions don't matter in this game, facts do. Do you really think major brands like Coca Cola or McDonalds or Ford spend such astronomical sums of money on advertising without being pretty…

> If your entire class was running AdBlock, then your sample is far from representative of the general population.

Indeed, Adblock Plus is only installed by ~7% of Firefox users:

https://addons.mozilla.org/en-US/firefox/compatibility/

Re: Advertisers scramble as ‘non-human traffic’ eats up online budgets

#67

Post by jsonne »

roymurdock wrote: post #49

Advertising in its current form is broken. I was recently in a class where we performed a case study on Google. The professor asked if anyone had ever clicked on an ad. One kid out of 60 had clicked on ad for cheap protein supplements, but hadn't bought any. Everyone else scoffed, pointed out their use of AdBlock, and cited their gullible parents as the only people they knew who might ever possibly accidentally click…

It most certainly isn't. I think there's a bias on HackerNews to default to hating on ads, but they can be very powerful. I'm certainly biased because I do it for a living, and the evidence I can offer is certainly anecdotal but I've run ROI positive campaigns based entirely off facebook and twitter ads. In fact I've done advertising for a $1,000,000+ grossing product where 98% of downloads could be directly contributed to an ad we ran while remaining ROI positive.

I don't entirely dismiss your point though. I think the large scale buying of billions of impressions is certainly broken. Big advertising agencies have taken to just throwing tons of ops people at the problem.

I think the real shift, and the pioneering ways forward are going to be a combination of social ads that are highly segmented, and then what I call "digital experiential" This: http://sortieenmer.com/ is a good example of what I mean.

Basically, buying banner ads really efficiently aren't enough anymore. We need to be creative again and be better about segmenting our audiences to make ads relevant again.

Re: Advertisers scramble as ‘non-human traffic’ eats up online budgets

#68

Post by klipt »

wernercolangelo wrote: post #9
arbitrage wrote: post #5

Earlier quoted context omitted.

William Gibson could probably give you some ideas on what that says about us. He started writing about this fictionally decades ago.

Or Stanislaw Lem

Or Douglas Adams in the Dirk Gently books.

Re: Advertisers scramble as ‘non-human traffic’ eats up online budgets

#70

Post by jsonne »

mianos wrote: post #56
tn13 wrote: post #36

This is a problem I have seen first hand. But this is not really as big a problem as it is made out to be. The real issue here is that it is hard to predict of the given impression is a bot impression or a genuine impression. As a consequence any CPM based dealing is difficult. Difficult only means falling CPMs. That is what I have observed. The advertisers will not have to put in more efforts to measure conversions…

I am also working in ad yield analytics, so while I wait for a DFP report to run, I'll also say, it's also in the network's interest to address this issue. In the meantime we'll just see more CPA line items and a drop in price for CPD and CPM. Being an auction, I'm sure Appnexus already sees this. When the issue is addressed we'll see a rise in CPM that reflects the increase in value with less bots. There is money in…

I'm in advertising too. What I'm really hoping comes out of this is greater transparency in inventory. Give me greater control over my blacklist and I'll be a lot happier.
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