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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

#701

Post by samstave »

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-…

until you realize that ads are meant to make FB and Google rich, not you, you're going to have a bad quarter.

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

#702

Post by sigmaml »

As with almost everything in life, there are multiple factors to take into account.

We recently ran several drip campaigns, as well as a few fire-and-forget campaigns, together with corresponding ads through Google. There was a marked difference in customer uptake before and after the ads. We have also pretty regularly received feedback on our ads.

In fact, that is what we have observed over the years. Customers are conscious of what the ads say, where they get placed, and - usually - can crosscheck the quality of the ad with that of the product.

In my experience, it is rash to generalise and say that ads are not useful.

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

#703

Post by kalyanganjam »

nuclearnice1 wrote: post #571
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…

> searching for Ozonetel on Google. There will be six competitor ads and then our website will show up :) Tried it. One ad. From ozontel.com

All results related to Ozonetel and zero ads

https://imgur.com/a/q70nShf

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

#704

Post by Dylan16807 »

amarghose wrote: post #686
rlayton2 wrote: post #649

Earlier quoted context omitted.

I'd argue it is sneaky to put the competitor's name first, as most people will click quickly to move on to the website.

Disagree in this specific situation (generally yes) - "XYZ alternative" is about as clear language as you can get. Nothing sneaky about it.

People click through search results really fast. "XYZ alternative" would be much more acceptable if it came after the real name, but putting "XYZ" as the very first word is guaranteed to cause confusion.

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

#705

Post by Dylan16807 »

pb7 wrote: post #564
aaronmdjones wrote: post #552

Earlier quoted context omitted.

What? I didn't ask for anything for free. I'm just telling you what happens. Normal people don't remember domain names. I'd hazard a guess that half of them don't even know what those are. If they want to get anywhere , they put it into a search engine, even if it's something ridiculously common like Wikipedia.

That’s fine. But if you want to use a service, you have to agree to the service’s terms. That includes ads that appear before results and competitors bidding on ads for any search terms. That’s just how it works in a rational world. It doesn’t really matter the reason you had to use the service. Otherwise, why is Grammarly a billion dollar company? People are bad at grammar, let them live! And use the service for fre…

That's how it works under certain market conditions.

Calling out flaws, or wanting a change, doesn't mean people are demanding the strawman you've constructed of "exactly like you get today but free".

Just as an example, the people at the top of a few organizations could flip a switch and make all the major browsers default to nonprofit search engines.

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

#706

Post by roenxi »

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…

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 months when I buy a washing machine I am familiar with Samsung and buy their brand. Or it means that if my washing machine starts to sputter I'm more confident knowing where to go to buy a new one.

It doesn't seem enough to stop advertising for 6 months and claim no damage is being done. It seems well understood that repeated exposure to a brand has a powerful effect on humans.

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

#707

Post by Dylan16807 »

doopy1 wrote: post #155
mumblemumble wrote: post #140

Earlier quoted context omitted.

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…

Distilling it down into "any particular advertising campaign" is pretty myopic in this world. It's about strategy as a whole over decades. Not every ad campaign is to drive immediate sales or signups (direct response). Branding and awareness campaigns can take years to run, and these are ALL diligently measured at every stage. Losses do occur do to negligence, malice, and poor execution all the time, but the brands s…

No matter what time scale you pick, there's still a point where ad spending costs more than you benefit. As time passes, the boost from any campaign decays. For any particular person you only need to show them so many ads to maintain awareness.

> these are ALL diligently measured at every stage

Mmm. Sometimes. Sure, you can obsessively measure audience and sales numbers, but if you don't have any controls then it becomes nearly impossible to figure out how much of that came from ads and how much came from everything else in the entire world.

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

#708

Post by crakhamster01 »

baron_harkonnen wrote: post #690
crakhamster01 wrote: post #610

Earlier quoted context omitted.

> 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 cer…

> without any attempt to validate their investments. I've also worked in adtech, for quite a long time on all sides, and my experience is that far more companies do research to justify their ad spend not validate it. I have managed plenty of A/B tests in my day, each one claiming to show some improvement, 10%, 15% etc (some, as you said, showing no improvement). Even though these tests are often run "correctly", esse…

I agree that there a lot of (smaller) players in the ad tech space who are scamming companies out of money. And especially if you've been in this industry for a while, this practice was much more prevalent a decade ago.

I don't think your view is representative of how most F500 companies, or many of the new DTC brands, invest on major ad tech platforms though (FB/G/Snap/etc.). Experienced marketers try to measure metrics as close to core business KPIs as possible, and comparing ads based off of simple A/B tests is increasingly becoming a technique of the past. Measuring the incrementality of ad campaigns through long-term holdout groups gives companies a much more accurate read of their investment, while bringing higher statistical rigor as well. So rather than looking for cumulative increases on after advertising for a year, you could instead point to group A (who saw no ads) and see that group B (who saw ads) drove a 1.5x higher .

I'm not sure how you can say advertising is a scam when there are clear examples of popular brands that most likely wouldn't exist today without digital ads? Take Allbirds as an example. There are dozens of consumer shoe brands that are already in physical stores and have higher brand recognition; how can you argue that advertising didn't help them cut through the noise and grow their bottom line?

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

#709

Post by Dylan16807 »

mschuster91 wrote: post #392
TheOtherHobbes wrote: post #215

Earlier quoted context omitted.

Coca Cola sells water with flavouring and quite astonishing amounts of sugar. Apple sells nice devices made by what might as well be slave labour. Both are propped up - actually maintained - by huge and vastly expensive brand management strategies. The criticisms of individual campaigns here are missing the point. It's not about micro ad spend, but the perception of value and manipulation of behaviour created by the…

> Both are propped up - actually maintained - by huge and vastly expensive brand management strategies. In the case of Coca Cola, I agree - in the case of Apple, not at all . "Keyboardgate" aside, their products are vastly superior to the competition in build quality and life time. A typical Windows laptop is unusable after two, three years (almost all are made from plastic which breaks or looks extremely ugly rather…

> A typical Windows laptop is unusable after two, three years (almost all are made from plastic which breaks or looks extremely ugly rather sooner than later), and has next to no resale value while in contrast even old cheesegrater Mac Pro's fetch many hundreds of dollars today.

By "typical windows laptop" do you mean a cheap model where the macbook equivalent is buying nothing at all? Of course it's going to be lacking in that case.

Well-made windows laptops exist, and hold plenty of value. But you have to pay for that, no matter what brand you choose.

> tracking bullshit

Like checking signing certificates by pinging servers almost every time you run a program?

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

#710

Post by bitcharmer »

roenxi wrote: post #706
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…

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…

Don't know how much of that is true as I am not a practitioner but when I was studying marketing we were taught this (continuous brand awareness reinforcement) only works for FMCG.
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