
The advertising industry has been living a lie - NN88
http://www.businessinsider.com/the-advertising-industry-has-been-living-a-lie-2017-10
======
redditadvthrow1
I spend $5m a year on programmatic ads, so I think I can answer the author's
questions.

> What made you think advertising on a few hundred thousand sites many any
> sense it the first place?

I'm intending to reach millions of people with my ads. Those millions of
people visit a few hundred thousand sites. Why would I only buy ads on a few
sites. Big brands buy tv ads and billboards on thousands of shows, whats the
difference? Buying on many sites also allows me to reach a very niche audience
that otherwise you could never reach (or it would be 10x as expensive).

> How much is being wasted on fraud protection that doesn't do the job?

This is a good question and I don't have an answer. I spend money on fraud/bot
protection and can't always verify if it works. But as long as my ads are
producing results and have a good ROI or the client is happy, I don't even
need to know what the answer is.

> Why does every single publisher or ad tech company boast of working with
> three or four anti-fraud vendors at once?

Digital marketing as an industry moves super super fast. At least one of those
four anti-fraud vendors will pivot in the next year, and another will focus on
something niche like viewability. Having multiple vendors is necessary, and
there isn't really a downside. The switching costs for me between two vendors
is literally unticking one check box, and ticking another.

I'm not familair with the author, but it honestly doesn't seem like he
understands advertising. Are you complaining about the use of third party data
(but no mention of privacy?), that advertisers are lazy (personal
attacks..okay. The whole industry is lazy?), that advertisers buy ads on and
support small websites, or are you just feeding on the ever-popular disdain
for advertising?

There are no doubt problems in the industry, but if you want to write about it
you'll need to make a claim and support it with data. If you think 3rd party
data doesn't work, or allowing ads on lots of sites doesn't work then claim
that and prove it.

~~~
diegoperini
I support almost all the criticism you form except the point on comsumers' not
needing to know if fraud protection works or not.

------
hn_throwaway_99
> But that's not really how people consume media. Most people don't spend time
> on thousands of websites.

I found it difficult to read past that bullet point. It's such an obviously
stupid mischaracterization of what "the long tail" is that it makes the rest
of the arguments suspect.

~~~
gt_
I am not familiar with the "long tail" book or the particular internet theory,
but I used to work for a company which owned an actual windsurfing website.
They only sold advertising to what they called "endemic" advertisers, which
means they are of the industry that supports the niche; in this case
windsurfing. They dealt directly with the advertisers. The reasoning was that
"non-endemic" ads would sour their allegiance with the niche audience they
served. I would be interested in some research on this theory.

~~~
rjbwork
It may be a reasonable theory. But there are lots of ancillary industries that
help support the niche - boat manufacturers, plastics/cloth companies,
clothing and misc gear companies that are native to windsurfing (such as
brands like Revive, Vans, Sector 9, etc are to skateboarding), and dozens of
other related brands. You may also be hurting your income if you are only
doing direct buys/run-of-site buys, since you don't really know what the
market value of placements on your site are, you only know what the few brands
you consider "endemic" value your site for.

I could likely come up with a few other reasons given the time, but I think
this makes the point decently.

EDIT: Also, remember the incentives of the many mainstream high-traffic sites
who are pushing this narrative about advertising.

------
mft_
What a terribly _frustrating_ article.

1\. It doesn't satisfactorily make the case that targeting the audience rather
than the topic-related websites doesn't work or make sense. (I'd argue that a
deeper problem is that most simple online ads just don't work, for most
people. And otherwise, if you're actually susceptible to online advertising,
then actually getting served ads tightly targeted to your interests does make
sense.)

2\. I'm not sure that the data used (in support) supports the author's case
that people stick to a small number of their favourite websites; rather, it
looks like it shows that popular websites are popular. (Hard to be certain
without examining the market research questions though.)

3\. It then takes a tangent to show that lots of ad exchanges are unreliable;
this may indeed be true, but is totally unrelated to the original premise.

~~~
watwut
Judging from what kind of targeted advertising I get, pretty much any method
would be better. Topic method would at least made sites I visit less annoying.
I am totally wanting to investigate anti bed wetting method (or other kid
related targeted ad) to buy when I am visiting sci-fi web or gaming web page
page or ... get the idea.

Judging from experience if people I talked about it with causually, I am not
alone nor special.

~~~
KGIII
Absolutely! In the past year, I've been doing more computing on a tablet and I
don't block ads on the tablet. I am logged in to a variety of sites and make
zero effort to hide my activity.

I started paying attention to the ads about six months ago, because I'd manage
to notice how poorly targeted they were when I did see them. They are
terrible.

I think the best targeted ads have been from a company that sells barn doors.
Really, they are in fact selling barn doors online. That's a very compelling
ad for me. Except, you know, I already have doors for the barns. I am not
actually in the market for new barn doors.

I don't actually need a bra, free for thirty days. I don't have breasts. The
missus doesn't use my tablet and actually has her own network connection as I
tend to saturate mine sharing Linux isos and stuff like that.

I don't need a used car. I have more than adequate automotive sources already.
I'd buy a used car, but it would not be a Toyota that has just come off lease.
Maybe try selling me a 900S Turbo from 1992?

I don't have any major medical problems, trying to sell me drugs is pretty
silly. I don't need insurance, I'm already well insured. I'm not concerned
about paying the least amount for insurance, I'm concerned with the best
coverage and service. An ad for, "We are dirt cheep but just shoot you if
you're involved in an accident insurance" is not very interesting.

They have vast amounts of information on me. Why not try to sell me a new
plow? I'm kinda in the market for one. Why not something to do with hunting,
fishing, gardening, or food preservation? Not one ad has has any of those
things. They know I own a Kubota, why not advertise some new implements?

I don't get it... I'll buy stuff. I'm more than happy to buy stuff. I love
buying stuff. I buy stuff I don't need - all the damned time. Yet, literally
no ads have compelled me to click and make a purchase. I have clicked, I just
haven't found anything worth buying. I've never bought anything from a placed
Internet ad, except when I was searching specifically for that product.

Something is broken.

~~~
dwild
Have you tried to go on your ads preference from Google Ads?

I never had bad targeted ad but I did update that page maybe 3 times in the
past decade, that's maybe why.

~~~
KGIII
I have not. I will ponder the implications. I kind of want to see what it does
without my prompting it.

------
mjevans
I honestly can't connect with the kind of people that ads (fully) work on.

The absolute /best/ case for an ad is that it might remind me that there's
some consumable item that I buy every so often (food/etc) and that I either
have some I can consume or that I'm getting low and might want to restock.

For example, an ad for a restaurant I already like might remind me of the
positive prior experiences and encourage me to return sooner for more.

However, I'd probably go back there / buy more anyway without the ad. Is it
really an /efficient/ use of their money? Couldn't they just make their
products more attractive by cutting the costs (not spend on marketing)?

Other ads might be for products I don't already get/buy... those are probably
most effective as 'suggested' results near the top of searches when I'm
looking for a specific product or in a specific topic of inquiry that seems
related to seeking a solution.

------
Gustomaximus
This is not new news. Suprised its getting up votes.

I would say most marketers are well aware of this. We try and measure down
funnel. You learn who are the successful networks and who are not. Sure a
percentage will be fraud but you should know your channel ROIs and be
maximising that.

This article may as well be written that workers only work productly for 5
hours of thw day. Or 25% of food goes to waste.

There is always wadte. A good marketer will reduce this. And thwir claim about
marketers not look at domains seems like hogwash to me. I and markwters around
me have looked at this in ever company I've been at. Maybe Ive had a rare
experience but I doubt this.

~~~
dwild
Exactly this!

Being able to track what happen with your view is probably one of the big
selling point with internet advertising. You can know precisely how effective
your ad campaign is and optimize that. Sure maybe there's fraud but if you
maximize your ROI, you will inherently minimize fraud.

------
avip
I find most of the claims in this (obviously PR driven) piece misleading.

Online marketers are aware of fraud. The common wisdom is to assume ~30% of
your budget went into fraud. Advertisers measure ROI, don't bother much to dig
into which form/shape fraud takes place, the tech details, or how to identify
or stop it. Because that's technically far from trivial. It's like a
restaurant assuming 15% loss on fresh supplies. You factor that in and as long
as you have a margin you're good to go.

~~~
baybal2
>Online marketers are aware of fraud. The common wisdom is to assume ~30% of
your budget went into fraud.

Common wisdom does not account for that some cash cow keyword/adnet
combination you can approach to 90% of traffic coming from bots, or
conversions being near nil even without clickfraud being involved, or for ad
nets having interest to actually go soft on clickfraud.

Whenever I worked in media agencies, I do see people running digital ads for
major brands (coke, nike, li ning, microsoft level) being at least moderately
competent in technicalities, yet I can't say that any of them ever approached
to even partial understanding of what a total "Wild West" is the online ads
industry today.

~~~
jack9
I'm deeply involved in digital advertising and I don't even understand what
you're trying to say, so maybe you could rephrase? At the very least, the
"common wisdom" number is suspect (a random lampshade). I've measured bot
traffic as high as 98% from quality news sites like the OCRegister.com

~~~
baybal2
I want to say that most online ads people don't get that "you can be losing
30% of your ad spending, but things can be dramatically worse and you will not
know it no matter how hard you try"

------
kurthr
I always figured we should put advertising on the currency of exchange...
seriously, just put what ever picture you want on an individual dollar bill
(or a $10/$20/$50/$100) for a price you pay to the Treasury for printing it in
volume. Different markets for different denominations and you could actually
even target specific areas based on the Atlanta vs Frisco printing locations.
The price of ads on a dollar bill could easily exceed the value of the
currency itself, because of the multiple transactions (even if it's only in
circulation for 21 months!) People would even buy them as collectors taking
the rare ones out of circulation.

Now, of course you could put advertising on your dynamic (image updating)
credit card so as you pull it out at the grocery store it reminds to get more
SnackyPoofs for your lovely little Cartman at home. Or perhaps we'll be
putting advertising on the blockchain so that they will mine, and we can get
transaction costs down!

~~~
suby
I would hope that there would be massive backlash if we as a country tried to
put advertising on our currency, because that's insane. It would be a fairly
fitting illustration of what's wrong with modern society, though.

~~~
sofaofthedamned
Brawndo would be the ideal thing to advertise on cash, how about it
Elon/Larry/Bill?

~~~
sogen
It’s got electrolytes

------
gamesbrainiac
I think the point that the article is trying to make is a lot less dramatic
than the title would suggest.

Basically, there has been a long standing assumption that, netizens in general
spend their time on a plethora of websites, and that instead of spending money
on specific sites, one should spend money on audiences. In other words,
advertise in accordance with a person's interests.

However, due to recent exploitation of this assumption by other fake sites,
and fake bot-generated visitors, this assumption has met some strong evidence
that would disprove it.

Could the advertisers simply get together and black list such advertising
agencies that sell fake niche sites with fake bot-generated views? Or is that
a naive view of things?

~~~
jack9
> this assumption has met some strong evidence that would disprove it.

There is no evidence either way. Behavioral targeting works to some extent,
e.g. retargeting. I visit Ford Fusion specs, later on Fox News a Ford Ad for a
different truck appears.

Detecting fraudulent sites is not only counter-productive for platforms (AOL
One is shockingly lenient to pump up their "reach" numbers), but sites as
well. Sites will pay for inflated automated traffic to consume advertising
budgets. The foxes are decided how to parse up the hens.

------
Hasz
The article is poorly done. That being said, I don't disagree with the
premise.

As I understand it, advertising is seen in terms of acquisition cost (and ROI
more broadly). If ROI is a positive, the campaign is a success.

However, this binary view is incredibly limited, and thus leaves significant
room for rent-seekers who add no real value to the process. These rent-seekers
will leach away value until it is at the minimum acceptable value. If the
(legitimate) advertising industry can cut out the fat, it stands to
significantly improve results for its clients. Until those clients demand
improvements, however, these costly changes will not be implemented and the
industry will continue on.

------
eccfcco15
This article leaves me with several questions: once a website is revealed to
be fraudulent, is there not a way for the advertisers to get their money back?
And are none of the advertisers suing the people behind the fraudulent
websites?

~~~
dexterdog
I wouldn't expect google or facebook to be cool with that since they both
benefit from the fraud as much as anybody.

------
bradknowles
IMO, the entire advertising industry is composed wholly and solely of lies.
That is the entire purpose for their existence.

So, one part of the advertising industry lies to another part, and we are all
supposed to be incensed by this?

------
sunsu
> Most people don't spend time on

> thousands of websites.

The author of this has absolutely no idea how modern advertising works.

------
feelin_googley
"'There is no basic internet knowledge among people funding the internet'"

