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It's crazy how many apologists there are for Big Web Advertising! So many commenters are giving the customer a hard time for realizing, "99% of my budget is sp

It's crazy how many apologists there are for Big Web Advertising! So many commenters are giving the customer a hard time for realizing, "99% of my budget is spent on zero value, i.e. fraud." The biggest lie the online advertising industry has sold is aggregate statistics. Of course a handful of traffic sources convert massively while the supermajority (99%) don't convert at all. Advertising intermediaries rely on the statistical mean to hide all the garbage in the gold. It should surprise no one that for the vast majority of customers, like Chase, conversion as a function of source is skewed. I suspect too many ad tech companies rely on the ignorance of their customers to make money. They monetize the basic math of "if it's more than break-even, it's working"—in other words, their objective is to take as much ad budget as possible while still delivering a profitable conversion for the customer. By simple math, ad tech uses garbage inventory until the customer's profit is close to but above zero. It works, and you'd have to be a real blowhard to believe that it's not how the ad tech ecosystem works. That ad-tech does this by laundering e-mail spam, blogspam and other forms of spam into Google AdWords: that's the real fraud. All those Googlers then go on to pretend like it's not happening. I mean, what 400,000 sites do you think Chase was advertising on? Ones that really have to do with banking? Or just ones that, by some idiotic metric, have a keyword that ".equals('banking')"? I would love for someone at Google's direct navigation ads (or whatever ridiculously obscuring name they're called now) to come out and say how "Nobody clicks twice [on spam ads] by accident." It's like they inhabit a make-believe universe. The ad exchanges aren't ignorant: they're facilitating the massive fraud of their own customers.

ckamin5 10y ago
> I mean, what 400,000 sites do you think Chase was advertising on? Ones that really have to do with banking? Or just ones that, by some idiotic metric, have a keyword that ".equals('banking')"? The reason a Chase ad ends up on 400K sites is not because all of those sites are contextually relevant, it's because of retargeting. A user goes to chase.com, gets pixeled, and then shown retargeting ads on what ever websites they happen to visit that are hooked up to the exchanges. This could be either a good or bad thing.
dkuebric 10y ago
It's hard to tell from the article, but I don't think there was any change in Chase's advertising spend. My interpretation is that they are spending the same amount, but restricting bidding to a whitelist of sites. If so, the fact that they don't see an impact in # of impressions means more about the ad exchange's bidding system and inelastic demand (or lack thereof) for inventory on those whitelisted sites. I don't think this has anything to do with fraud.
- danjc 10y ago
  Also entirely possible that the balance of the 400k websites account for a miniscule percentage of impressions.
  - AznHisoka 10y ago
    this. everyone else is arguing about a red herring. but 10 or 20 of those sites probably accounted for over 90% of the clicks.
  - Trundle 10y ago
    Yep, as far as I'm concerned this article is a non-event without data showing this isn't what happened. "Business slightly tweaks marketing expenses" just isn't as attractive and rant inducing.
    - bigtimeidiot 10y ago
      >Yep, as far as I'm concerned this article is a non-event without data showing this isn't what happened. What other things should the article show "hasn't happened"? That will be quite a big list. As the OP says, it's odd that people lean towards "everything is A-OK!". I guess there are many, many jobs that rely on the ad-tech bubble sustaining itself.
  - imarg 10y ago
    They essentially say so in the article. "Of the 400,000 web addresses JPMorgan’s ads showed up on in a recent 30-day period, said Ms. Lemkau, only 12,000, or 3 percent, led to activity beyond an impression."
stvswn 10y ago
Where to start? What makes you think that they reduced their spend by 99%? They simply limited their campaigns' targeting to a whitelist of 400 sites, there's not any indication that they were spending equal $ per placement. I'm not sure why you believe that aggregating statistics is some sort of lie -- in AdWords, advertisers are able to easily see the placement for each one of their clicks. It's not some big secret hidden from advertisers. You are also confusing why and how much advertisers care about the content of the sites. The site's content is only one signal as to the quality of an impression. It's a proxy for quality, because it's a good indication that a particular user might find the ad interesting and relevant. It's not as good of a signal as the characteristics of the user. Why would Chase be interested in only advertising on "banking" sites anyway? It's pretty silly to think that it's somehow a big scandal if the website content isn't directly connected to the business of the advertiser. Advertisers definitely don't want that. What they want is a quality user -- Chase wants someone who is actively shopping for banking services to see their ad everywhere, but they don't want to waste an impression on someone who isn't. If I were guessing, they were likely aggressively remarketing on the entire network, and now they're restricting to sites. In other words, they were following users across the entire internet, wherever they could find inventory, and now they'll just follow them to the most popular sites. You're conflating two issues -- brand safety and ad spam. The first is the relevant issue: "I don't care how good the user is, I can't have the NYT printing that my brand name showed up next to a terrorist recruitment video." You're talking about ad spam, or "you charged me for this click but it was fraud from the publisher." That's not at all what the story is about. You're jumping to a conclusion that the now excluded websites were fradulent to begin with. Do you find it unbelievable that there might be 400,000 legitimate websites in the set of available placements for Chase's ads, without spam? Why? You are mixing terms, Adwords isn't an exchange -- AdWords has inventory from owned-and-operated sites (Google, YouTube) and network partners (AdSense, AdMob, Google Display Network, etc.) AdWords doesn't sell any inventory from ad exchanges, it has its own network, particularly because it wants to maintain the quality of the placements. Spam is actively and aggressively policed. Again, that's not what the article is about -- none of the big tech co's have been doing much to prevent ads from showing against certain types of offensive content -- especially content like hate speech, fake news, etc., because it's really difficult to identify correctly at scale. The media and advertisers have started caring because it's the cultural moment we're in right now, I guess. Finally, it's not the case that "garbage inventory" is spread around, subsidized by the good stuff, in a money making scheme. Such a scheme wouldn't make sense anyway. High-spending, sophisticated advertisers know the conversion rate of the advertising, and they have a sense of the return on ad spend that they'd like. Cost-per-click is just a shallow metric in the market, if the real value wasn't there then demand would decrease. Does the industry advertise until they break even? Of course, that's the market dynamics, and it's economically rational. Advertisers should, and do, spend up to the breakeven point (or the discounted lifetime value of the new customer acquisition). They do so because one should accept growing one's business by a marginal customer even if it's a breakeven proposition. That's not to say that advertisers don't reap value from advertising, of course they do in reality (or at least, they always try to). I'm just pointing out that click auctions are expensive because the competition is willing to spend -- not because you're subsidizing spam.
icantdrive55 10y ago
Is it just me, but when I hear a Bank, or Insurance company advertisement; I always think, I wish they would save the money; and lower rates, and fees, or offer higher interest rates, or lower premiums. Whenever I do a cost comparison, the business that does a lot of advertising is usually pricier. I fully understand the need for new business to get their name/location out there, but Chase? I see them everywhere. (If anyone from Chase is listening, drop the monthy fee on checking accounts. Be one of the first one's? Then I might come back to you? Yes--a it off topic, but in the ballpark?)
omarforgotpwd 10y ago
I agree completely with your assessment. I run a website called HeyAmIFat.com where you can send in a picture of yourself and we'll tell you if you look fat or not in minutes. I often look at the huge companies advertising on my site and think "if they could see where their ads are being placed right now they'd probably realize they're wasting their money" On the other hand this huge "fraud" is what makes Google free and has thus powered the information revolution that now looks like a pivotal turning point in human history. Hard to be all that mad that Google made all the worlds information freely searchable by ripping off dumb businesses...
- icebraining 10y ago
  I often look at the huge companies advertising on my site and think "if they could see where their ads are being placed right now they'd probably realize they're wasting their money" But are they? If they're paying per click, completely uninterested visitors won't cost them anything anyway. As dkuebric pointed out, we have no idea if those 395k sites were actually costing them any significant amount of money.
- Melk 10y ago
  I agree with icebraining that it's not necessarily dumb for a business to advertise on less known or even irrelevant websites. It's the same difference between an ad flashing on a video wall on Time Square, or a billboard along a busy highway, or a poster hanging in a mall. Each has a different reach and purpose and with that comes a different price. Google gives you the choice where you want your ads to be displayed; whether it's within the Google search results, or on websites like yours, or there are programs like Google Doubleclick where you can chose which websites you want to display your ads. I think most of the criticism here doesn't so much reflect the ignorance of advertisers like the parent comment says, but ignorance of the people commenting how advertising works.
- mrieck 10y ago
  Give your website more credit. I mean what do people do after learning they are fat and feel depressed? They buy crap to feel better. Maybe your website is exactly what advertisers need.
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retube 10y ago
> I mean, what 400,000 sites do you think Chase was advertising on? Ones that really have to do with banking? Hang on: ad placement is not based on page content but the viewers profile (constructed from search and browsing history, facilitated by tracking) Right?
- kuschku 10y ago
  It’s actually both. The site determines what categories of ads can be displayed, and the viewer profile determines which in those categories will be actually shown.
  - owlmirror 10y ago
    How does this tracking really works? Is it really this sophisticated behemoth of AI research that makes it impossible to avoid? Why is it that I get targeted as an balding middle aged man with erectile dysfunction when I'm not?
    - bigmanwalter 10y ago
      Age and gender seem to be two of the more significant variables in ad selection. Many women I know started getting ads for baby stuff once they turned 26 despite having never been interested in the topic.
    - msbot 10y ago
      The adtech places I've worked at relied on cookies. They usually have massive networks of major sites and track your browser activity as you browse different. However, the servers were always crashing and I was always wondering when the customers would figure out that they were throwing money away.
    - sgoraya 10y ago
      >How does this tracking really works? Cookies and/or pixels - edit If you've opted out of being cookied, then you may be "targeted as an balding middle aged man with erectile dysfunction."
draw_down 10y ago
> So many commenters are giving the customer a hard time for realizing, "99% of my budget is spent on zero value, i.e. fraud." This is something the Ad Contrarian hammers on a lot (http://adcontrarian.blogspot.com/ http://adcontrarian.blogspot.com/). There seems to a lot of fraud and BS in the system, but it's to the benefit of most players in the system to ignore that. Even for many ad buyers, it'd be embarrassing for the CMO to admit to having thrown away tons of money on something that doesn't work nearly as well as it's said to.

ckamin5 10y ago

> I mean, what 400,000 sites do you think Chase was advertising on? Ones that really have to do with banking? Or just ones that, by some idiotic metric, have a keyword that ".equals('banking')"? The reason a Chase ad ends up on 400K sites is not because all of those sites are contextually relevant, it's because of retargeting. A user goes to chase.com, gets pixeled, and then shown retargeting ads on what ever websites they happen to visit that are hooked up to the exchanges. This could be either a good or bad thing.

dkuebric 10y ago

It's hard to tell from the article, but I don't think there was any change in Chase's advertising spend. My interpretation is that they are spending the same amount, but restricting bidding to a whitelist of sites. If so, the fact that they don't see an impact in # of impressions means more about the ad exchange's bidding system and inelastic demand (or lack thereof) for inventory on those whitelisted sites. I don't think this has anything to do with fraud.

danjc 10y ago
Also entirely possible that the balance of the 400k websites account for a miniscule percentage of impressions.
- AznHisoka 10y ago
  this. everyone else is arguing about a red herring. but 10 or 20 of those sites probably accounted for over 90% of the clicks.
- Trundle 10y ago
  Yep, as far as I'm concerned this article is a non-event without data showing this isn't what happened. "Business slightly tweaks marketing expenses" just isn't as attractive and rant inducing.
  - bigtimeidiot 10y ago
    >Yep, as far as I'm concerned this article is a non-event without data showing this isn't what happened. What other things should the article show "hasn't happened"? That will be quite a big list. As the OP says, it's odd that people lean towards "everything is A-OK!". I guess there are many, many jobs that rely on the ad-tech bubble sustaining itself.
- imarg 10y ago
  They essentially say so in the article. "Of the 400,000 web addresses JPMorgan’s ads showed up on in a recent 30-day period, said Ms. Lemkau, only 12,000, or 3 percent, led to activity beyond an impression."

stvswn 10y ago

Where to start? What makes you think that they reduced their spend by 99%? They simply limited their campaigns' targeting to a whitelist of 400 sites, there's not any indication that they were spending equal $ per placement. I'm not sure why you believe that aggregating statistics is some sort of lie -- in AdWords, advertisers are able to easily see the placement for each one of their clicks. It's not some big secret hidden from advertisers. You are also confusing why and how much advertisers care about the content of the sites. The site's content is only one signal as to the quality of an impression. It's a proxy for quality, because it's a good indication that a particular user might find the ad interesting and relevant. It's not as good of a signal as the characteristics of the user. Why would Chase be interested in only advertising on "banking" sites anyway? It's pretty silly to think that it's somehow a big scandal if the website content isn't directly connected to the business of the advertiser. Advertisers definitely don't want that. What they want is a quality user -- Chase wants someone who is actively shopping for banking services to see their ad everywhere, but they don't want to waste an impression on someone who isn't. If I were guessing, they were likely aggressively remarketing on the entire network, and now they're restricting to sites. In other words, they were following users across the entire internet, wherever they could find inventory, and now they'll just follow them to the most popular sites. You're conflating two issues -- brand safety and ad spam. The first is the relevant issue: "I don't care how good the user is, I can't have the NYT printing that my brand name showed up next to a terrorist recruitment video." You're talking about ad spam, or "you charged me for this click but it was fraud from the publisher." That's not at all what the story is about. You're jumping to a conclusion that the now excluded websites were fradulent to begin with. Do you find it unbelievable that there might be 400,000 legitimate websites in the set of available placements for Chase's ads, without spam? Why? You are mixing terms, Adwords isn't an exchange -- AdWords has inventory from owned-and-operated sites (Google, YouTube) and network partners (AdSense, AdMob, Google Display Network, etc.) AdWords doesn't sell any inventory from ad exchanges, it has its own network, particularly because it wants to maintain the quality of the placements. Spam is actively and aggressively policed. Again, that's not what the article is about -- none of the big tech co's have been doing much to prevent ads from showing against certain types of offensive content -- especially content like hate speech, fake news, etc., because it's really difficult to identify correctly at scale. The media and advertisers have started caring because it's the cultural moment we're in right now, I guess. Finally, it's not the case that "garbage inventory" is spread around, subsidized by the good stuff, in a money making scheme. Such a scheme wouldn't make sense anyway. High-spending, sophisticated advertisers know the conversion rate of the advertising, and they have a sense of the return on ad spend that they'd like. Cost-per-click is just a shallow metric in the market, if the real value wasn't there then demand would decrease. Does the industry advertise until they break even? Of course, that's the market dynamics, and it's economically rational. Advertisers should, and do, spend up to the breakeven point (or the discounted lifetime value of the new customer acquisition). They do so because one should accept growing one's business by a marginal customer even if it's a breakeven proposition. That's not to say that advertisers don't reap value from advertising, of course they do in reality (or at least, they always try to). I'm just pointing out that click auctions are expensive because the competition is willing to spend -- not because you're subsidizing spam.

icantdrive55 10y ago

Is it just me, but when I hear a Bank, or Insurance company advertisement; I always think, I wish they would save the money; and lower rates, and fees, or offer higher interest rates, or lower premiums. Whenever I do a cost comparison, the business that does a lot of advertising is usually pricier. I fully understand the need for new business to get their name/location out there, but Chase? I see them everywhere. (If anyone from Chase is listening, drop the monthy fee on checking accounts. Be one of the first one's? Then I might come back to you? Yes--a it off topic, but in the ballpark?)

omarforgotpwd 10y ago

I agree completely with your assessment. I run a website called HeyAmIFat.com where you can send in a picture of yourself and we'll tell you if you look fat or not in minutes. I often look at the huge companies advertising on my site and think "if they could see where their ads are being placed right now they'd probably realize they're wasting their money" On the other hand this huge "fraud" is what makes Google free and has thus powered the information revolution that now looks like a pivotal turning point in human history. Hard to be all that mad that Google made all the worlds information freely searchable by ripping off dumb businesses...

icebraining 10y ago
I often look at the huge companies advertising on my site and think "if they could see where their ads are being placed right now they'd probably realize they're wasting their money" But are they? If they're paying per click, completely uninterested visitors won't cost them anything anyway. As dkuebric pointed out, we have no idea if those 395k sites were actually costing them any significant amount of money.
Melk 10y ago
I agree with icebraining that it's not necessarily dumb for a business to advertise on less known or even irrelevant websites. It's the same difference between an ad flashing on a video wall on Time Square, or a billboard along a busy highway, or a poster hanging in a mall. Each has a different reach and purpose and with that comes a different price. Google gives you the choice where you want your ads to be displayed; whether it's within the Google search results, or on websites like yours, or there are programs like Google Doubleclick where you can chose which websites you want to display your ads. I think most of the criticism here doesn't so much reflect the ignorance of advertisers like the parent comment says, but ignorance of the people commenting how advertising works.
mrieck 10y ago
Give your website more credit. I mean what do people do after learning they are fat and feel depressed? They buy crap to feel better. Maybe your website is exactly what advertisers need.

deleted 10y ago

[deleted]

deleted 10y ago

[deleted]

retube 10y ago

> I mean, what 400,000 sites do you think Chase was advertising on? Ones that really have to do with banking? Hang on: ad placement is not based on page content but the viewers profile (constructed from search and browsing history, facilitated by tracking) Right?

kuschku 10y ago
It’s actually both. The site determines what categories of ads can be displayed, and the viewer profile determines which in those categories will be actually shown.
- owlmirror 10y ago
  How does this tracking really works? Is it really this sophisticated behemoth of AI research that makes it impossible to avoid? Why is it that I get targeted as an balding middle aged man with erectile dysfunction when I'm not?
  - bigmanwalter 10y ago
    Age and gender seem to be two of the more significant variables in ad selection. Many women I know started getting ads for baby stuff once they turned 26 despite having never been interested in the topic.
  - msbot 10y ago
    The adtech places I've worked at relied on cookies. They usually have massive networks of major sites and track your browser activity as you browse different. However, the servers were always crashing and I was always wondering when the customers would figure out that they were throwing money away.
  - sgoraya 10y ago
    >How does this tracking really works? Cookies and/or pixels - edit If you've opted out of being cookied, then you may be "targeted as an balding middle aged man with erectile dysfunction."

draw_down 10y ago

> So many commenters are giving the customer a hard time for realizing, "99% of my budget is spent on zero value, i.e. fraud." This is something the Ad Contrarian hammers on a lot (http://adcontrarian.blogspot.com/ http://adcontrarian.blogspot.com/). There seems to a lot of fraud and BS in the system, but it's to the benefit of most players in the system to ignore that. Even for many ad buyers, it'd be embarrassing for the CMO to admit to having thrown away tons of money on something that doesn't work nearly as well as it's said to.