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Surprising it is taking advertisers this long to wake up, considering the decades I've been reading articles on HN about the massive fraud rates from entire fra

by toss1 1mo ago

Surprising it is taking advertisers this long to wake up, considering the decades I've been reading articles on HN about the massive fraud rates from entire fraud ecosystems. The saying in marketing used to be: "Half of all marketing dollars are wasted, but we never know which half". In the internet, it seems to be more like "90% are wasted" and literally never even get a human impression, nevermind a human click-thru and sale. What was always surprising to me was how the advertisers just went along with the scam. Perhaps as if the marketers' bonuses depended more on advertisement budget spent instead of sales increased. If that's the case, what is making them catch on now?

pjc50 1mo ago
It was generally believed that "pivot to video" was entirely fraudulent. What's happening now is the retreat from the open internet; users are either taking the Google AI search summary as gospel and not clicking through, or just going to chatgpt by themselves. Traffic from actual humans to non-FAANG pages is falling.
- malfist 1mo ago
  Theres a good cause for that. These marketers have spammed the entire internet with ai slop or blogspam to make search results useless.
blooalien 1mo ago
> If that's the case, what is making them catch on now? Perhaps the threat that "AI" will soon be the only "eyes" that see (and subsequently ignore) their online adverts?
kijin 1mo ago
Back when 90% of ad spending was wasted, they still made money from the 10% that resulted in sales. That expectation was built into the CPM/CPC, and hence the ad budget. With the amount of bot traffic I'm seeing these days, I would guess that the waste ratio is more like 99% now. That means a 90% reduction in conversions for the same ad budget. Surely someone is feeling the difference.
OroPla 1mo ago
The entire internet ad business has never made sense to me. Have you ever clicked any of the links? The landing pages were always confusing and not at all designed for you to engage with them. I used to think, okay, I guess they don't care about visiting their sites and just want to get eyeball impressions to stay relevant in the cultural zeitgeist. Then I learned how ads worked in the print industry, where it is assumed in the calculation that every magazine changes hands through at least twenty people who all look at all ads. So maybe everyone was just already used to getting screwed over paying for ads. Then there's the fear of missing out angle. People paying for ads don't know whether it makes a different, but are too scared to find out. I also once read about a small business that took that risk and found out not paying for internet ads made no difference whatsoever. Maybe it's time for an entire country to decide to just straight up outlaw all internet ads for a couple years and force everyone to find out what happens.
- deleted 1mo ago
  [deleted]
- swader999 1mo ago
  I can't remember the last time I clicked an ad link. I can't even remember a brand I've seen advertised.
  - tzs 1mo ago
    It is possible you do remember brands you've seen advertised but just don't remember you saw an ad. I remember a long time ago seeing a study that asked people if they had seen ads for the California lottery and if so what they remembered about them. They also asked people if they played the lottery and if so why they played. What they found was that in the people who said they had not seen ads and in the people who aid they had seen them but could remember anything about them a large fraction of those who played gave reasons that were almost word for word quote from slogans from the ads.
    - toss1 1mo ago
      Interesting data, and possibly true OTOH, I'm quite sure if you came to me with a truckload of $100 bills and a gun, put the gun to my head and asked me to tell you anything about an advert I saw 3 minutes ago, the truckload of cash is mine if I can say anything, and you'll shoot me if I can't, you'll end up shooting me. I'm pretty sure that is true for the next 100 people also. The question is, which matters?
voidsnax 1mo ago
Open web display inventory is a mess. Nearly entirely fraudulent. Every person in the supply chain for open web display inventory, sometimes even including the Chief Marketing Officer of the firm purchasing the ads, is incentivized to turn a blind eye to fraudulent impressions. Fraud is ultimately paid for by shareholders and owners. This is because everyone in the supply chain is paid per impression, so they don't have any real incentive to root out (or even discover/report) fraud unless the buyer is leaning on them to do so. An unsophisticated firm looking primarily at reach and impressions as key performance indicators sees those KPIs inflated by fraudulent impressions, so even the purchaser isn't really incentivized to discover fraud in those instances. And if you suddenly decide you do care about fraud after not caring about it previously, you're faced with the prospect of having to report to your stakeholders that the metrics you've been giving them have been bullshit for years. If you're looking at conversions as your key performance indicator then you do care about fraud and will lean on your ad buyer to discover and reduce it, or else just avoid open web display inventory entirely and buy exclusively on platform properties like LinkedIn or Instagram. There have been various efforts to reduce fraud for a long, long time. Obviously nothing so far has really comprehensively worked. But there are some people in the industry who do make their money and earn their reputations as fraud-fighters, and they continue pushing new solutions. If the fraud problem for open web display inventory could actually be solved it would probably result in a bonanza for anyone positioned to capitalize on a fraud-free supply chain, so some people are incentivized to chase the dream (or at least convince others that they're earnestly chasing the dream).
bee_rider 1mo ago
A good marketing business model would probably be “I’ll only show your marketing material to my other customers, since they are evidently likely to fall for marketing material.” I wonder if it is just the first internet-native generation getting older and getting into decision making positions. People with built-in ad blockers in their brains. Or it could be “AI” clicks, who knows?
carlosjobim 1mo ago
> What was always surprising to me was how the advertisers just went along with the scam. Talk to them. They can't resist the temptation of throwing in a few bucks (whether that is $20, a few hundreds or a few thousands) into the online advertising casino whenever it's a slow day in the office. Then Meta will tell them that their ad reached 40 000 people or Google will tell you that your website had 3000 more clicks, but you don't see any increase in sales and think that you'll do better next time. Or if it's a bigger business with a dedicated team advertising. Of course they're not going to tell the boss that it's bullshit and doesn't increase sales - then they'll loose their jobs!
pooploop64 1mo ago
A lot of people willingly get into scams because they think they're entering a position to be "in on it." Lots of ponzi scheme victims are like this. They know it's a ponzi schene and they know how ponzis work, but they think they'll be one of the people who cashes out before it ends. The breaking point is when the wrong person tries to cash out and they realize it already ended a while ago.

by toss1 1mo ago

pjc50 1mo ago

It was generally believed that "pivot to video" was entirely fraudulent. What's happening now is the retreat from the open internet; users are either taking the Google AI search summary as gospel and not clicking through, or just going to chatgpt by themselves. Traffic from actual humans to non-FAANG pages is falling.

malfist 1mo ago
Theres a good cause for that. These marketers have spammed the entire internet with ai slop or blogspam to make search results useless.

blooalien 1mo ago

> If that's the case, what is making them catch on now? Perhaps the threat that "AI" will soon be the only "eyes" that see (and subsequently ignore) their online adverts?

kijin 1mo ago

Back when 90% of ad spending was wasted, they still made money from the 10% that resulted in sales. That expectation was built into the CPM/CPC, and hence the ad budget. With the amount of bot traffic I'm seeing these days, I would guess that the waste ratio is more like 99% now. That means a 90% reduction in conversions for the same ad budget. Surely someone is feeling the difference.

OroPla 1mo ago

The entire internet ad business has never made sense to me. Have you ever clicked any of the links? The landing pages were always confusing and not at all designed for you to engage with them. I used to think, okay, I guess they don't care about visiting their sites and just want to get eyeball impressions to stay relevant in the cultural zeitgeist. Then I learned how ads worked in the print industry, where it is assumed in the calculation that every magazine changes hands through at least twenty people who all look at all ads. So maybe everyone was just already used to getting screwed over paying for ads. Then there's the fear of missing out angle. People paying for ads don't know whether it makes a different, but are too scared to find out. I also once read about a small business that took that risk and found out not paying for internet ads made no difference whatsoever. Maybe it's time for an entire country to decide to just straight up outlaw all internet ads for a couple years and force everyone to find out what happens.

deleted 1mo ago
[deleted]
swader999 1mo ago
I can't remember the last time I clicked an ad link. I can't even remember a brand I've seen advertised.
- tzs 1mo ago
  It is possible you do remember brands you've seen advertised but just don't remember you saw an ad. I remember a long time ago seeing a study that asked people if they had seen ads for the California lottery and if so what they remembered about them. They also asked people if they played the lottery and if so why they played. What they found was that in the people who said they had not seen ads and in the people who aid they had seen them but could remember anything about them a large fraction of those who played gave reasons that were almost word for word quote from slogans from the ads.
  - toss1 1mo ago
    Interesting data, and possibly true OTOH, I'm quite sure if you came to me with a truckload of $100 bills and a gun, put the gun to my head and asked me to tell you anything about an advert I saw 3 minutes ago, the truckload of cash is mine if I can say anything, and you'll shoot me if I can't, you'll end up shooting me. I'm pretty sure that is true for the next 100 people also. The question is, which matters?

voidsnax 1mo ago

Open web display inventory is a mess. Nearly entirely fraudulent. Every person in the supply chain for open web display inventory, sometimes even including the Chief Marketing Officer of the firm purchasing the ads, is incentivized to turn a blind eye to fraudulent impressions. Fraud is ultimately paid for by shareholders and owners. This is because everyone in the supply chain is paid per impression, so they don't have any real incentive to root out (or even discover/report) fraud unless the buyer is leaning on them to do so. An unsophisticated firm looking primarily at reach and impressions as key performance indicators sees those KPIs inflated by fraudulent impressions, so even the purchaser isn't really incentivized to discover fraud in those instances. And if you suddenly decide you do care about fraud after not caring about it previously, you're faced with the prospect of having to report to your stakeholders that the metrics you've been giving them have been bullshit for years. If you're looking at conversions as your key performance indicator then you do care about fraud and will lean on your ad buyer to discover and reduce it, or else just avoid open web display inventory entirely and buy exclusively on platform properties like LinkedIn or Instagram. There have been various efforts to reduce fraud for a long, long time. Obviously nothing so far has really comprehensively worked. But there are some people in the industry who do make their money and earn their reputations as fraud-fighters, and they continue pushing new solutions. If the fraud problem for open web display inventory could actually be solved it would probably result in a bonanza for anyone positioned to capitalize on a fraud-free supply chain, so some people are incentivized to chase the dream (or at least convince others that they're earnestly chasing the dream).

bee_rider 1mo ago

A good marketing business model would probably be “I’ll only show your marketing material to my other customers, since they are evidently likely to fall for marketing material.” I wonder if it is just the first internet-native generation getting older and getting into decision making positions. People with built-in ad blockers in their brains. Or it could be “AI” clicks, who knows?

carlosjobim 1mo ago

> What was always surprising to me was how the advertisers just went along with the scam. Talk to them. They can't resist the temptation of throwing in a few bucks (whether that is $20, a few hundreds or a few thousands) into the online advertising casino whenever it's a slow day in the office. Then Meta will tell them that their ad reached 40 000 people or Google will tell you that your website had 3000 more clicks, but you don't see any increase in sales and think that you'll do better next time. Or if it's a bigger business with a dedicated team advertising. Of course they're not going to tell the boss that it's bullshit and doesn't increase sales - then they'll loose their jobs!

pooploop64 1mo ago

A lot of people willingly get into scams because they think they're entering a position to be "in on it." Lots of ponzi scheme victims are like this. They know it's a ponzi schene and they know how ponzis work, but they think they'll be one of the people who cashes out before it ends. The breaking point is when the wrong person tries to cash out and they realize it already ended a while ago.