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Comment by smallgovt | Hacker News Reader

Assuming that click fraud is pervasive across all advertisers, the fact that it exists should have no bearing on your ROI as an advertiser.

FBX is a RTB ad exchange. If only 10% of clicks are real, you simply bid 10% less than you would otherwise. You'll get the same ROI.

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Your math doesn't work out. If 10% are real, you'd need to bid 90% less. And that also totally ignores that you are bidding against others and wont get clicks for 90% less.

This is true. However, Facebook & Google deal mainly with 'dumb money', eg, ad money not analyzed or checked. Fraud doesn't affect people that know how to calculate ROI from a CPC campaign -- fraud affects "Coke" trying to run a large spend near the end of the quarter. Thus when these large companies ignore fraud or view inflation -- it does steal from ad companies that could have offered a real ROI and it steals from the client.

And as long as there are dumb clients out there spending vast sums of money indiscriminately without demanding to see results, there will be very little motivation to fix anything. Those clients are mentally still stuck in the TV age, where measuring results is hard and hoping for the best is the mindset.

Lol what? Facebook and Google promised to solve the measurement problem and uhh... they haven't.

As far as I can tell the entire ad industry is just all the various parties either fudging numbers or blatantly lying to each other. So long as no one calls anyone else out, they all walk away with a happy sum.

It gets even funnier. Because of dumb money - the costs per CPI goes up. Thus startups can never tell why fb ads have little to no return. AND fb and google are incentivized to make the system less transparent.

The thing is that ad ROI is super hard to measure for branding campaigns. Coca-Cola can't tell exactly what their Facebook ROI is and a lot of the people who buy ads for those types of companies have incentives to overrate the ROI of these ads, too (because thats basically the rating of their work).

Interesting, I suppose I never thought about it from the perspective of an advertiser who is not direct response driven. That is, there may actually be players in the exchange who are buying eyeballs -- not conversions.

Of course. You can't click on a billboard and those have existed forever.

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