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Comment by tboyd47 | Hacker News Reader

I agree, but my question is, why hasn't the crash happened yet? Doesn't everyone know most clicks are by bots?

This is anecdotal but I feel it's much more common than we talk about: when I was in ad tech, I saw first hand how advertisers would spend money on impressions for the sole purpose of being able to report to their higher-ups how many impressions and click they got. Particularly for brands where conversion attribution was difficult to impossible.

The media agencies spending on be half of the brand also have virtually no reason to NOT spend ad dollars on fraudulent clicks and impressions - again, they're just trying to get paid.

And of course the publisher doesn't care if the impressions are fraudulent.

Basically, there is a very large rigged economy in ad spending that both sides perpetuate for their own good.

There's definitely some truth in that. For all sorts of promotional spending (think things like tradeshows as well) there is a whole system that depends on the belief that spending money on whatever activity is a good idea. "Events are a waste of marketing dollars. We shouldn't ever sponsor them." said no event manager at a company ever.

I remember the first time I actually got raw logs of where my ad agency’s impressions were ultimately going. It was just so blindingly obvious that it was all a waste.

I came to the same conclusion you did. You’d have to go several layers up into the client’s org to find anyone with incentive to do anything but tell the most optimistic story they could.

That old agency is still around, surprisingly. My best guess is that whoever is actually holding people accountable for the money spent just has a number in mind that sounds reasonable, and has no expectation of seeing evidence that it’s well spent.

Yes - but in order for something to be rigged it has to be rigged "against" someone, and I believe that someone is the consumer. Advertisers and publishers benefit, but the consumers see intrusively targeted, annoying ads everywhere they go. Ad blockers have re-balanced the equation in favor of consumers (at the expense of publishers), but publishers are resorting to video because it's easier to force someone's attention the more passive they are, even though that defeats the entire value proposition of digital marketing for many places, which is higher user engagement/tracking...

Maybe the most profitable and effective way to do advertising is still direct sales, but call me old-fashioned.

There's still a surge of companies trying out advertising models, willing to throw away money to see what works. Once everyone has figured out how to do it efficiently the landscape will change and that day can't come too soon for me.

Because the broader economy has been doing well, and that hides problems. Like Warren Buffet said, it's only when the tide goes out that you see who is swimming naked.

"everyone" meaning everyone who buys ads?

No, they probably spend their marketing budget on "online marketing" because they were told it's necessary

Advertisers can pretty accurately track and price campaigns; if clicks are inflated 50% by fraud, it comes out in what they pay. Even if not in this round, then in the next. Adwords advertisers can modify their campaigns extremely frequently, but even display ads are generally sold at most on 3 month contracts. If, as DSP buying ads for a campaign, you don't hit your CPA target, then you don't get new campaigns. Now legit publishers definitely get screwed, but that's kind of ironic since the entire idea of adsense is to screw good publishers by allowing advertisers to target customers wherever it's cheapest.

tl;dr It doesn't matter that much to advertisers because fraud washes out in the pricing.

How did you determine that most clicks are bots?

Savvy marketers aren't measuring clicks, they're measuring conversions and they tie their marketing spend to sales leads and to revenue generated. Ads that generate clicks but no sales don't last long.

You're coming at this from a SaaS point of view. Imagine if you're a rather large brand like Fedex. You can't tie your digital ads directly to a conversion because the conversion happens offline. But their advertising department is supposed to make it seem like they're spending money and driving "brand awareness". So getting fake clicks, fake ad video views -- all of that can get reported up so they can make themselves seem successful.

I'm actually coming at it from an enterprise sales side.

And sure it's harder to measure a branding campaign in any medium (though people certainly still do it). You don't necessarily care about clicks at all in that scenario. Brands have been figuring out ways to measure the effectiveness of campaigns on offline sales since long before the internet.

Click fraud is an issue for the industry, but it's a small one. It's simply not true that "most clicks" are fraud. And, in any event, digital ad spend continues to grow. So if Buzzfeed and Vice are in a slump it's not because advertisers are shying away from digital.

Have you noticed how many brick and mortar stores ask for your email or phone number at the register during a purchase? They absolutely can tie offline purchases to online activity with that information (not to mention your credit card).

Some can, some can't. Ad networks such as Facebook actually don't let much information escape, getting even basic demographics on who saw one's Facebook ads can be hard, getting identifiable information is, to the best of my knowledge, not available around impressions.

I think you'd benefit from researching a bit more around what major brands do from a measurement standpoint. With the benefit of that much data, you can do some fairly accurate econometric/media mix modeling and get a solid read on lift for core metrics that they've invested a lot in to understand their impact on the bottom line.

There is absolutely garbage inventory mixed in, and lots of solutions to try to minimize the impact of that, but to assume that these major brands don't know how this all works is naive.

Further, just as an example, both Google and FB have very solid options for importing offline conversions which are relatively easy to map back to an audience ID of some sort.

As a contrived example: it's easy to geotarget digital ads. So focus them on just Chicago and see if sales originating in Chicago go up or down vs other cities.

It has happened. The digital media companies haven't all closed, though some have most recently gothemist and dnainfo, but many have been hollowed out with fewer reporters putting out many more much worse articles (often re-written press releases at best).

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