Without fraud, the digital media business would collapse | Hacker News Reader

Without fraud, the digital media business would collapse

nymag.com

31 pointsinteleng7 comments

Key quotes:

"The mechanics of the fraud are complex and technical, but it boils down to this: Companies that place online ads think they are paying based on how many potential customers will see their messages, but the ads are ineffective in actually reaching consumers. Companies in fact frequently pay for ads that are 'seen' only by automated computer programs known as bots, or by low-wage workers toiling in offshore 'click farms.' The bots and click-serfs drive up costs for advertisers by faking 'impressions' on their online campaigns — meaning that any time an ad is recorded as being seen or clicked on, Google, Facebook, or whoever sold the ad charges the client."

and

"While everyone at the conference was eager to talk about fraud, few were willing to discuss its implications. That's because the profits from fraud widely benefit both of Ad:Tech’s namesake industries. If online ad fraud is as prevalent as I heard at Ad:Tech, it follows that the overall revenues of the dominant ad-based internet companies — chiefly Google and Facebook — are significantly inflated by bogus transactions. And that’s a big deal for the stock markets as a whole."

So, I've seen this in paid search. How are returns others see in more specific contexts, paid sponsorship, YouTube, and other more contextual channels?

This person has to be familiar with the concept of "cost of doing business," but I guess they just haven't made the logical extension to this domain.

Everyone knows there is some amount of fraud. Advertisers price it into their bids. AdTech companies work relentlessly to fight it. Who actually loses is very unclear, and may not be a static fact (i.e. it may depend on what given moment in history you're observing from, or even what subdomain of advertising you're working on). Depending on elasticity, it may be the customers, it may be the adtech companies, or it may be legit inventory suppliers.

Without fraud, the digital media business would most certainly not collapse. Impressions would become more valuable roughly in proportion to the fraction of impressions that are currently fraud. Everyone would be better off, with the exception of the fraudsters. If digital media would be crushed by the lack of fraud, I can guarantee you that the folks in the industry would not be working so hard to prevent it.

I've often wondered why I can't set my campaigns to, e.g. "Only show this ad to people who have bought something from some vaguely legit website in the last 2 years" You can assume that any impressions you were going to get from the people this excluded are pretty low quality anyway.

Ad Tech folks: Why doesn't this already exist?

This article was written with an interesting tone; I had a difficult time following it when the author made it seem like he was falling victim for the pop-up scams mentioned.

It had the ironic tone of a causerie, a genre that for some bizarre reason isn't well-known in the English-speaking world.

Americans often find themselves overwhelmed and put into moral distress by causeries, unfortunately.

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