A Cautionary Tale for Small Business as Tech Giant Wastes 2/3rds of its Ad Budget
Display advertising can be tricky to track and hard to evaluate for performance. In an alarming story that is just breaking now, Uber discovered in 2017 the perils of trusting without verifying when it was defrauded of $100M in advertising fees. This represents 2/3rds of the company’s $150M ad budget.
In a Marketing Today podcast, former Uber performance chief Kevin Frisch details:
“We turned off two thirds of our ad spend – $100m out of annual spend of $150m – and basically saw no change in our number of rider app installs. What we saw is a lot of installs we thought had come through paid channels suddenly came through organic.”
How Did this Ad Fraud Happen?
Uber fell prey to attribution fraud– advertisers claimed app downloads came from their display ad network instead of through organic search. Uber never would have discovered the theft if the company hadn’t experimented with turning off advertising.
Uber has since engaged in lawsuits with its agency, Dentsu’s Fetch, and several ad networks, including:
- Hydrane SAS
- AdAction Interactive
Lessons for Small Business Marketing
Uber apparently was unconcerned at wasting so much resources, but a small business would be significantly harmed by wasting most of its ad budget. Reliance on display advertising is risky, so here’s how to manage that risk:
- Avoid display advertising from companies with questionable reputations. Stick with known advertisers.
- Know what your reporting means. Watch your numbers and understand your metrics.
- Verify your reporting. Check that your numbers make sense, and run on-off tests on any suspect advertising.
Are you concerned about ad fraud for your small business? Contact us to start a conversation.