The only guaranteed antidote to this kind of fraud is performance advertising (pay per sale). I think pay per click and pay per impression, though arguably useful for brand advertising, will always be vulnerable to sophisticated scams like this.
> The only guaranteed antidote to this kind of fraud is performance advertising (pay per sale).
It's guaranteed, but it probably won't work: "Thanks for doing business with us -- by the way, where did you hear about us?" "Online, but I forget where."
Advertisers need to be able to associate an advertisement with a result. Otherwise the effectiveness of advertising is a myth.
Not when a customer walks in off the street. My point is that online tracking seems necessary to evaluate the effectiveness of advertising. If we remove tracking, which many people advocate, we're reduced to older methods to evaluate advertising.
And believe me, i'm not arguing in favor of tracking -- only presenting the most often heard argument.
That does not address what the post you're replying to stated: That PPS is a more trustworthy metric than PPC. The user is rarely, if ever, asked in this - it's all tracking.
Your argument assumes that sales follow from clicks (and can be tracked in the same way), so one need only follow the clicks to a sale. But this doesn't take into account that many sales take place long after a client has browsed online advertising. This is particularly true for big-ticket items.
> That PPS is a more trustworthy metric than PPC.
Yes, true, but only for sales that follow directly from an advertisement, with no intervening time or context changes.
I agree with the basic argument the PPS is more reliable and meaningful, but it would be worthwhile to know how many sales follow directly from an initial advertising exposure, as opposed to a more complex decision-making process.
Consider the diamond campaign waged by De Beers described in another HN thread today. The advertising costs were high, but the goal was to change consumer perceptions over a period of decades (and successfully). This is far removed from the model we're discussing, essentially an impulse purchase -- the De Beers campaign wasn't directly correlated with diamond sales at all.
My point is that not all advertising can be shoehorned into a directly trackable purchase, yet those other kinds of advertising might still be valuable.
PPA can be as misleading as CPC or CPM. If you ask for an email, it could be iframed with a more compelling offer. If you ask for a credit card purchase, it could be done with big blocks of stolen credit card numbers. This also does not include covariance between marketing channels aka the attribution model problem (ex. if you blast TV ads for freecreditreport.com then the CPA for online advertising magically drops).
All the scammers have to do is purchase say x% of clicks and the. Refund the money. It's very hard to track which ad click generated exactly which sale. For example through Adwords content network you don't know which site generated the click/purchase. You can know that content network ads gets more refunds, but without access to googles data you can't know the specifics.
So as good as CPA sounds, its not full proof either. You can just bypass it with either stolen credit card purchases or refunds.
There is no guarantee against this, which is part of what keeps web advertising prices low. Fraud is essentially priced into the product. The title is misleading, as it assumes all cost is bared by the advertisers. In truth part of the cost is implicitly payed for by legitimate website owners/the ad network who must price impressions lower to offset this kind of fraud
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The only guaranteed antidote to this kind of fraud is performance advertising (pay per sale). I think pay per click and pay per impression, though arguably useful for brand advertising, will always be vulnerable to sophisticated scams like this.
> The only guaranteed antidote to this kind of fraud is performance advertising (pay per sale).
It's guaranteed, but it probably won't work: "Thanks for doing business with us -- by the way, where did you hear about us?" "Online, but I forget where."
Advertisers need to be able to associate an advertisement with a result. Otherwise the effectiveness of advertising is a myth.
That's not how it works. Typically you have a referer ID in the URL which tracks the source.
Not when a customer walks in off the street. My point is that online tracking seems necessary to evaluate the effectiveness of advertising. If we remove tracking, which many people advocate, we're reduced to older methods to evaluate advertising.
And believe me, i'm not arguing in favor of tracking -- only presenting the most often heard argument.
That does not address what the post you're replying to stated: That PPS is a more trustworthy metric than PPC. The user is rarely, if ever, asked in this - it's all tracking.
Your argument assumes that sales follow from clicks (and can be tracked in the same way), so one need only follow the clicks to a sale. But this doesn't take into account that many sales take place long after a client has browsed online advertising. This is particularly true for big-ticket items.
> That PPS is a more trustworthy metric than PPC.
Yes, true, but only for sales that follow directly from an advertisement, with no intervening time or context changes.
I agree with the basic argument the PPS is more reliable and meaningful, but it would be worthwhile to know how many sales follow directly from an initial advertising exposure, as opposed to a more complex decision-making process.
Consider the diamond campaign waged by De Beers described in another HN thread today. The advertising costs were high, but the goal was to change consumer perceptions over a period of decades (and successfully). This is far removed from the model we're discussing, essentially an impulse purchase -- the De Beers campaign wasn't directly correlated with diamond sales at all.
My point is that not all advertising can be shoehorned into a directly trackable purchase, yet those other kinds of advertising might still be valuable.
PPA can be as misleading as CPC or CPM. If you ask for an email, it could be iframed with a more compelling offer. If you ask for a credit card purchase, it could be done with big blocks of stolen credit card numbers. This also does not include covariance between marketing channels aka the attribution model problem (ex. if you blast TV ads for freecreditreport.com then the CPA for online advertising magically drops).
All the scammers have to do is purchase say x% of clicks and the. Refund the money. It's very hard to track which ad click generated exactly which sale. For example through Adwords content network you don't know which site generated the click/purchase. You can know that content network ads gets more refunds, but without access to googles data you can't know the specifics.
So as good as CPA sounds, its not full proof either. You can just bypass it with either stolen credit card purchases or refunds.
There is no guarantee against this, which is part of what keeps web advertising prices low. Fraud is essentially priced into the product. The title is misleading, as it assumes all cost is bared by the advertisers. In truth part of the cost is implicitly payed for by legitimate website owners/the ad network who must price impressions lower to offset this kind of fraud