When Uber turned off two-thirds of their annual advertising budget – around $100m – you could be forgiven for thinking there would be consequences to their actions.
But, because of ad fraud, attribution fraud in particular, the ride-share company found basically no change in the effectiveness of their advertising campaigns.
We explore this largest ever fraud case and highlight just how big an issue ad fraud is for digital advertisers.
Back in early 2020, Kevin Frisch, the former head of performance marketing and CRM at Uber, told the tale of how ad fraud (specifically attribution fraud) ate at least $100 million of Uber’s $150 million online ad budget.
The story has popped back up now because former Sleeping Giants alum and co-founder of Check My Ads, Nandini Jammi, Tweeted a thread this week about how ad fraud is still not being discussed in the wider tech industry.
What happened at Uber?
At the end of January 2017, Uber found itself under attack on two fronts. The company was facing protests on social media using the #DeleteUber hashtag and the company’s former CEO was courting controversy by being involved in an economic council assembled by then-US President Donald Trump.
Sleeping Giants, a liberal social media activism organisation, then started a social media campaign to find out why Uber was advertising on controversial ‘news’ site Breitbart – an American far-right news network founded in 2007.
When Frisch wasn’t able to identify which ad network was ignoring their blacklist, he started just shutting off networks one by one, starting with a 10% reduction in ad spend, which saw zero change to rider acquisition (the number of people signing up/using Uber’s services).
Then Frisch shut off $100m of Uber’s ad spend.
When there were still no changes, he realised something was amiss. Eventually the company ended up turning off two thirds of its spend and saw no change to the number of app installations.
Investigations Begin At Uber
“What we saw is a lot of installs we thought came through paid channels suddenly came through organic. A big flip flop there, but the total number didn’t change,” he told Marketing Today on a Podcast Episode with Alan Hart in February 2020.
He continued to investigate and found evidence of fraud, fake apps, phantom clicks and bots.
Speaking at the Mobile Marketing Association’s Impact Conference in 2018, he further explained what had gone on at Uber. Apps that Uber placed advertising on showed the number of clicks were more than Uber’s monthly active users (MAUs).
He added: “How can we be the victims of fraud? We don’t pay on views or clicks, we only pay when there’s an actual rider who takes a trip in a real car with a real driver and pays with a credit card. And so we realised this was ‘welcome to attribution fraud’.”
Uber Takes Legal Action
Uber issued a lawsuit against mobile agency Fetch Media to answer allegations of ad fraud; including failure to return rebates and misrepresenting the effectiveness of its mobile ads.
“Just before Uber suspended the entire Uber Campaign in March 2017, Uber was spending millions of dollars per week. Had the ads been legitimate, one would expect to see a substantial drop in installations when mobile advertising was suspended. Instead, when Uber suspended the Uber Campaign, there was no material drop in total installations.
Rather, the number of installations supposedly attributable to mobile advertising (i.e., “paid signups”) decreased significantly, while the number of organic installations rose by a nearly equal amount.
This indicated that a significant percentage of the installations believed to be attributable to advertising were in fact stolen organic installations. In other words, these installations would have occurred regardless of advertising.”
Uber voluntarily withdrew this complaint in late 2018, and Fetch counter-sued in 2019 for unpaid invoices.
A second suit was later issued in San Francisco in June 2019 against five ad networks – Hydrane SAS, BidMotion, Taptica, YouAppi and AdAction Interactive – which Uber accused of purchasing “nonexistent, nonviewable or fraudulent advertising.”
That suit alleged that the five companies were collectively paid $70 million between 2015 and 2017 via Fetch for performance campaigns to encourage installs of the Uber app.
Frisch said in his speech to the MMA: “What happens here is that some networks are trying to place ads everywhere.
“And, to get paid, they’re generating clicks on thousands of devices so that when someone’s smartphone installs the Uber app – organically, on their own, not after seeing an ad – if they’ve happened to click anywhere within the ad network as well, the network can claim credit for the ad,” he added.
Was The Uber Case Unusual?
According to independent fraud researcher Dr. Augustine Fou, what was unique about the case was that Uber took its grievances public and identified actual ad networks and companies. He said it was about time and added: “What is key here is simply the legal precedent set by a big marketer and the details of what they say (in the suit).”
Dr. Augustine Fou said what usually happened when advertisers realised they’d been ‘taken for a ride by a shady ad network’ was that they’d stop working with that network, demand a refund, dust themselves off and learn from the encounter.
In most cases, he said, the ad network then just moved on to a new, perhaps less savvy, company looking for advertising.
But responsibility for the prevalence of fraud doesn’t just fall at the feet of opportunistic and/or rapacious bad actors claimed Fou.
“Everyone is to blame, including the advertiser who pushed for more volume and more installs,” he said. “The only way to get those desired volumes is through fraud – there aren’t enough humans.”
Writing in Forbes Fou lists the biggest ad fraud scandals of 2020 and notes that the Association of National Advertisers (ANA) and TAG (Trustworthy Accountability Group) are giving marketers a false sense of security with claims that their certifications caused ad fraud to go down by 80 – 90%, to 1% ‘overall fraud rate’.
“The “1.05%” is not overall fraud; it’s just what they can detect as IVT (invalid traffic) to a site. They are not even taking into account all the other forms of fraud that are not invalid traffic — think mobile app fraud, ad slot refreshing, pop-unders, pixel stuffing, malware, etc,” he added.
Kevin Frisch also talked about the difficulty of finding evidence of ad fraud in the first place and explained it was only possible once you had detailed data.
“Until you do that, if you’re just relying on the higher-level reporting, you just don’t catch it. You should start by assuming that half of what’s on the display channels is fraud. You can’t sort of out-source, and say, here’s an anti-fraud tool, let me just run it through that.”
However, Frisch said you can detect fraud if you set your mind to it and once you’re aware of it.
For many performance marketers, the idea of how deeply their budgets are being affected by online ad fraud is still a mystery and for those aware, finding the evidence or what to do when they have it presents another set of challenges.
“Companies I’ve seen where they have the brand team here and the performance marketing team there, they end up just being so disconnected, and so having them unified fairly closely I think is really, really important” Frisch added.
Calls For Advertising Honesty
Here at Beacon we’re passionate about transparency, authenticity, and intelligence in both marketing and wider digital transactions. The Beacon platform provides data you can trust with bot identification and blocking features.
Ad Fraud Resources
Beacon CEO, Nigel Bridges, keynote speech on ad fraud at MTEX Conference 2020
Beacon CTO, Stewart Boutcher, talked about the scale of the situation at The UK’s Digital Marketing Hub on a number of occasions.