It's the Biggest Scandal in Tech (and no one's talking about it)

A truly massive scandal is brewing in Big Tech.

This scandal concerns the fact that 60% of advertising “clicks” are in fact NOT coming from humans; they are generated bots or automated algorithms that don’t buy anything. EVER.

If you don’t believe me, and think I’m just making this up, consider what Keith Weed had to say last month.

Weed is head of Marketing for the consumer goods giant Unilever. In this role, he oversees a marketing budget of $8+ BILLION per year. And here are his statements on the impact of bots in digital advertising.

With $8.4 billion in annual ad spend, the advertising industry pays attention when Unilever is unhappy. During the Cannes Lions Festival of Creativity, Unilever's chief marketing and communications officer Keith Weed outlined the three concerns that "keep him up at night."

"If you don't have your ad viewed, you are dead,” Weed told a Cannes audience on Wednesday.

He wants advertisers to "join up the dots in the digital industry." As Weed sees it, this ecosystem is corrupted. Some 60% of traffic online is bots. "We want to buy eyeballs of viewers not bots," says Weed. "If it is too good to be true, it probably is."

Source: Mediapost.

What does this mean?

The Tech Giants, Facebook and Alphabet (formerly Google), make the bulk of their money by charging advertisers a certain amount for every click the advertisers’ ads receive online.

The price that Facebook and Alphabet can charge for advertising space is based on the amount of web traffic that ads receive. The more traffic these ads receive, the HIGHER the prices Facebook and Alphabet can charge advertisers for ad space.

So if 60% of ALL AD CLICKS are in fact BOTS, not HUMANS, the reality is that these ad prices are in fact MASSIVELY overstated.

Again, if you think I’m making this up, consider that another consumer goods giant, Proctor and Gamble cut its online marketing budget by $100 million and found… ZERO IMPACT ON GROWTH.

Procter & Gamble Co. said that its move to cut more than $100 million in digital marketing spend in the June quarter had little impact on its business, proving that those digital ads were largely ineffective.

Almost all of the consumer product giant’s advertising cuts in the period came from digital, finance chief Jon Moeller said on its earnings call Thursday. The company targeted ads that could wind up on sites with fake traffic from software known as “bots,” or those with objectionable content.

Source: WSJ.

Again, Proctor and Gamble cut online advertising by $100 million and had ZERO impact on its results.

These are two massive companies both of which spent BILLIONS in advertising. And both of them are stating point blank that the value of digital advertising via companies like Facebook and Alphabet is MASSIVELY overstated.

What happens if these companies have to begin accurately pricing their ads? What happens if more advertising giants start pulling funding?

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Dragon HAwk Mon, 07/31/2017 - 13:03 Permalink

can we scratch off all those annoying  Mobile ads we mistakenly click on when they put the whole thing over half the screen and make the whole area touch sensitive click activated

explodinghead Mon, 07/31/2017 - 13:13 Permalink

Anyone that has done some online advertising particularly adwords and monitors traffic closley know that 50% of the clicks are bullshit.    Often you have no choice and just have to chalk it up as a cost of doing business.

Apeon Mon, 07/31/2017 - 13:19 Permalink

been wanting an app that automatically clicks on ads and opens new windows, and clicks on more ads while I am viewing what I want.

blindfaith Mon, 07/31/2017 - 13:20 Permalink

 Companies have been brainwashed to think that 'online' is the answer.PRICES are the answer.  Lower your prices and put back in the box what was there last year.12  ounces is the new 16 ounce package. How about a bag of chips and 90% is air.Where are the coupons that you once got in the mail or at checkout?If the product is 2x times what it is at the 'dollar store' and does not do a better job, what do these masterminds thing is going to get purchased again?I see an ad on line and I know it is there to screw me not help me.Fuckbook, giggle, hamizon can all go the way of RCA and the rotary phone.

techpriest Peacefulwarrior Mon, 07/31/2017 - 17:02 Permalink

Actually its quite easy. Each click has a good deal of tracking info built in, such that the advertiser can follow you on his site and see if you "convert" or not. You can then back out a spend-per-conversion ratio.

But what do I know? I've only set up systems like this multiple times. If you can spend $1 and make $1.10 in sales consistently, it works. However, it doesn't always work, and when it doesn't, you stop.

In reply to by Peacefulwarrior

any_mouse blindfaith Mon, 07/31/2017 - 15:51 Permalink

There's an app for coupons to your phone. Just give them your cell number and download their app to run in the background.

Just what I want, a grocery store tracking me everywhere I go and everything I look at.

I was the guy at a VZ employee townhall who wanted to know if there were any privacy concerns over customers information peddled to corporate customers. The dot Indian bosses were not pleased.

In reply to by blindfaith

medium giraffe Mon, 07/31/2017 - 13:46 Permalink

This has been talked about for a while.  It really came to light when sites looked at preventing viewers from using an ad-blocker on their sites.  People just went to other sites and traffic died, causing a swift backtrack.  Whilst this was happening, corporations became increasingly aware that ad-block was actually having a negligable effect on revenue. There's really no need to sound so aroused, it's not the shocking breaking news you purport it to be.  The real news is that a little electronic protest by users has won a significant victory by simply boycotting the machine with ad-block.

a Smudge by an… medium giraffe Mon, 07/31/2017 - 14:50 Permalink

Click bots are nothing new. More recently ad blockers, script blockers and more lately this "article view" in browsers that strips almost everything but text content. A few years ago I figured this was gonna destroy the ad ecosystem. But again, after a while of NOBODY talking about it, it was kinda obvious what was happening.Now watch for the really amazing part of this story as it evolves. TwitGoogFace stocks and valuations are gonna go UP.At this point reality itself isn't as convincing as the media. Facts are what you use to lose an argument these days.

In reply to by medium giraffe

Peak Finance Mon, 07/31/2017 - 13:44 Permalink

LOLZ!See that blue trend line on the chart?When the stock price hits that line, a "BOT" calls up the FED!GOOGLE, Amazon, all the big tech guys are in bed with the Gov. Might as well be called  "Freddy Google" and "Fannie Amazon" 

Consuelo Mon, 07/31/2017 - 14:33 Permalink

  "What happens if more advertising giants start pulling funding?"Why, 'pink slip Fridays' of course.   Something I've been rather hoping for at FB and GOOG - with a sick sense of humor...    Yeah, I could see a workforce reduction in both of those Farce companies of 60% - easily.   And not a moment too soon...

gdpetti Consuelo Mon, 07/31/2017 - 14:40 Permalink

RObots aren't known for their buying habits, perhaps it's a lack of time off? You can see where this style of 'capitalism' is heading and fast.... the virus ends up consuming its host... essentially programmed suicide... not intentionally done, just lack of self-awareness. THat is what we are dealing with.... psychopathic led civilization... 'Political Ponerology'... happens every time in history, one civilization after the next.... what the 'Protocols' or 'Machiavellian'  tactics of statecraft don't destroy, their psycho tools of state do.

In reply to by Consuelo

runnymede gdpetti Mon, 07/31/2017 - 21:29 Permalink

"You can see where this style of 'capitalism' is heading and fast.... the virus ends up consuming its host... essentially programmed suicide... not intentionally done, just lack of self-awareness. THat is what we are dealing with.... psychopathic led civilization... "Disinterested triangulation is not for the faint of heart, which is why few do it. 

In reply to by gdpetti

jmack Mon, 07/31/2017 - 14:52 Permalink

if one of the faangs,  facebook or alphabet, show a sharp decline in revenues,  it will crash the market. there is no breadth  the market is the faangs, and if something like this scandal upsets that perception of "master of the universe" profitability,  the sheep will hit the panic button and rush for the exits, and it will cascade.  badly.      But google and facebook are smart people.  I would not doubt if they are already selling the conglomerates on the idea of having their own bots  to push product placement in internet media.   Chat bots are already very dominant in customer service, next they will be making comments pushing their owners products...      It is coming.

oldguyonBMXbike (not verified) Mon, 07/31/2017 - 15:15 Permalink

This has been going on for 10+ years if not 20+Google aka the government has been pulling a massive RICO scam on advertisers this whole time. The only way to win is to go after their algorithms.

numapepi Mon, 07/31/2017 - 15:12 Permalink

This article is absolutely true.

Two years ago I launched an advertising campaign via facebook and clisor. They charged me claiming thousands of hits, I looked up the Awestats and it was ALL FRAUD!!!!!! Out of the thousands they claimed only a few dozen actual visits to the site!!!!! ...and NO SALES!!!!

Since then I have not spent a penny advertising on any digital platform. I am not P&G and don't have unlimited money to hand out to billionaires. Do you?

oldguyonBMXbike (not verified) Mon, 07/31/2017 - 15:21 Permalink

Their advertising targeting is useless anyways. I research my purchases well, but usually don't see ads for the thing I'm researching until after I already bought it. Then I'm inundated with ads for something I no longer need.

michelp Mon, 07/31/2017 - 15:29 Permalink

I feel the same resoning could be applied to TV viewing counts.If the ACTUAL number of viewers were properly tallied- as opposed to guessed - there would be a quick turn-over in programming.Problem is, in the US nobody can write an interesting 1/2 or hour long series anymore; its all police, war, mayhem or propaganda.So back to mindless sports.m.

Honest Sam michelp Mon, 07/31/2017 - 16:31 Permalink

Considering what gets greenlighted, it is probably a mistake to say "Nobody can write an interesting...." anymore. Those ih charge of creating properties, like Frasier, Seinfeld, and other smash long lasting hits have been sidelined in favor of those who are trying to grab the eyeballs of 12 yr olds. There are shirley writers, and producers who have good solid ideas for series TV that are not getting seen. The network programmers are probably drowning in good material they routinely ignore.I wouldn't blame the writers as much as I would those who select programs based on something other than merit. A sampling of the racial and perversion oriented programs makes me wonder if the PC crowd has gotten too much power and are not even looking at properties that might just appeal to the huge majority."Modern Family", a big hit, has suffered over the last three seasons with declining quality as the kids have aged. The cuteness being driven from the show and not replaced.  I'm wondering if the next two seasons that have been greenlighted will get even worse.  What the networks have is a 'failure to communicate' with the broader public. 

In reply to by michelp

runnymede Honest Sam Mon, 07/31/2017 - 21:24 Permalink

Gresham's law 101Dumbing down of content to appeal to the stupid is no different than. Roman coinage debasement. The bad always pushes out the good. Part of the natural law of entropy. Humans are just playing their part and are too ignorant to understand any better. The vast majority anyway

In reply to by Honest Sam

hootowl michelp Mon, 07/31/2017 - 16:43 Permalink

.....or zombies, zombies, vampires, and more zombies.  and.....bloodthirsty ghouls, chainsaw massacres, zombies and vampires.  We've got a sick horde of writers in both Hollyweird and Jew York......and hordes of pedophile and homosexual actors, producers, and directors.  What can we expect.

In reply to by michelp

DCFusor Mon, 07/31/2017 - 15:43 Permalink

What's really at stake here is the sick ecosystem under which ads are currently sold and used.Those adbrokers as a service that sell "your ad here" into slots on websites, such as this one and many others.Adblockers work by noting content that doesn't come from the domain you surfed to.  Ads where the website owner did the work to actually host and embed them come right through - see for example, - one of the few things they do get right - Advertisers and web sites have delegated authority to these high speed trader-like ad space auction houses that puport to also put the ad in "the right places" for views, which is of course, BS.  Since the ad shown in a given slot on a given site might change very rapidly and different for each viewer, it has to come from the ad broker's server or someone delegated to that - but not the site domain (eg, in this case, not, this is how an adblocker knows it's an ad, and how they know you're using one - a little script says "hmm, nothing's hitting the ad server for this guy on this site".If sites would lift a finger and host their own ad content, after selling the space to advertisers, you know, like the old days, this wouldn't happen.  It does not mean the end of advertising agencies either - they'd just have to do the finger lifting themselves instead of the full automation - which as we know, isn't working anyway.