Former AppLift CEO and founder of Incrmntal.com Maor Sadra chats with us about the state of the advertising industry, how mobile advertising really works, and why ad fraud is such a big issue for small business and large corporate marketers everywhere.
Maor’s a big fan of quizzes for marketing – he says that quizzes are a “very creative, good, positive and non-disruptive way for users to show, ‘Hey, I’m actually interested in X as a qualified user, rather than some anonymous user.’ So quizzes can be a valuable tool in your mix of ads, especially as they will continue to allow you to collect user information in a safe and ethical way.
Welcome to a new episode of The Quiz Makers! Today our guest is Maor Sandra – he’s a special guest who’s not a riddle user right now or a quiz maker per se like most of our other guests. Instead, Maor joins us as the former CEO of Applift, a major player in the online advertising industry. And we’re going to talk a little bit about the future of ads, the state of ads, advertising fraud, and what if anything you can do to battle it.
So hello, Maor, welcome to the show!
Good morning Boris. Nice to see you again.
It’s been a while… so not every one of our listeners knows a lot about you know or the players in the ad industry. They may just be running some Facebook ads through Google ads. Could you spend like a minute or two telling us about Applift and what you guys were doing? I think that’d be very interesting.
Cool. Happy to. So when I joined Applift, this was about six years ago. Before that, I had spent 14 years in the ad tech industry; ten of which in desktop advertising and then the last decade in mobile.
Now, when I joined Applift, it was fairly young, but it was already one of the most prominent players in performance marketing. Back then, app developers had very limited options to distribute their apps. Discovery is not the best in app stores. For example, if you try to type a search on Google like “Who was that actor in Game of Thrones?” You will get hits and you will get the answer.
However, if you tried to do the same with Google Play on mobile, you’re not going to even get IMDb is a suggestion.
So search within the app store has not been great.
Hence, app developers were kind of forced to figure out other ways to do distribution. Applift was a company who connected app developers who want to distribute their apps and publishers who had banner media inventory. And we priced it on performance basis – meaning that app developers didn’t pay Applift when a user saw an ad or clicked an ad, only when the user downloaded and installed an ad.
Now, when I was there, we grew the business quite a bit and Applift now has 14 offices around the world. I spent quite a lot of time on airplanes and working. Originally, it was only with gaming companies, but later on, we also worked with non-gaming. So anything between travel and transportation verticals, fintech… you know, there’s a lot of banks now going into mobile because the world became mobile. Right?
That would be my follow up question. So when we talk about the ads market, a lot of people, me included, probably think about desktop ads a lot, but they’re not very relevant anymore, are they? Because all the traffic is mobile?
I don’t think it’s relevant. Well, of course, when an advertiser like Netflix meets you on the web and converts you. That causes a problem sometimes because the platforms are siloed almost. It means that when you use a mobile app, and when you use a mobile web site or a desktop, Netflix would see you as two independent users until you registered, which meant quite a lot of reset for the industry.
Many advertisers had to figure out – “How do we now know that this user is Boris on his desktop, his TV and his mobile app?” That’s the big challenge, I think that many advertisers faced when this whole mobile thing exploded.
Right? So how would you classify the status of today’s ad industry? Let’s say you’re a small business. Do you even stand a chance from running regular Google or Facebook ads?
Or will the big players be the only ones that even have a chance to make money from running ads? What’s your take on that?
Well, to your first question, how do I look at the ad industry or mobile industry? There is this emoji of the guy who puts his hand on his face. That’s kind of how I would classify it. It’s a jungle, it’s chaotic.
It doesn’t mean that there is no chance. I think, as always, product plays a big part here. If you have a great product, then okay, you have a chance.
But when it comes to fighting against the bigger players or the more established players, if you go to the app stores, and look at the top grossing apps, the ones who make the most revenues, they are not new. I think the average age there is like six years.
So that means to become an established player, there is a lot of work.
On the other hand, there are so many interesting marketing tools and these days to allow you to actually understand who your users are – then do a better job targeting, segmenting, and finding users rather than trying to fight the biggest players in the world.
And of course, it takes time. It takes budget. And it always takes creativity as well because, of course, there’s always these stories about apps that made it even with very little marketing because they found their audience.
Right. And then there’s the other issue I think people are facing. So obviously, if you have a great product, things become easier.
But I recently attended an online conference with some big brands talking about ads. And a lot of their marketing people complained about ad fraud.
So I asked, innocent as I was in this industry, then as a smaller player (like Riddle.com) would we be affected by ad fraud if we just use Google ads and Facebook ads? The response was hysterical laughter!
What is your take on that fraud? Is it really a huge problem?
It is a huge problem.
With digital advertising in general, when you buy a million impressions and get 10,000 clicks out of it, you’re happy when you get 100 conversions out of those ten thousand clicks.
Now what does that mean? It means that you were willing to waste away all the impressions that didn’t result in the clicks and that didn’t result in conversion.
If you’re a bank robber, you need to really work hard to get into the safe.
If you are a fraudster and you want to make money, then all you really need to do is generate some fake online impressions, fake clicks, or sometimes even fake conversions.
It’s a huge problem.
And there are unfortunately companies whose business is to do just that.
Now, a big part within mobile and mobile apps has been tracking and attribution. In desktop, you own your domain literally. You as Riddle own riddle.com.
If you are a mobile app developer, you don’t own that domain. It’s hosted on Apple or Google. Now, these companies have no interest to expose their data, they’re not gonna share their data with you.
So you as an advertiser depend on third party technologies to kind of tell you, “Well, we think this user who installed your app is a real user. And we think so because this is where he touched your ad or clicked your ad last.”
The industry just accepts it because there hasn’t been another way. And I sometimes use the analogy of a football/soccer team. You have 11 players and they’re playing together but you’re giving all the credit to the striker [for the conversion] who scores the actual goal). You might be saying “Why do I need 11 players? My team can only needs a striker. You know, he’s scoring the goals.” It is ridiculous, but it is how the industry has worked until now, because there was no other way.
One quick question, in case people are not familiar. When you mentioned last click – typically, whoever delivers the last click to a download or to a purchase gets the most money, right? Or who gets future business?
Correct. That one that gets all the credit.
So to defraud people, you have to make sure you’re the last click. Exactly.
Which is what fraudsters do actually. It’s not just fraudsters. So the industry is even more complicated. The big platforms Facebook, Google, Snapchat, or Amazon because they have so much unique first party data, and such a huge reach when they entered this mobile media game, they thought, “Why should we let anyone else tell our advertisers how many users we generated for them? We have unique data so we will not expose our data. For example, Google, we will tell the advertiser what we show the user an ad. So we can claim that we generated this install for you.”
Now there is a scenario where an advertiser will go on Facebook and say “Wow. Facebook generated ‘Boris’ as a customer.”
And the same advertiser will go to Google and see, “Oh, Google claims that they generated ‘Boris’ for me” as well. And so on and so on and so on. The attribution software solution will try their best to deduplicate and say, “Well, it wasn’t them. It was actually this publisher, who generated a million clicks and this publisher was the last one to have ‘Boris’ click. So it’s this publisher.
That’s how fraud looks like – it’s sometimes very visible, yet ignored, because of the enormity of the data that we’re talking about.
Okay. So as I introduced you as the former CEO of Applift, that implies that you’re not the CEO there anymore since you became very interested in this whole topic of ad fraud. You started your own company in that field, correct?
Yeah. I wouldn’t say we were an ad fraud company.
But for the last few years since I joined Applift, I understood the fact that Facebook, Google and so on are self-attributing and the advertiser basically has absolutely no way to know what’s going on and fraud became such a huge problem.
A few years ago, after I started advocating towards change, I became very vocal and opinionated on the fact that attribution is broken, and it needs to be fixed. The way I tried to do it in the past was I tried to put the attribution companies in the same room and say “Hey, guys, let’s figure out standards”.
The second thing I tried to do is to get advertisers to rally and push back against Facebook and Google to “Hey, allow us to use our our attribution and give us data”.
Now, you know, I’ve been in this industry for 20 years. Looking back now, that was very naive. Facebook and Google are not going to change for advertisers.
The other thing, by the way, is that this is already coming from desktop advertising. Desktop advertising is massively controlled by brands, okay? If Procter and Gamble decides we’re not advertising on Google deskopt until they fix something, Google fixes something.
If you recall, a few years ago, Google changed how they track and clicks on YouTube because Procter and Gamble and a couple of other very large brands [complained].
Now in the mobile space, Procter and Gamble is a tiny player. Zynga is a bigger player than Procter and Gamble. And Playtika is a bigger player than Procter and Gamble.
A lot of these mobile app performance advertisers (specifically gaming) are very large and very competitive. And they figure out their way on how they advertise. When the brands do a ban on Facebook, it’s actually good for the performance of developers. So there is not a single player or even 10 players that are big enough to make a change.
Now for years, I really tried to talk to the attribution companies about resolving their own issues. But interestingly enough, where the attribution companies went was, “Well our product kind of incentivizes publishers to do fraud on our systems. We’re going to charge you for this new feature that is anti-fraud.”
That is a feature that basically circumvents their own loopholes. I found that relatively genius on a business side, but while I don’t want to say the word unethical, it wasn’t really what I cared for much.
Now, I really started asking question, what needs to really happen if I cannot disrupt the ecosystem? What can I do? Why is attribution working as it is?
The basis of it comes from traffic. Okay, attribution companies measure how many impressions and how many clicks were, but the attribution piece giving all credit to whoever taps the user last makes zero sense.
Now come working with a co-founder and trying to understand the industry like how do you know that what you’re doing is actually effective? How do you know if you don’t stop advertising tomorrow for a month? See your numbers go down and then ad campaign by campaign vendor by vendor? How do you know what is the actual value? And now this like, stopping for a month, no advertiser does that that’s kind of like commercial suicide.
But this is how I came up with the idea to found Incrmntal. What we’re doing, in short, is trying to evolve digital digital marketing from measurement of traffic to measurement of value. What it means is that instead of trying to determine in real time, “Well, he scored the goal, we only need this player.”
I’m trying to understand how the game is who passed? Who? Who played which part? And what should your next game look like?
So we’re doing value measurements, using algorithms without needing to stop the game and say “Hey, wait, stop everything. Let’s see what’s going on.”
Because football is not basketball where, you can call out timeout every two seconds, basically. That’s what we’re doing. We have a couple of very large customers we have designed the product for. Again, some of them spend a whopping $200 million a year on marketing. And they know that anywhere between 15 and 40% of that goes to waste.
But there there’s a huge blind spot where they cannot know which 15% and which 40%. That’s what we’re trying to do.
That sounds like a worthwhile goal.
Sounds like a really cool company. Speaking of, and because we’re The Quiz Makers, I also wanted to tie this very quickly back into what else you can do on advertising.
And we discussed before as we prepped for this podcast, you mentioned that this next release of iOS we’ll see some massive changes, where the attribution will become a lot harder; knowing the customer and final click will all be harder.
How do you see quizzes help with that, if at all?
Yeah, I think I think this is great timing. So when we started working on this product, we thought it is likely that Apple and Google will at some point, eliminate the user device identifier. Why? Well, there is a rising concern in the world about privacy. And with all due respect, the device identifier is personally identifiable information (PII).
If I have your device identifier, Boris, I can bet quickly figure out where you are, what you’re doing, where you’ve been.
It is, well, it’s scary. It’s scary for users and Apple’s goal is to sell devices to sell hardware. So there is a rising concern about user privacy and how advertising has been taking advantage of this.
It was just a matter of time for Apple to make this change. And they’re making this change. So starting September with a release of iOS 14, the device identifier will be ‘opt in’ by default, which means that users will be asked “Do you want to share your personal information including your location, your device identifier, and so on, and so on, and so on with third parties?”
Now when you see this, you know that this is for the benefit of users and as a user, by the way, I appreciate it.
It is harmful for me today, because as an advertiser, I cannot now easily know that you’re “Boris”. Actually, I won’t even know that because the new identifier coming out is going to be on a campaign level with a lot of limitations.
It means that if, if advertisers want to get to know their audiences, they need to think of a different way. You cannot just use the Facebook information to know that this is “Boris” and this is where he lives.
Now, it’s very, very good for the users. But again, it means that as an advertiser, you need to work differently, to get the user to actually give you “Hey, this is who I am. This is what I like to do.”
I’ve spent some time obviously on your website, seen a lot of the videos and I know quizzes as well. It’s a very creative, good, positive and non-disruptive way for users to show, ‘Hey, I’m actually interested in X as a qualified user, rather than some anonymous user.’
Even if you’re a very large advertiser, it doesn’t mean that your media costs will be inflated 10 times it might mean that your unit economics will increase. But if I go back to this example of old school advertisers, did “a million impressions gets 10,000 clicks gets 100 conversions” made sense?
It shouldn’t make sense. Because you can actually target the impressions that are relevant, get a lot more clicks, get a lot more conversions. And yes, maybe you’re unit on your unit economics costs increase, but your ROI remains the same. Plus your customer loyalty increases, which is very good for you.
And we know from quizzes, you mentioned they’re really good to know your user and who they actually are.
Specifically, if you do it on a voluntary opt in basis, where people going through a quiz see a form to fill in additional data at the end of the quiz. If the form is optional, the call to action is good, and there’s value provided, we still see 30% to 40% opting in. As you said, in terms of unit economics, that probably blows every other method out of the water.
Okay. Well, cool Maor. We’re trying to keep these short and sweet like quizzes.
So I’d like to do a little wrap up here. Thank you so much – it was very insightful and kind of scary to learn about this state of the ad industry.
I really hope that your new company takes off and helps people save money on the wrong impressions. And I love the analogy of the the soccer team. I think people forget that it takes more than just one person. More than just one click.
I love that. Really cool. Thank you so much for being on the show and all the best for Incrmntal. We’ll link to you in the show notes for sure.
Cool. Thank you very much.
You’re welcome. Have a great day.