It amazes me that Facebook don't get sued more often, if our experience with their ad management is at all representative. The UI is terrible, and plenty of the statistics it shows appear to be broken in unfathomable ways.
Estimated audience sizes? Nonsense.
Suggested ranges for bids? Sometimes change by almost an order of magnitude between submitting the ad details and checking the dashboard a few minutes later.
Preview your ad as viewers will actually see it to make sure you've got the image size right? ::hilarious laughter::
Figures for click-through rates? I don't know why you'd only want to pay for actual clicks to your site and not other things like people clicking like on your ad or your page. After all, someone liking an ad that will be gone tomorrow is surely worth as much to you as someone actually visiting your site.
What times will your ad run? We'll assume you're in the US even though you explicitly told us you're in the UK. And then we'll also price everything in dollars, so you pay a conversion fee on every bill. And no, you can't change this once your account is set up.
Just set it up the same way as last time, we were satisfied with that? Sorry, the system has changed again and you have to start over.
Maybe we could use a third party ad manager to try to overcome some of these difficulties? Sure, but they're all going to work a bit differently, and the options they present won't match what you see on Facebook's own ad management pages.
All of this is based on various experiences as a small business advertiser, and in most of the cases I'm thinking of the real numbers still worked out favourable despite all the problems and the frustration of trying to get everything working so the campaigns went ahead. But if Facebook treats larger customers spending serious money the same way, it's not hard at all to see why we hear stories like this from time to time and why legal action can result.
18 months ago my company decided to run an ad campaign on various platforms: FB, Twitter, Google search and direct buys of banner ads.
On all platforms, the campaign was targeted to most EU countries + Switzerland. For business reasons we were not interested in promoting this outside these countries.
On Facebook, out of all options, we decided to promote a post, targeted to EU countries, this post included a custom bitly link to our campaign's website, etc. A few hours after launching the campaign, we checked on the post: likes/engagement, CTR, bitly link, etc. We were shock to see that almost 90% of all likes to the post and clicks where made from Brazil. Facebook had been promoting our post in Brazil and not (marginally) in the countries we specified – I clicked on a long list of Facebook profiles who had liked our promoted post and these were primarily from the Sao Paulo region. I double checked bitly's stats with the our analytics to check who landed on our site via the campaign link. Again, c. 90% from Brazil.
The first thing after that finding was to check that the campaign was correctly setup, and it was. We immediately stopped the campaign and reached out to FB via a form (they have no email nor telephone) telling them about the issue, we included screenshots and other relevant information. We never heard from Facebook. We spent around €2,000 on a useless campaign targeted to an audience which wasn't our target market. We have never used FB again.
> We immediately stopped the campaign and reached out to FB via a form (they have no email nor telephone) telling them about the issue, we included screenshots and other relevant information. We never heard from Facebook.
Whether it's legal doesn't matter very much in practice if you lack the means to enforce your theoretical legal rights. For small sums, it's not worth the time to go to court for most people. In the US legal system, it's probably not worth it even for quite large sums, if you're likely to get stuck with paying significant legal bills even if you win.
For serious money, it probably becomes worthwhile to take action in apparently black and white cases like this, but I suspect many advertisers using Facebook ads (and Google etc.) are small outfits that never really spend serious money. They can effectively be mistreated with impunity regardless of anything the law says, unless they have recourse to something like charging back the payment for the campaign and relying on repossession of the funds being 9/10 of the law.
That assumes Facebook exists in your jurisdiction so there is a legal entity you can actually take to court, though. A significant difficulty with small claims processes, at least where I am, is that because you typically don't involve lawyers on either side so you can keep the costs down, you can also have difficulty even figuring out who you actually have an actionable complaint against if you're the little guy and you're up against a business with a non-trivial structure.
Bad customer service is usually not illegal. However, credit card companies are legally bound to issue a chargeback and refund the money if you inform them that you did not get what you paid for and the company refused to work out a mutually acceptable compromise. In this case, he should have disputed the €2,000 charge.
On the other hand, I'm sure that FB has something in the terms or customer agreement saying that the locations are recommendations and that the ads may be shown anywhere, even if you only request a certain region.
"move fast and break things" seems to apply to customer service too. is it legal? surely not, but given that our overall ad spend was much larger we didn't have the time/couldn't be bothered to chase FB. As some colleagues see this: "the bright side is that in the long run we have saved money, as we are no longer going to advertise with FB"
We thought of creating a post about this experience on our company's blog, but given that we are not a "tech focused" company, and this post wouldn't fit with our clients/blog readers interest, we decided not write about it.
We thought of creating a post about this experience on our company's blog
It's worth doing it for you and for others who are buying advertising. If it doesn't become popular, no big deal. If it attracts attention, it might be more profitable than the €2000 spent on FB for very little time spent, maybe you'll even get a refund.
I'd personally like to be able to persuade clients not to spend so much on FB advertising - superficially they look like they are returning likes and hits, but if you look into it, they're pretty useless - our referrals have actually gone down while advertising. This sort of blog post would be enormously helpful in persuading them.
Anything that shows a big corp doing bad to small corp will attract interest. Go ahead and write a blog with evidence and all. I am sure it will raise eyebrows on atleast HN.
> Of course, the post could have risen naturally to be more visible to a given audience through reshares. If the post was a link to a news piece or something that could interest the audience that could have happened naturally. Would it be possible to show the original post? (or the link to it if any?)
Considering FB even charges you to get your post to your own fans, it seems odd that when you're paying for it they would choose exactly the people you said not to show it to. They very tightly control who sees what, it was not an accident that Brazil was shown the content.
You're attributing to malice that which is sufficiently explained by incompetence.
Whenever we place Facebook ads at one of my companies, we always have a second person check the details before confirming. On numerous occasions we have confirmed the order, and then immediately seen different details showing up on subsequent pages compared to what both people on our side saw or selected on the order page, sometimes dramatically different. This has happened so often that some of the people involved now advocate taking a screenshot as evidence before confirming anything.
We're talking about an embarrassingly bug-ridden system here, particularly so given that it's the point where the authorisation to do things that cost real money takes place. The kinds of anecdotes seen in this discussion really aren't all that surprising if you've had much experience working with Facebook ads, I'm sorry to say.
TL;DW: there are tons of India/Bangladesh/Brazil-based spammers (those "buy 1000 likes on FB for $1" etc) who allegedly in order to prevent being caught by fraud detection algorithms, are liking whole array of random pages.
Edit: didn't see this was posted already later on this thread.
When we checked the accounts these didn't seem as fake, they appeared genuine to us. My impression is that something was "wrong" on FB geo targeting. But as we never heard from FB, I guess we will never know what happened.
I have my own horror story (albeit with a much smaller budget, 20k) which I posted on the discussion of the video a few weeks ago [1]. FB ad campaign had negative ROI, google campaign manyfold positive ROI.
The problem with FB is intent. Lots of impressions, quite a few clicks, but nobody is there to actually buy something (except "check-out aisle stuff" of the gum and gossip magazine variety, eg games, sub $20 impulse-buy items, etc etc). For a more nuanced discussion see link below.
This guy is a fool though. Who spends this kind of cash without proper testing and a smaller budget? It doesn't take $100k to see something simply isn't working. Letting the campaign run for $100k/day after that is ridiculous.
The article brings up some interesting points (third party verification). FB not going after the money is quite interesting too. Are they too afraid to have to defend in court how the charge is valid?
The article brings up some interesting points (third party verification). FB not going after the money is quite interesting too. Are they too afraid to have to defend in court how the charge is valid?
If it gets to court, terms about not having third party audits are unlikely to be worth the paper they're not printed on to Facebook. The customer's lawyers are presumably going to use whatever discovery process applies before the case is heard to open up every can of worms they can find, and Facebook are presumably going to have no choice but to comply with requests for information even if they'd prefer to keep it to themselves.
If the customer's lawyers discover evidence of systematic failures (intentional or otherwise) and get that information into the public record, the resulting damage to Facebook could be astronomical. The risk doesn't necessarily come only from the original case. It could lead to things like class action suits, or even investigation for criminal fraud that could have FB executives personally facing jail time, depending on which legal system(s) applied. Conceivably, that could pose an existential threat to Facebook itself, though I'd be very surprised if anything that serious was going wrong and they hadn't discovered and dealt with it themselves.
Assuming the above is approximately correct in whatever jurisdiction applied to the original dispute/law suit, I imagine you'd have to be talking orders of magnitude more money before it was worth it for FB to fight a well funded, determined opponent who has real evidence on their side in court. With their war chest, I'd expect settling out of court if necessary and then dropping the matter as quickly and quietly as possible to be their preferred option under almost any realistic conditions.
It was somewhat of a rhetorical question, but yeah, this is what I assumed as well.
In trying to find Google's policy and handling, I came across this interesting (2006) analysis[1]. Apparently they do pursue this on a case by case basis.
The problem with FB is intent. Lots of impressions, quite a few clicks, but nobody is there to actually buy something (except "check-out aisle stuff" of the gum and gossip magazine variety, eg games, sub $20 impulse-buy items, etc etc). For a more nuanced discussion see link below.
This makes sense. I go to Facebook to catch up on friends. Google is more when I'm actually searching for something. I would think that Google could charge a higher premium as a result.
It amazes me that Facebook don't get sued more often
For what? Here Facebooks was in the position to sue but they chose not to. If you can just not pay for the campaign you find suspicious then there's little reason to go to court.
FTA
Brar declined to pay the bill. He told Business Insider that his magazine titles did not generate enough revenue to cover $600,000. His credit with Facebook was ruined. He offered to pay cash in advance for future campaigns but Facebook demurred. Facebook did not sue Brar or pursue him further for the money, however.
Whatever your jurisdiction calls false representation or misleading advertising, where someone takes your money after offering one thing but in fact giving you something else instead.
In this case, it appears that no harm has been done if they didn't actually take that money in the end.
However, there seem to be plenty of stories around without such happy endings. IME Facebook's ad management system is so bug-ridden that it's hard to believe this doesn't happen all the time.
The theory is pay-for-likes click farms click everything they see, including legitimate "like" ads to avoid detection. This increases the number of fake profiles liking your page, which decreases the percentage of users liking your posts, which decreases the number of users posts are shown to (unless you also pay to promote your post...)
Yes, this is a much better description of the problem.
FB is a really bad ad platform. Yes, you can use it & get good results, but that takes more luck & skill than other platforms.
From the article: "FB estimates that ~1% of their users are fake generating fake likes". But, if those accounts have 10-100 times more likes than real accounts, you can see that the polluting effect can dominate the overall activity.
It should be possible to determine fake from real accounts using various statistics like number of likes per account average number of time between likes etc etc, with all the brainpower at Facebook I am surprised they haven't significantly mitigated this problem. This is not a problem that can ever be completely solved as its a typical arms race between good and evil but i am surprised at how badly Facebook appears to be doing as others have noted perhaps its because it in there best interest or maybe its just more visible on Facebook then it would be on google addwords or similar.
Yes, we wrote about this at http://fbk.io/stopfakelikestoday. In short Facebook could compare behaviour as you suggested (they've got a whole bunch of data scientists). An even more robust way would be making their phone number verification more thorough.
It could be devastating to their business. Facebook is in a tough spot, they are done or nearly done growing in the US and much of the developed world. Most of this fraud seems to happen in emerging markets, the exact same ones much of their "growth" is coming from. If growth numbers go negative or even flat Wall Street would run away from FB faster than you can cancel an advertising campaign.
Presumably that 1% is continuously depleted by facebook's detection and deletion of fake accounts and continuously replenished by the creation or subversion of new accounts. A high turnover rate may drive the proportion of fraudulent activity on facebook still higher.
This is a great video. What I find very confusing is the fact that Facebook has no spam detection to eliminate fake clicks/likes ? Given the obvious nature of fake likes, some of the heuristics seem very straight forward i.e.
- just filter profiles with an insane number of likes
- have very few friends but relatively a huge number of likes,
- certain regions in the world where the brands that the users have liked have no market. It looks like a straightforward matching problem.
- Suspicious Like activity and patterns from an account (like/click arrival rates, diversity in liked campaigns etc).
- De-duplication of profiles that may have liked a certain
entity by clustering on some obvious signals e.g. if too many disproportionate likes all fall in egypt relative to other primary markets, that would be an obvious red flag.
All of the above is not difficult to figure out for the quality of talent Facebook has. Here is my real confusion: Is it a lack of inclination for improving their ad network quality or a fear of exposing the low ROI of ad spend that's stopping Facebook from implementing quality spam/fraud detection ?
I'm pretty sure they do, but they are also torn by the apparent dilemma between generating more revenue through fake clicks and maintaining an appearance of the trusted ad platform. Hard to be them;-)
That video explains one aspect of the issue (the fake clicks), but what I found most troubling from the article was the five-fold discrepancy between the FB link count and the Bitly and Google Analytics visitor counts. If anything, you would expect Facebook to be able to detect at least some of the fake ad clicks, so their count would be marginally less than Bitly and GA detected.
What I find interesting is that apparently YouTube can differentiate between fake and real views. But Facebook can not differentiate between fake and real likes. Difference, YouTube pays you, but you have to pay Facebook. Hmm...
Facebook reports its profile numbers to Wall Street and as such fake profiles make them lots of money. Google reports nothing about YouTube accounts and has no incentive to look the other way at fakes (and indeed with AdSense in the picture Google has an incentive to crack down).
I actually post in fear of the hellban. I have lost two 100+ karma accounts already and even had my IP blacklisted for a while for saying "Is this really an HN worthy post?" to some general world news on an emotive topic.
Well that's explicitly against the site guidelines, and I think the mods take it very seriously because we're already a highly critical demographic, without some checks and balances it would be very easy to devolve into a droning whingefest. If you feel the need to proclaim something un-HN-worthy you can choose to either flag it or ignore it (or rip it shreds on objective grounds).
Reading this story honestly I would summarize it like this: "User don't know anything about Facebook Ads. Decide to test them. Test with $400k in 4 days. Totally waste his money".
Facebook is not perfect ... and click fraud is a huge problem. This does not means that Fb Ads does not work or return a negative ROI. You simply need to know the medium you are advertising on and use it wisely.
Thanks god we live in 2014 ... we can track everything ... real things like sales, leads, subscriptions. WHY people keep advertising to go after vanity metrics such as Number of likes or clicks. Who cares about the clicks.
Part of them are fake? Sure! Facebook should do more? Sure! Can you still earn money tracking you Facebook Ads overall Cost per sale instead of the cpc? Damn sure!
I'd agree right up until the point where he went to Facebook HQ in Toronto for training on the ads. If it were someone wasting a few grand, I'd understand. Once someone is actually trained in a certain product by the company selling it, wastes half a million, and sees this kind of result, it crosses over to the realm of fraudulent.
I agree on this point that with Facebook training you should have at least some experience but I guess he didn't learn that much :)
$6/400k is like a medium sized agency monthly budget. It's not something you learn to manage in 1 or 2 days training.
You never scale a campaign to that level until you've done weeks if not months of testing and fine tuning with every possible ad's creatives and demographic audience. Starting at $100k/days means whatever goes wrong it's already too late to fix it ... you don't have the time to do any serious testing and optimization.
Moreove it's not that easy to spend $100k/day in canada ... I deal with many Startups and Brands that get Facebook Ads right and their usual problem is they've found the right mix ads/audience to have a very good ROI but they cannot scale it to spend those amounts.
Spending $100k per days probably means that he was targeting the whole canada. Whitout any specific targeting on interests, demographic informations etc. If that's the case and he was getting 150k clicks per day out of a $100k budget he should be pretty happy :)
That's what sounds odd about this whole issue. They don't say what the company's marketing budget was, how big a portion of that budget this campaign was, and exactly what their goals are from their campaigns, but I think it would be hard to arrange those numbers in such a way that it would make sense for them to run a ~$500k ad campaign in a medium nobody there had any experience in. Come on guys, run a couple of dozen hundred dollar campaigns to get a feel for how to target them and what returns you can reasonably expect from them. I would expect that nobody spends that kind of money on any kind of ad campaign without knowing a lot more about what the returns from it will be and whether that justifies the expense.
It's worse than that. He wasn't advertising for something he sells, he was advertising the ads on his network of wordpress fashion blogs. If I felt his business had merit I might have retained a shred of sympathy, but content farms paid to push merchandise are just a very small step from clickfarms which don't bother with the facade of providing anything of value.
Other metrics reporting ~100-150k vs Facebook reporting 600k+ clicks seems well beyond the level of error that would be produced by not tracking things in the exact same way.
Coincidentally, FB metrics reporting 2-5x what the target site's metrics show would be very easily explained by bots generating traffic to FB's servers without actually redirecting over to the target site...
Our testimonial sharing app tracks clicks from sharing on facebook, linkedin, twitter and google+. When we first implemented it we saw that shares on social media were getting like 80 clicks in a few minutes. We poked around and found that bots inflating clicks had been a problem for url shortners like bit.ly in their early days.
After looking carefully at user agents, IP addresses and behaviour we found that most bots don't load javascript, and could be filtered out by just loading some javascript as part of the redirect. Not sure what Facebook is doing..
FB says they track clicks. If I click an ad really fast, say 5 times before my browser can redirect and load the target site does FB count that as five and server analytical show only one because only one of the five clicks resulted in a request? I might have to do a micro experiment to find out....
It sounds like the ads were directed at Facebook pages. Then the 150k was the number who clicked then ad, then clicked through to his actual website(s). In which case, that's actually a pretty fantastic clickthrough rate. At least, that's the understanding I got from this paragraph:
At one point, data from Facebook indicated his ads had delivered 606,000 clicks, but the site itself registered only 160,000 incoming clicks from Facebook, according to data supplied by Brar. (160,000 clicks is a not insignificant return. After all, these are not clicks on a mere Facebook page, these are users who clicked through to an off-Facebook site.)
Otherwise I'm not sure what they'd mean by "160,000 clicks is not an insignificant return." Maybe I'm reading too much into it though.
Right. The 160k clicks are not clicks on a mere Facebook page. Perhaps the original 606k that Facebook is talking about are though. And the 160k are the number of those that click through to the off-site page. Anyway, probably not. Was just a theory. The article could be clearer.
"Clearly, the vast majority of businesses that use Facebook for marketing are pleased with the experience. Facebook's growing revenues, up 63% last quarter, indicate it is only getting more successful at selling advertising, not less."
Clearly? Just because they're getting better at selling doesn't mean the people are actually pleased with the experience. And as this article points out, "selling" is the same as "collecting payment".
I guess I wouldn't go all the way to "clearly," but if a line of business in a highly visible market is growing, that often indicates that the product it is selling is useful. The buyers are motivated and have the capability to test the product's efficacy. It would be quite a thing if Facebook ads generally did not work and somehow Facebook was successfully growing the ad business anyway.
It all depends whether their customers are repeat advertisers or not. If they're able to continue growing their first-time advertisers, but few of these businesses are satisfied, repeat advertisers - then I wouldn't say "clearly" is appropriate.
One key here - eCPC dramatically ramps as a campaign goes on, given the same target demographic.
If he was targeting a demographic like women in SE Asia, 18-35, then his test campaign would have first seen cheap clicks. Facebook's algorithms would find the cheapest users within that demographic, who are the least in demand by other advertisers, for whatever reason. CPC's would be low right off the bat, with a $200-300/day campaign.
Then, when he just suddenly increased to $100,000/day, he would have absolutely tore through the cheap available impressions within a matter of minutes, leaving only the more expensive users, with much higher CPC's.
As soon as the CPC skyrocketed, he should have pulled the plug on the campaign. But, it sounds like, there was a bad mix of both him being inexperienced with online advertising (needing training in their office) and FB sales reps encouraging him to let it ride.
If he had slowly increased budgets, from $300/day to $500/day to $1,000/day, he probably would have started to see a spike in CPC as soon as he moved it up to $1,000/day, and a vertical "holy crap KILL THIS CAMPAIGN" spike in CPC when he hit $1,500/day - $2,000/day.
It's really hard to manage campaigns at that volume - and there's entire teams of people needed to manage a campaign at the level of $100,000/day.
This reminds me of those Groupon horror stories. The small businesses were wrong to not running the numbers on deals that would clearly absolutely destroy them. But, the sales people at Groupon were even more in the wrong by taking advantage of those small businesses to turn a quick profit.
But you specify the maximum that you are willing to pay per click. Presumably he knew what he could pay per click for average users while maintaining profitability, and set the maximum accordingly. He doesn't seem to have a problem with his cost per click.
The point of the post is that the "users" became increasingly less valuable as the volume of clicks he purchased rose. It shows that you cannot obtain large numbers of legitimate clicks/likes through FB ads. As the reach of the campaign grows, the percentage of authentic users clicking on ads appears to rise dramatically. That is a huge problem. My personal belief is that the percentage of fake accounts and bot activity is far in excess of Facebook's estimates, and there is little that they can do about it.
Agreed with that - I know that in my campaigns, I prefer having a bunch of smaller campaigns, which I can track the performance on at a very incremental level.
One twist is also that a lot of advertisers don't do CPC bids with FB. I know for Mobile Installs, the default is optimized CPM, without a specific CPM bid. Just throwing it to the FB algorithm wolves, and seeing where it lands.
I've found that has better results than CPC, CPM, or CPI bids, but, because it's entirely in the hands of Facebook, I have to watch it like a hawk. If I look away for a few days, the costs can get out of control.
This is a key point. I'm sure Facebook carries a trade credit insurance policy and those policies require collections and court if a person/entity doesn't pay. So in other words they certainly ate the bill if they didn't make him pay.
The only logical reason to do this is fear of the truth coming out in court and the ensuing press coverage to damage their stock value.
Anyone have an idea about FB's liability if they were subpoenaed for fraud and the investigators found internal emails discussing the fake click problem and their decision to ignore it. Seems criminal to me.
Even if FB thinks that they have a total legit case, they can fear the exposure of the misinformation and FUD in the discussions in the court and press coverage.
Assuming that they did write off the bill it is curious that they didn't try and keep the client. Why not just fix the problem and rerun the campaign for free?
What doesn't ring true about this article is that the advertiser would spend $100K/day without building up to it with a whole lot of testing first.
Facebook may have declined requests for comment, but we are still only getting one side of the story, and I cannot completely believe this one side. There's more to it.
That is alluded to in the 5th from last paragraph: "Facebook's terms of service forbid third-party verification of its clicks". What reason, other than fraud, would they have for such a clause?
Why the hell would you ramp from virtually zero spend on FB to spending $100K/day, especially if you're a "small business"? Quite frankly, this guy seems like a bit of an idiot - ramp slowly! That is an absolutely insane budget for FB ads.
Summary: Man runs online magazines, revenue from ads. Advertises himself on facebook, hopes to make more ad revenue than he has to pay. Spends $100k/day for a few days. Notice that google analytics says he hasn't got as many hits as facebook says they referred. He stopped the campaign. Disputed bill.
After seeing a few stories like this, it seems facebook advertising makes sense for one thing: buying likes. When one of us sees a site with 11.2K likes, we would know better. But the average user might not.
I know of a developer that did this. They purchased the cheapest possible Facebook ads and targeted them towards the largest audience. They received hundreds of thousands of "likes" for a relatively small investment ($1000 or so). Most of the people who liked their page had profiles from developing countries.
They then used the number of likes they had amassed (~200k) to get funding for their new product. It worked. Everyone took them much more seriously when they mentioned how many fans they had on Facebook. They were even able to attract licensing deals from some fairly big brands because their Facebook page looked so impressive.
This is a scam. He's using scammers to scam other people. Maybe that's obvious to everyone here, but I think it's worth stating explicitly that while this behavior is being enabled by the state of advertising on Facebook, it's still unethical and dishonest.
An interesting aspect is that someone could be essentially perpetrating this scam while legitimately being innocent of malevolent intent. I don't know if that's the case in the story recounted above (I suspect not), but I have met a small business that ran a "successful" Facebook ad campaign to get more likes, and who are happy with the result, where I strongly suspect the quality of the likes is really low. They genuinely think they ran a successful ad campaign with good ROI, and I don't think the intent was to puff up their profile. Afaict they haven't used the number for anything either, but it could well lead to unintentionally misrepresenting their popularity to future potential investors/clients/etc.
Of course, this starts to some extent from Facebook: the small businesses reporting their "successful ad campaign" are more or less passing on the low-quality metrics that Facebook gives to them. Some businesses are aware that these metrics are crap, but then Facebook itself is also aware...
This actually leaves you worse off than doing nothing at all. The reason being, once you push out actual content, the engagement with your content will be so abysmally low that facebook won't show your content prominently to many of your actual fans.
It's worse than useless, it damages your ability to use facebook as a means to connect with your customers in the future.
It may work ... and if you just want 200k fans no matter what you don't even need Facebook Ads, you can go directly to the like farms and get them for much cheaper.
But then how will he explain his investors that his 200k "Fans" are generating 0 revenues ? :)
I worked for a company that got about 1 million users of their facebook game, mostly purchased. They got this and the CEO mentioned it prominently. Unsurprisingly, paid users generate about zero revenue. Still, it probably sounded good to investors.
This company is bankrupt now.
A lot of business activity is fads. Social media will probably always be a big business, but it seems likely to me that companies have been rushing into it part not knowing what it is worth, part knowing it may not be worth it but it sounds good.
The click discrepancy is what always has bugged me about Facebook ads (well, aside from the poor CTR). I've tried small FB ad campaigns since they've had the service and they ALWAYS report significantly higher clicks than what GA reports as coming from Facebook.
From the article
"Facebook works hard to get rid of fake accounts. In its annual report, the company said that only about 0.4% - 1.2% of all active users are abusive accounts that create fake likes."
I find it incredibly hard to believe that only 1.2% of FB accounts are creating fake likes. Go to Fiverr.com and get 5,000 likes for $5.
this type of story seems to appear over and over again, i don't know much about facebook advertising, but with so many stories of fake account clicks i would expect facebook to comment at least once on the subject
They should fire their own media buyer rather than blame Facebook. When buying any type of advertising you first have to buy a small campaign and measure the ROI (ie. new customers gained, not likes and followers and other social metrics bullshit, but customers) from that campaign before investing more in that same channel. They threw big money at a bad channel without testing it, that's their fault.
If their goal was just to buy likes and followers then that's just twice as idiotic: the goal should always be to gain customers. That's the only ROI metric you should be looking at. So if you buy small test campaign on Facebook and you didn't gain any customers then don't spend any more money on Facebook. It's that simple.
For starters, if you really have to go to Facebook's office to be trained on how to spend money on their ad system, I'm not sure you are knowledgeable enough to be spending $100,000 a day on those ads. I doubt Facebook was going to teach you how to optimize your campaign in order to spend less money than you would.
As stories like these continue to pop up, it is important that FB take action to protect their brand.
How about simply refine the target audience for ads? for instance, in order for a user to be served ad; you must have a minimum number of friends, say 50, you must have a minimum number of say 3 pictures of yourself, you must have a reasonable level of activity on the site for over the last X period whether 3, 4 or 5 month period.
A combination of such measures in some ways will clearly weed out most of the fake account and honestly even if there is a genuine account who doesn't match any of these criteria, then it's obvious they aren't even engaged on the site, so why ruin the experience further for them with ads?
Ultimately, FB's objective is to please advertisers and the natural flow is that they will end up pleasing shareholders. But focusing of the hard accounting numbers in the short term at the expense of goodwill of the marketers paying your bills is simply suicide. Once a significant number of advertisers distrust the platform and stop spending on it, its' 1.2 billion users will mean nothing and that is where the shareholders will start dumping them for the next company.
> For starters, if you really have to go to Facebook's office to be trained on how to spend money on their ad system, I'm not sure you are knowledgeable enough to be spending $100,000 a day on those ads. I doubt Facebook was going to teach you how to optimize your campaign in order to spend less money than you would.
Facebook has been aggressively trying to ramp up revenues, a personal touch is a good way to do that. It sounds like he had a number of highly popular Facebook pages and was likely contacted to come in for some in person training to get to his pages to the next level. If anything that offer is just a testament to his pre-existing success on Facebook, they would lose a lot of money if they invited everyone to the office.
I've been with Google AdSense for a long time and from time to time I get pitches about going to training or having phone conferences to help optimize more, I have to imagine this is similar. Sometimes it's helpful, sometimes it's not.
well he might have been successful running those pages but when it comes to spending half a million dollar, I think that comparison becomes apples and oranges sort of. There was nothing really stopping him from spending those amount in piecemeal.
What about limit the budget to $10,000 per day, check and analyze the results then see where you can fine-tune it then probably improve it? I bet by the time he spend the first $100,000 he would have come to the realization that something is wrong.
The claim is that he's already successful so why the rush to spend such significant amounts on generating likes?
I do not have data to back this up, from my observation, most people do not know what is or is not an advertisement unless it is flashing. Even then, there is a not-negligible percentage that does not know. People just click to find out what things are, not because they are interested in the message. Perhaps a simple way would be to ensure that user does not come back to the page within x seconds, otherwise you should not pay.
Reading that last sentence gave me an idea for a SaaS company that (for a small monthly fee) marks and lets you purge suspicious fans of your page. Too bad it's impossible to get a list of your page's fans: https://developers.facebook.com/x/bugs/147185208750426/
The article does mention, rather inconspicuously, that most of the advertisers seem happy with Facebook. I am no fan of facebook or their advertising model, but to me the title seems a bit editorialized.
There could be three explanations for fake FB likes:
1. As mentioned in the story, click farms trying to cover their tracks by clicking FB ads.
2. Competitors creating fake profiles and fake likes. It seems like a cheap way to drain out the advertisers budget.
3. FB itself creating the fake accounts / likes. I know it is implausible, but there is a profit motive, so I guess the possibility should be considered.
Facebook needs to charge different click prices depending on the quality of the profile. clicks from 10-friend profiles that are only a year old and like every page they hit, aren't as valuable as clicks from profiles that are more organic and have been around for years.
Estimated audience sizes? Nonsense.
Suggested ranges for bids? Sometimes change by almost an order of magnitude between submitting the ad details and checking the dashboard a few minutes later.
Preview your ad as viewers will actually see it to make sure you've got the image size right? ::hilarious laughter::
Figures for click-through rates? I don't know why you'd only want to pay for actual clicks to your site and not other things like people clicking like on your ad or your page. After all, someone liking an ad that will be gone tomorrow is surely worth as much to you as someone actually visiting your site.
What times will your ad run? We'll assume you're in the US even though you explicitly told us you're in the UK. And then we'll also price everything in dollars, so you pay a conversion fee on every bill. And no, you can't change this once your account is set up.
Just set it up the same way as last time, we were satisfied with that? Sorry, the system has changed again and you have to start over.
Maybe we could use a third party ad manager to try to overcome some of these difficulties? Sure, but they're all going to work a bit differently, and the options they present won't match what you see on Facebook's own ad management pages.
All of this is based on various experiences as a small business advertiser, and in most of the cases I'm thinking of the real numbers still worked out favourable despite all the problems and the frustration of trying to get everything working so the campaigns went ahead. But if Facebook treats larger customers spending serious money the same way, it's not hard at all to see why we hear stories like this from time to time and why legal action can result.