top | item 7211514

Facebook Fraud [video]

1678 points| fanfantm | 12 years ago |youtube.com

393 comments

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[+] notlisted|12 years ago|reply
Nice video. All true. I have performed tests with the same ad budget ($20k) and target audience for Google and FB. FB ROI was negative. Google ROI was 400% (travel space). The only thing that seemingly "works" has been buying likes by advertising. This video should help educate my clients of the utter uselessness of those too.

This brings up the interesting question of the general (non)value of a lot of mobile advertising. High impressions, super-low click rates, with many "falsies" because of tricks by the developer, eg where the advert is shown at random, quickly covering up parts of the user interface or extremely close to legitimate user interface elements.

Case in point, the app "Reddit in Pictures" bounces its adverts up and down at the bottom of the screen. If the advert were static, you wouldn't make the mistake of clicking on them, however, due to the bounce it has happened to me at least 20 times in the past month.

In short: for me the only valuable advert is a google advert... visible at the time when people have actually expressed interest in a topic/product, because they search for it. Note: google display network advertising is equally useless/fraudulent.

[+] notlisted|12 years ago|reply
Since it was my post, let me hijack the hijack and refocus the discussion.

FB advertising has major issues and not just fraud.

#1 - FB has a feedback loop issue

The main reason why (for us) Google works so much better, is that it spans the full sales funnel, from impression to click to registration and finally conversion (room bought).

Google optimizes ad serving for themselves AND for me, and I can see the results. As long as they generate more revenue for my client at an acceptable cost per conversion (sales, not likes) we will spend more on google. Google isn't just taking, it's giving (a lot). As long as the last segment, ie actual conversions affecting ad serving, is missing, google will remain our favorite marketing channel.

#2 - Facebook has a major intent issue.

Eyeballs are nice, but only if those eyeballs have the intent to convert/purchase, which is rarely the case for high price, non-luxury and non-lifestyle items on the FB site itself, unlike a lead generated by google's search engine.

I have read about the "tricks" to minimize useless clicks and learned about some more below, but it really shouldn't be that hard.

PS I do realize that my situation is quite specific - see comment above or below, hospitality industry, busy market, price-sensitive audience, not a big brand name, etc. It may work for you, it just doesn't work for us, and not just because of the fake likes.

[+] xxbondsxx|12 years ago|reply
Hey everyone -- sorry to hijack the top thread but I’m an ads engineer at Facebook so I feel qualified to respond. I posted this over on reddit too but it's still pending approval.

In the case of this ad — I think we actually delivered on what was asked for. The targeting specs were fairly broad (cat lovers in four countries). Getting 39 people who like cats to like a page with a cute cat picture in 20 minutes sounds pretty reasonable to me. If you want a specific kind of cat lover, you’d probably want to target even more specifically (like people in a zip code near you).

We're continually working on making it easier for advertisers to target the right people. Earlier this year I worked on a piece of UI called "Audience Definition" (in our ad create flow), which helps give advertisers guidance on how to target ads more specifically. If you set your advertising too broadly (or too narrowly) -- you get a warning.

Fake (and low quality) likes are bad for everyone. We don’t want advertisers to get fans that aren’t good for their business -- we want to help them drive real results, and we can’t do that with bad likes. We invest a lot in improving the systems to monitor and remove fake likes from the system, and also in helping advertisers set smart targeting to help them reach the people they care most about.

And to be honest, a lot of people like cats, and the picture on the page is pretty adorable. Lots of real people like lots of things. And LOTS of people like cats. :P -Peter

[+] calbear81|12 years ago|reply
Good questions raised about the UX issues that contribute to fraudulent clicks and installs but I take issue with the generalization that only bottom of the funnel, high purchase intent ads are valuable.

Startups generally have a bias towards doing things that they can measure accurately. This leads to heavy reliance on highly attributable channels like AdWords since you can target people who have expressed high purchase intent. What most companies don't do is look closely at multi-channel attribution models and look at how multiple exposures across different media types change purchase behavior. Perhaps someone who is exposed to two display ad driven messages prior to seeing your Google ad is 2x more likely to click and 4x more likely to purchase vs. just being exposed to your Google ad alone. I'm not saying that's what you will see, but you should be curious to understand those effects.

We tend to generalize based on our own experiences. I also don't think Facebook ads work well in many cases but I also can see brands that are doing a great job or run innovative campaigns that get their message across effectively so I know Facebook works if you get it right. Similarly, many folks give banner ads, mobile CPA ad networks, or TV a shot and see poor outcomes without knowing whether it was poor creative, bad media planning, loose targeting parameters that contributed to the poor outcomes.

[+] moocowduckquack|12 years ago|reply
google display network advertising is equally useless/fraudulent

It is very good at giving me pictures of the more expensive things that I have recently bought, should I suddenly need two.

[+] entropic|12 years ago|reply
I'm the developer of Reddit In Pictures and I'm sorry about that issue, please go into 'Settings' and disable ads!

I just wanted to give as much space for images as possible, so when the ad loads it puts itself between the text showing the number of images and the ActionBar, if the ad doesn't load it doesn't take up any space. Is the bounce you're talking about when the ad initially loads (like on orientation change)?

I haven't had a chance to work on that app in a while, but when I have time to re-visit it I will test out making the ad area static so that it never seems to bounce.

[+] Recoil42|12 years ago|reply
Another great example of the kind of mobile advertising you're talking about: Flappy Bird, where ads are shown every time you re-start the game. In a typical Flappy Bird session, that could be up to 5-6 ads per minute — only shown on screen for a second or two.
[+] grrowl|12 years ago|reply
The major disconnect between Google ads, Facebook ads, and likes is that Facebook likes don't mean anything. Very rarely are people begging to engage with your company — in that case, they'd already be engaged. When you ask google "cheapest flights to SF" it will serve your ads to an eager audience on a silver platter; Whereas many Facebook users will like anything moderately interesting or cool, and the ads show up between "Girl from high school had a baby" and beach photos.

It's apples and oranges. Imgur/9GAG aren't advertising on Google, just as travel agencies won't see much ROI on Facebook.

[+] uvace08|12 years ago|reply
Two questions: (1) What are practical, specific ways that Facebook could fix this problem? There's clearly a problem. (2) Also, how should digital advertising companies that integrate a Facebook share option in their offering avoid supporting shares from fake profiles?
[+] leishulang|12 years ago|reply
I can't find a thing called google advert. You meant google Adword right?
[+] blumkvist|12 years ago|reply
Alternative in short: You are only looking to do demand fulfillment.

See how that pans out in the long run (5+ years).

[+] lingben|12 years ago|reply
If you haven't yet watched Derek's earlier video about "the problem with facebook", you should: http://www.youtube.com/watch?v=l9ZqXlHl65g

because in it he lays bare several fundamental structural issues about facebook which 99% people don't realize. Well worth the watch.

Unless fb changes drastically, it will die a surprisingly fast death.

[+] taigeair|12 years ago|reply
This is not good. This won't stand for long. Reminds me of Yahoo advertising based on the buyer's ignorance.

Quote:

I didn't realize the answer till later, after I went to work at Yahoo. It was neither of my guesses. The reason Yahoo didn't care about a technique that extracted the full value of traffic was that advertisers were already overpaying for it. If they merely extracted the actual value, they'd have made less.

Hard as it is to believe now, the big money then was in banner ads. Advertisers were willing to pay ridiculous amounts for banner ads. So Yahoo's sales force had evolved to exploit this source of revenue. Led by a large and terrifyingly formidable man called Anil Singh, Yahoo's sales guys would fly out to Procter & Gamble and come back with million dollar orders for banner ad impressions.

The prices seemed cheap compared to print, which was what advertisers, for lack of any other reference, compared them to. But they were expensive compared to what they were worth. So these big, dumb companies were a dangerous source of revenue to depend on. But there was another source even more dangerous: other Internet startups.

http://paulgraham.com/yahoo.html

[+] cinquemb|12 years ago|reply
What I don't understand is why doesn't facebook try to leverage it's data and serve contextual/interest ads on other sites in similar way that google does with adsense? I know I would use it with my startup.

That way, they don't have to conflate the incentives of the different parties involved as much as they are doing now.

[+] bhartzer|12 years ago|reply
And Facebook's valuation will disappear equally as fast.
[+] kevando|12 years ago|reply
The trouble is this is 100% from the content creator's perspective. From the user perspective, this ends up working out quite well.
[+] roryhughes|12 years ago|reply
While I agree with much of what is said in the video, you are able to (at the top of the news feed) change from top stories to most recent to get the posts in order of date instead of filtered.
[+] KaoruAoiShiho|12 years ago|reply
The OP's video is great and identifies a real problem that should be solved. This particular video is naive and pretty bad in my opinion, really disagree.
[+] thinkcomp|12 years ago|reply
When I moved to Silicon Valley in 2006, I had just lived through the events that were eventually twisted into the movie The Social Network. My conclusion having witnessed Mark's behavior firsthand was that he was the least trustworthy individual I had ever met and that he was likely to harm others.

At the risk of sounding like Chicken Little ("the sky is falling!") I wrote a great deal voicing my point of view, including my very first post on Hacker News (https://news.ycombinator.com/item?id=24742), in which I called Mark a fraud. For expressing my grave and sincere concern, I was met with what could only be described as considerable hostility.

Aware that very few wanted to hear what I had to say, I did everything I could to move onto more interesting and useful work. I don't spend my time worrying about Facebook, so I haven't looked into their ad technology in any depth. Nonetheless, everything in the above video strikes me as spot on, which would also mean that I was exactly right. Facebook's entire valuation appears to be based on little more than false advertising and click farming. As the CEO of a publicly-traded corporation with a supposed market capitalization of $162.61 billion, Mark would still appear to be, as I described here (http://www.aarongreenspan.com/writing/essay.html?id=80), the greatest con of all time.

I hope that based on these findings Facebook finds itself the target of civil actions filed by multiple Attorneys-General and the DOJ, but I doubt very much that our justice system would render a fair outcome even then.

[+] memracom|12 years ago|reply
Without judging whether he is right or not, I'd just like to point out that IF he is right he would fill the same role as Nassim Nicholas Taleb in the Banking Collapse of 2008 and the role of Harry Markopolis in the Bernie Madoff pyramid scheme.

So there is ample precedence for this being a correct assesment and if you have read anything surrounding the Madoff controversy and the banking collapse, you will know that the NY financial scene is riddled with incompetence and corruption. It is entirely possibility that Facebook is the biggest stock market fraud in history.

[+] onedev|12 years ago|reply
Sounds like you're a little bitter.
[+] brokenparser|12 years ago|reply
Zuckerberg isn't a con, he's an entrepreneur and a successful one at that. He even created jobs in third world countries :)
[+] mullingitover|12 years ago|reply
I found a way to dramatically improve facebook. Around the beginning of the year I unfollowed every single friend and page, so my newsfeed is completely empty. Now when I want to know what my friends are up to, I go check out their pages, essentially going from a push feed to a pull. It gets me out of the empty crack addiction-esque cycle of going to the news feed and being disappointed/bored with the lives of my friends, and instead lets me focus on what facebook is actually valuable for: party planning.
[+] colinbartlett|12 years ago|reply
My solution was to delete my Facebook account. Now, I engage with the people I care about via mechanisms that are far more meaningful: emails, phone calls, a coffee, a lunch.
[+] cliveowen|12 years ago|reply
I honestly think Facebook was better when it was just a directory of profiles, then it decided to completely change the nature of the service by focusing entirely on the newsfeed. It sure made sense in terms of users engagement, but the value I get from it has declined steeply over the last few years. Now I only use the messenger app.
[+] tonydiv|12 years ago|reply
I have completely hidden my news feed. Since I consider FB only to be valuable as a utility, i.e. a means of communication or a repository of information such as where someone lives, the newsfeed is a complete waste of time and useless.

My solution is to use custom CSS to hide the newsfeed, but keep everything else. As a result, I spent 1/10th the time on Facebook, and only use it when I need to get information from it.

https://medium.com/productivity-efficiency/631ed8f466e1

[+] michaelmior|12 years ago|reply
In my case, the majority of my friends only share with friends. So unfriending them all would result in mostly empty timelines for me.
[+] zk00006|12 years ago|reply
My friend had a solution to keep maximally 100 people on his account. One day, I received a message that I had to go. OK. A few months he asked me for friendship again :)
[+] dminor|12 years ago|reply
> Now when I want to know what my friends are up to, I go check out their pages, essentially going from a push feed to a pull.

I think you just invented MySpace.

[+] bencollier49|12 years ago|reply
Hmm, Facebook seems to randomly refollow people on my behalf when I try this. Perhaps it's latency or something?
[+] jeangenie|12 years ago|reply
Sounds like you're still addicted, just using a different way.
[+] alex_doom|12 years ago|reply
Exactly, event planning/tracking is the only reason I stay on.
[+] kzrdude|12 years ago|reply
Be sure to watch through to the end for the conclusion! I'll summarise:

Click farms like every page they can, far more than just the pages they were paid to like; the theory is that they will evade detection this way. Paying for "legitimate" facebook exposure will expose you to the click farms as well, and that will be the absolute majority of your gained likes. In this way facebook ads give a huge, but useless, gain in "Likes".

[+] mschaecher|12 years ago|reply
As someone who has helped massively grow a handful of businesses with Facebook being a significant channel, part of me wants to say "Yep, FB advertising is bunk. Everyone stop!"

But in reality I'd be saying that in a weak attempt to make my own Facebook advertising more effective.

Lemme tl;dr this in three bullets:

- It's far easier for non-sophisticated advertisers to waste money.

- The ad platform is pretty technical and nuanced

- Notice I didn't mention facebook in the previous two bullets? That's because it's true for anywhere you buy ads, even print or flyers, radio or direct mail.

So to reiterate: For any given paid advertising channel, it is far easier for non-sophisticated people to waste money as it is to see significant ROI. Any place you can buy ads is far more technical and nuanced than people who don't live and breath it could every imagine.

[+] TeMPOraL|12 years ago|reply
I have my pet theory. I'm yet to find significant evidence for or against it, but it's what my hunch tells me. The theory goes like this:

All on-line ads are mostly worthless - most clicks are from clickfarms, and the genuine parts are mostly by clickjacking or accidental misclicks. Almost no one really wants to buy stuff via ads. Ad agencies keep telling companies that advertising online will generate lots of revenue, but between all those messy, noisy metrics and people generally not understanding a thing about statistics it's hard to see what part of revenue can be really attributed to ads, and whether or not they're worth the money invested.

[+] kpao|12 years ago|reply
We learned this last year when we started paying for ads on Facebook. Our app is in a niche market (Flight Simulator for mobile devices), I assumed that very little people would click, but we saw a constant increase of about 1K likes/day. After looking at the analytics, I decided to cut Brazil and India. We had a huge disconnect between our App Store country data and those ads, and we also saw no noticeable change in our sales figures.

The accounts also were random like the one in the OP video, a Indian teenage girl liking a Flight Simulator? Why not... Hundreds? nope...

I feel like I've been cheated by Facebook in a way and would like my money back. They sure can find a way to figure out if those clicks are legitimate. Someone has 3K likes of random interests? That's a red flag to me.

[+] eumenides1|12 years ago|reply
In every Facebook HN post, there is always the "I deleted my FB account" and the "you can't really delete your FB data" back and forth.

Instead of deleting your account has anybody tried to "trash" your account via "Liking" everything you can and posting a large sets of unrelated pics? your info is only really valuable because its "true". if you trashed your account, its pretty much the same as deleting. also based on the filtering mentioned in this article, it seems like at some point your friends would just filter you out.

Thoughts?

[+] quadrangle|12 years ago|reply
The ad-based revenue model is fundamentally broken. Everyone needs to run Adblock and we need to figure out an economy that doesn't rely on this garbage.
[+] acangiano|12 years ago|reply
This is well known among savvy internet marketers. It's great to see someone exposing it so well for the laymen and denouncing the issue at large.
[+] at-fates-hands|12 years ago|reply
It's interesting this is still making the rounds. Back in 2010 I remember seeing articles talking about how their ad services was a total Ponzi scheme. Nice to know not much has changed. At the time I was thinking about investing some pretty large amounts of money into advertising on FB. In hindsight, I'm really glad I didn't.

http://www.jperla.com/blog/post/facebook-is-a-ponzi-scheme

[+] downandout|12 years ago|reply
There are reasons that only 6% of FB advertisers are profitable, and this highlights one of the major ones. Unfortunately Facebook has a serious disincentive to fix this - namely the loss of billions of dollars in market cap. As long as the river of cash keeps flowing, they won't make serious efforts at targeting these fake likes.
[+] nonsequ|12 years ago|reply
I'm interested in learning more about this. Does anybody have any thoughts? I think that, by intentionally posting unlikeable things, he guarantees himself 100% spam likes. On something that's actually likeable, these spam likes might be contained to a reasonably small proportion of likes. But what is the size of this shadow population of click farm users on Facebook? For these countries with large click farms to be the largest contingent of likes on big pages like David Beckham suggests they are not small enough to be manageable... I also don't know Facebook's revenue distribution well enough to gauge the business implications. Is it tilted towards small businesses that have serious trouble weeding out spam? Or is it concentrated with the large corporations that can garner large enough real audiences to ignore the spam?
[+] nayefc|12 years ago|reply
Twitter ads are pretty much the same. Never pay for ads for Twitter and Facebook. More than 98% of what you pay for goes to fraud followers.
[+] ChuckMcM|12 years ago|reply
The challenge here is the misalignment of interests. I agree with lingben that if someone can create a social network with the reach of Facebook but a better alignment of its users and advertisers, it will kill Facebook dead.

FWIW it makes an interesting way to evaluate Google+.

[+] lmg643|12 years ago|reply
can anyone from facebook comment on this? I have a hard time believing the company can hit $7.8bn in revenue per year and have this being more than an insignificant fractional percentage of the total revenue. surely major customers would have noticed by now and reduced their spend.
[+] sgaunt|12 years ago|reply
I run a dating site as a side project. For me Google ads are too expensive and I couldn't target a particular country/age/sex as in facebook. (Yeah, likes are useless. But I just wanted eyeballs.) But in December they suddenly disapproved all the ads. The official reason is they want to review and remove inappropriate ads and the advertiser has to apply again on Feb 15. Then I read elsewhere on various forums that big dating advertisers are still allowed to advertise (I can see some ads) and this is a ploy to reduce the competition for big players during Valentine's Day season. Or else why Feb 15? Whatever you say about google, at least they strive to be fair and honest. I think being fair and honest is not in facebook's DNA. (Yeah, It is a throwaway account since I still want to advertise there :( )
[+] joshfraser|12 years ago|reply
The way to advertise on FB is to use a custom audience and pass in a list of every Facebook ID / email address you want to target. Yes, it's a lot more work, but it's also the best bang for the buck if you do the hard work to figure out who you really want to reach. I've driven a lot of revenue through Facebook ads, but it requires unconventional thinking. Just like Google, the obvious advertising options are usually a total waste of money.
[+] jordan_litko|12 years ago|reply
Wow, I didn't know you could even do that. This is a great solution and sounds super powerful. Thank you.
[+] sytelus|12 years ago|reply
Why everybody seem to ruling out the idea that FB is not running click farms? Theory that professional likers are clicking Virtual Cats and Virtual Bagles just so they don't get noticed by FB policing seems ridiculous.