In the inventively produced video below, science blogger Veritasium accuses Facebook of participating in fraud by taking money for advertising and then turning a blind eye to illegal “click farms.”
The video contends that there’s a massive and unspoken problem with Facebook’s paid advertising system, where the social giant trades marketing reach for money.
Businesses depend increasingly on social marketing to spread their message in the new internet based economy. Social networking is now the biggest online activity in America. The average American spends 37 minutes on social sites each day. 46% of internet users seek information from social media before making a purchase. Marketers will spend $3.3 billion on social marketing in 2015.
Is Money Spent on Facebook Worth It?
But is Facebook spending worth it? The video below presents a strong case that advertising on Facebook isn’t worth the money. The video poses a ton of questions about Facebook ad money and shares some really mind-blowing science.
Facebook advertising works by letting companies pay money to get more views for a Facebook advertisement, product page, business page or Facebook post. For example, a safety video production business might pay Facebook $100 to spread an advertisement about a new safety video to 5,000 Facebook users. The ads can be targeted, so the business can choose only to share the ad with people interested in safety, such as Human Resources personnel.
Alternately, a whitewater rafting company might spend money to get more views or likes for a fun whitewater video they’ve shared. The theory is that the fun video will engage more customers, who will then think more about the fun they had on their last rafting trip. This can increase the chances they’ll book future business with the company. That’s how it’s supposed to work anyway.
How Click Farms May Waste Facebook Money
The video, however, contends that there’s a serious flaw in the process. Namely, there are “click farms” out there that people can pay to generate fake Facebook likes. Someone can pay $100 to a click farm and get 4,000 instant likes.
The fake likes come from people in developing countries who might make $1 for 1,000 likes.
Facebook Ad Money Doesn’t Go to Click Farms But…
When someone pays Facebook to promote a product, service, business, page or post, Facebook doesn’t use the click farms to deliver them. Instead, when an advertiser pays money for Facebook outreach, the money goes toward generating legitimate likes, at least in principle. But something else is going on.
The researcher in the video discovered that the bulk of the traffic he was paying for was coming from developing countries and was generating zero engagement. In other words, while most of his Facebook likes were coming from the developing world, none of those Facebook users were then liking or commenting on other posts on his pages.
The researcher has a theory about what’s actually going on. His theory is that click farms are “liking” pages that pay for legitimate likes in order to hide their illegal status from facebook.
Unpaid Click Farm Likes May Waste Facebook Ad Money
It’s likes generated by click farms in attempts to hide from facebook that are muddying the Facebook advertising system. A company that pays Facebook for legitimate advertising might see its ad buy used up very quickly by clicks from illegal click farms in the process of trying to appear legitimate. The click farms thereby ensure the company’s Facebook ad money gets wasted.
Facebook isn’t actively participating in the fraud according to the video. However, the video points out that Facebook ultimately sees a financial benefit from the participation of the click farms. That is, if a company pays money to promote a post or page or ad on Facebook and then sees instant results, they may think they’ve got their money’s worth and spend more in the future.
Virtual Cat Ads Show How Facebook Ad Money Gets Wasted
To test the theory that money spent on Facebook advertising is generally wasted, the video’s producer created a Facebook page called “virtual cat.” The page’s stated purpose is to be, “worthless and annoying.” The page itself proclaims, “Only an idiot would like
this page.” A paid Facebook ad that pushed the worthless page quickly brought in a high number of likes, but no engagement. In other words, posts on the site received no likes or comments from the Facebook users who had liked the site, despite posts pleading with the users to participate in the experiment.
The science site Veritasium is devoted to creating engaging science videos. The site’s name may sound like an over the counter nutritional supplement, but it’s derived from the Latin word for “truth.” According to the site, the first principle of science is, “You must not fool yourself.”
The video’s stance that Facebook advertising isn’t worth the money seems to be borne out by other research. An article on TechHive.com put the social media giant’s paid ads system through the wringer and found that while money spent on advertising on the social giant’s website did generate a lot of “reach,” that didn’t translate to a lot of customers.
In Defense of Facebook Ad Money
Apparently not everyone thinks paying for increased reach is a waste of money. Social marketing guru Jon Loomer has published an article debunking the video we posted above. He calls the video’s science into question. His main argument with the video’s methods is that the marketing conducted by Veritasium was poorly conceived and poorly executed. He says the ad campaigns weren’t properly targeted. He also says the video’s results were based on Facebook’s money-for-ads system as it existed in 2012 and that the system has changed significantly since then. Loomis says the video’s sample sizes were too small and that from his own experience and research, the ads do work.
While Loomis doesn’t deny that there are problems with the way Facebook delivers ad reach for the money customers pay in, but he says it’s not hard to get around them. He says the right way to make social media money count is through proper ad targeting.
A Facebook Ad Money Case Study
At least one marketing department thinks Facebook ads are worth the money. Whitewater rafting and outdoor adventure company ACE Adventure Resort uses Facebook ads regularly to increase their reach and engage their customers. Social marketing manager Brandi Warwick ways the money they’ve spent on ads with the social giant has seen real returns.
“Thanks to Facebook ads, we’re able to reach a larger market with a smaller budget,” says Warwick. “One example which recently worked well for us was a simple 30 second video showcasing our Adventure Play Park & Lake. With a short run time (less than a week) and a budget of $350 our reach was just over 600,000 and our engagement hit almost 50,000. We simply wouldn’t be able to hit those numbers utilizing any other form of digital advertising.”
Facebook Fraud Response: Are Facebook Ads a Waste of Money? – JonLoomer.com