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This Man's $600K Facebook Disaster Is a Warning For All Small Businesses

248 points by warrenmar 13y ago

therobot24 13y ago
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
kevingadd 13y ago
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...
- zerd 13y ago
  Exactly. Facebook probably sends 302 Temporary Redirect, counts it as a click, and the bot simply does not follow the Location header. Are there any ways to avoid this?
  - alextingle 13y ago
    They should put a web bug on the target page to confirm the redirect was completed.
    - mcherm 13y ago
      Except that the contract prohibits doing this sort of "third party audit".
      - alextingle 13y ago
        I mean Facebook should put a web bug on the target page.
        mcherm 13y ago
        But Facebook is benefiting from the problem! At least in the short term, until it harms their reputation in the advertising market.
- tempestn 13y ago
  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.
  - mehwoot 13y ago
    It sounds like the ads were directed at Facebook pages. I don't think so, the article says After all, these are not clicks on a mere Facebook page, these are users who clicked through to an off-Facebook site. I.e. the link that the user would go to after clicking the ad would be an off-facebook site, not a facebook page.
    - tempestn 13y ago
      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.
- jrs235 13y ago
  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....
- fblp 13y ago
  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..
maresca 13y ago
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. Fake it until you make it.
- interpol_p 13y ago
  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.
  - mildtrepidation 13y ago
    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.
    - _delirium 13y ago
      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...
rrradical 13y ago
Seems odd that Facebook didn't pursue the huge bill he wouldn't pay. Is it too much to assume they wouldn't want the details to come out in court?
- jimmytidey 13y ago
  This... It at least seems to show a lack of faith in your product if you sometimes don't worry about collecting payment.
- cmapes 13y ago
  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.
  - gus_massa 13y ago
    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.
- alextingle 13y ago
  I think it tells you everything you need to know about how much faith Facebook have in their own product.
- 7952 13y ago
  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?
duskwuff 13y ago
There's one part of this I still don't get, though. Where's the motive in running Facebook "like" farms?
- sheriff 13y ago
  The motive for running the farm is because some people will pay for the likes. The motive for someone running a farm to also send likes to non-customer pages is to make it harder for Facebook to detect the fraudulent likes.
- DivByZero 13y ago
  The motive is that with these farms they then sell dumb users "100.000" likes for 10$ ... and people actually buy them. Nowadays I receive more FbLikes spam than Viagra's
tlrobinson 13y ago
Here's a good (but long) video that goes in depth into why they believe this happens https://www.youtube.com/watch?v=oVfHeWTKjag https://www.youtube.com/watch?v=oVfHeWTKjag 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...)
- johnvschmitt 13y ago
  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.
  - georgemcbay 13y ago
    Also 1% of 1.23 billion[1] is 12.3 million. Which might only be 1% of the total users but is still a very, very large number of fake people. [1] http://www.theguardian.com/technology/2014/feb/04/facebook-10-years-mark-zuckerberg http://www.theguardian.com/technology/2014/feb/04/facebook-1...
    - alextingle 13y ago
      Yeah, and the 1.23 billion is going to be mostly ghost accounts anyway. People who check their FB once a week, if ever.
  - rikf 13y ago
    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.
DivByZero 13y ago
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!
- maresca 13y ago
  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.
  - DivByZero 13y ago
    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 :)
ye 13y ago
Who the hell just runs a $100K/day campaign without any testing? Fool and his money are soon parted.
x0054 13y ago
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...
- whitef0x 13y ago
  Well poor zucky has to make his money in some way! Especially after the big dent in the budget due to WhatsApp .
  - zebra 13y ago
    For those not finding 'zucky' in the dictionary - this is the pet name of Zuckeberg.
    - SixSigma 13y ago
      Those not finding 'Zukeberg' in the dictionary - it's a misspelling of Zukerberg
      - choult 13y ago
        For those not finding Zuckerberg in the dictionary, he founded Facebook.
        kleiba 13y ago
        HN must really be on the decline :(
        choult 13y ago
        Humour must really be on the decline :P To the downvoters: ah well :)
        dasil003 13y ago
mgkimsal 13y ago
"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".
- jamesaguilar 13y ago
  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.
  - uptown 13y ago
    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.
    - sparkzilla 13y ago
      AKA: The Groupon Effect
- nahname 13y ago
  Or we just discovered how useless the marketing metrics for a large number of companies can be. Probably a couple product ideas in this problem...
rokhayakebe 13y ago
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.
im3w1l 13y ago
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.
flowerntea 13y ago
fake
callmeed 13y ago
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.
ypodeswa 13y ago
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.
sidcool 13y ago
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.
poopsintub 13y ago
It sounds like the all too common case of a business owner who has no idea what they're doing.
TallboyOne 13y ago
Only an idiot would spend $600k in a few days without testing. That's just painful to read.
drakaal 13y ago
Even if Facebook was a scam... You don't put $600k in before you know what you get out of every dollar you put in. This is why you outsource your SEO/SEM/ Social Marketing. (To someone reputable who is results driven/incentivized ) He needed someone to say, "hey look you put $5 in you got 10 cents out. Time to move on" before he got to $600k in spend.
genofon 13y ago
As highlighted before in the top topic on reddit of the past weeks (VIDEO) http://www.youtube.com/watch?v=oVfHeWTKjag http://www.youtube.com/watch?v=oVfHeWTKjag
mcfunley 13y ago
> "At one point, data from Facebook indicated his ads had delivered 606,000 clicks, but the site itself registered only 160,000 incoming clicks" My initial reaction is that this guy is confusing "clicks" with "visits" or possibly "unique visitors." Counting things is hard.
snorkel 13y ago
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.
reppic 13y ago
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/ https://developers.facebook.com/x/bugs/147185208750426/
hrjet 13y ago
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.
cwaniak 13y ago
Well, if you your whole business model depends on "Facebook likes" 100%, you are asking for it…
gregpilling 13y ago
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.
snizzysnaps 13y ago
Only a complete IDIOT would trust Zuckerberg and pay him $600k snaps for his BS marketing service. The Winklevi are tools, but Zuck did steal Facebook from them. He's the modern Steve Jobs: a very successful thief.
auctiontheory 13y ago
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.
- pconf 13y ago
  >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?
Silhouette 13y ago
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.
- notlisted 13y ago
  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? [1] https://news.ycombinator.com/item?id=7212715 https://news.ycombinator.com/item?id=7212715 Full discussion here: https://news.ycombinator.com/item?id=7211514 https://news.ycombinator.com/item?id=7211514
jokoon 13y ago
I hope this gets traction, I really do want the facebook stock to drop.
HannibalLecter 13y ago
Facebook is an untrustworthy company.
raphaelj 13y ago
I don't understand why someone would put resources to make fake likes/clicks. What's the deal ? A concurrent who wants to discredit Facebook' Ad service ?
yesplorer 13y ago
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.
- jonknee 13y ago
  > 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.
colinplamondon 13y ago
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.
- downandout 13y ago
  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.
  - 13y ago
richardw 13y ago
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.
al2o3cr 13y ago
Terrible title. Better one: "This Man's $600k FB Disaster Is a Warning For All Morons Who Try Arbitraging Ad Networks"

248 points by warrenmar 13y ago

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

kevingadd 13y ago

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...

zerd 13y ago
Exactly. Facebook probably sends 302 Temporary Redirect, counts it as a click, and the bot simply does not follow the Location header. Are there any ways to avoid this?
- alextingle 13y ago
  They should put a web bug on the target page to confirm the redirect was completed.
  - mcherm 13y ago
    Except that the contract prohibits doing this sort of "third party audit".
    - alextingle 13y ago
      I mean Facebook should put a web bug on the target page.
      - mcherm 13y ago
        But Facebook is benefiting from the problem! At least in the short term, until it harms their reputation in the advertising market.
tempestn 13y ago
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.
- mehwoot 13y ago
  It sounds like the ads were directed at Facebook pages. I don't think so, the article says After all, these are not clicks on a mere Facebook page, these are users who clicked through to an off-Facebook site. I.e. the link that the user would go to after clicking the ad would be an off-facebook site, not a facebook page.
  - tempestn 13y ago
    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.
jrs235 13y ago
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....
fblp 13y ago
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..

maresca 13y ago

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. Fake it until you make it.

interpol_p 13y ago
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.
- mildtrepidation 13y ago
  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.
  - _delirium 13y ago
    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...

rrradical 13y ago

Seems odd that Facebook didn't pursue the huge bill he wouldn't pay. Is it too much to assume they wouldn't want the details to come out in court?

jimmytidey 13y ago
This... It at least seems to show a lack of faith in your product if you sometimes don't worry about collecting payment.
cmapes 13y ago
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.
- gus_massa 13y ago
  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.
alextingle 13y ago
I think it tells you everything you need to know about how much faith Facebook have in their own product.
7952 13y ago
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?

duskwuff 13y ago

There's one part of this I still don't get, though. Where's the motive in running Facebook "like" farms?

sheriff 13y ago
The motive for running the farm is because some people will pay for the likes. The motive for someone running a farm to also send likes to non-customer pages is to make it harder for Facebook to detect the fraudulent likes.
DivByZero 13y ago
The motive is that with these farms they then sell dumb users "100.000" likes for 10$ ... and people actually buy them. Nowadays I receive more FbLikes spam than Viagra's

tlrobinson 13y ago

Here's a good (but long) video that goes in depth into why they believe this happens https://www.youtube.com/watch?v=oVfHeWTKjag https://www.youtube.com/watch?v=oVfHeWTKjag 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...)

johnvschmitt 13y ago
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.
- georgemcbay 13y ago
  Also 1% of 1.23 billion[1] is 12.3 million. Which might only be 1% of the total users but is still a very, very large number of fake people. [1] http://www.theguardian.com/technology/2014/feb/04/facebook-10-years-mark-zuckerberg http://www.theguardian.com/technology/2014/feb/04/facebook-1...
  - alextingle 13y ago
    Yeah, and the 1.23 billion is going to be mostly ghost accounts anyway. People who check their FB once a week, if ever.
- rikf 13y ago
  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.

DivByZero 13y ago

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!

maresca 13y ago
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.
- DivByZero 13y ago
  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 :)

ye 13y ago

Who the hell just runs a $100K/day campaign without any testing? Fool and his money are soon parted.

x0054 13y ago

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...

whitef0x 13y ago
Well poor zucky has to make his money in some way! Especially after the big dent in the budget due to WhatsApp .
- zebra 13y ago
  For those not finding 'zucky' in the dictionary - this is the pet name of Zuckeberg.
  - SixSigma 13y ago
    Those not finding 'Zukeberg' in the dictionary - it's a misspelling of Zukerberg
    - choult 13y ago
      For those not finding Zuckerberg in the dictionary, he founded Facebook.
      - kleiba 13y ago
        HN must really be on the decline :(
        choult 13y ago
        Humour must really be on the decline :P To the downvoters: ah well :)
        dasil003 13y ago

mgkimsal 13y ago

"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".

jamesaguilar 13y ago
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.
- uptown 13y ago
  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.
  - sparkzilla 13y ago
    AKA: The Groupon Effect
nahname 13y ago
Or we just discovered how useless the marketing metrics for a large number of companies can be. Probably a couple product ideas in this problem...

rokhayakebe 13y ago

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.

im3w1l 13y ago

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.

flowerntea 13y ago

fake

callmeed 13y ago

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.

ypodeswa 13y ago

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.

sidcool 13y ago

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.

poopsintub 13y ago

It sounds like the all too common case of a business owner who has no idea what they're doing.

TallboyOne 13y ago

Only an idiot would spend $600k in a few days without testing. That's just painful to read.

drakaal 13y ago

Even if Facebook was a scam... You don't put $600k in before you know what you get out of every dollar you put in. This is why you outsource your SEO/SEM/ Social Marketing. (To someone reputable who is results driven/incentivized ) He needed someone to say, "hey look you put $5 in you got 10 cents out. Time to move on" before he got to $600k in spend.

genofon 13y ago

As highlighted before in the top topic on reddit of the past weeks (VIDEO) http://www.youtube.com/watch?v=oVfHeWTKjag http://www.youtube.com/watch?v=oVfHeWTKjag

mcfunley 13y ago

> "At one point, data from Facebook indicated his ads had delivered 606,000 clicks, but the site itself registered only 160,000 incoming clicks" My initial reaction is that this guy is confusing "clicks" with "visits" or possibly "unique visitors." Counting things is hard.

snorkel 13y ago

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.

reppic 13y ago

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/ https://developers.facebook.com/x/bugs/147185208750426/

hrjet 13y ago

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.

cwaniak 13y ago

Well, if you your whole business model depends on "Facebook likes" 100%, you are asking for it…

gregpilling 13y ago

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.

snizzysnaps 13y ago

Only a complete IDIOT would trust Zuckerberg and pay him $600k snaps for his BS marketing service. The Winklevi are tools, but Zuck did steal Facebook from them. He's the modern Steve Jobs: a very successful thief.

auctiontheory 13y ago

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.

pconf 13y ago
>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?

Silhouette 13y ago

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.

notlisted 13y ago
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? [1] https://news.ycombinator.com/item?id=7212715 https://news.ycombinator.com/item?id=7212715 Full discussion here: https://news.ycombinator.com/item?id=7211514 https://news.ycombinator.com/item?id=7211514

jokoon 13y ago

I hope this gets traction, I really do want the facebook stock to drop.

HannibalLecter 13y ago

Facebook is an untrustworthy company.

raphaelj 13y ago

I don't understand why someone would put resources to make fake likes/clicks. What's the deal ? A concurrent who wants to discredit Facebook' Ad service ?

yesplorer 13y ago

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.

jonknee 13y ago
> 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.

colinplamondon 13y ago

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.

downandout 13y ago
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.
- 13y ago

richardw 13y ago

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.

al2o3cr 13y ago

Terrible title. Better one: "This Man's $600k FB Disaster Is a Warning For All Morons Who Try Arbitraging Ad Networks"