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Technology

Experiment Alleges Facebook is Scamming Advertisers out of Billions of Dollars

The world's largest social media network is scamming advertisers out of billions of dollars, according to a popular science blog who put Facebook's paid reach system to the test.

Posted February 10, 2014 by William Vaughns

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Facebook Like Brownie. Photo Credit: Flickr / andreasivarsson (CC)

Facebook Like Brownie. Photo Credit: Flickr / andreasivarsson (CC)

The world's largest social media network is scamming advertisers out of billions of dollars, according to a popular science blog who put Facebook's paid reach system to the test.

A video posted to Veritasium's YouTube channel Monday alleges that Facebook's advertising model - designed to generate page likes, and increase post engagement - is flawed.

Veritasium made the discovery after purchasing Facebook ads for its own page, increasing its likes from more than 2,000 to 70,000 in just a few days yet noticed no change in page views, resulting in a lower post engagement. The vast majority of likes generated by purchasing Facebook ads are fake users, says Veritasium, most likely spawned from "like farms" where users are paid to like pages.

The video notes a similar experiment by Rory Cellan-Jones, who managed to generate 3,000 global likes on a Facebook page that does “absolutely nothing” by purchasing ads through the site.

The U.S. State Department spent over $630,000 to increase Facebook "likes" for four of its pages on the social-networking site, according to an inspector general's report released in July 2013. The IG found that the number of Facebook users who actually engaged with each page was relatively small, with only about 2 percent “liking,” sharing or commenting on any item within the previous week.

Ironically, Facebook suppresses the reach of pages with low post engagement, according to the video, forcing page administrators to pay again to reach more fake fans in hopes of reaching a few real ones.

“Wherever you’re targeting, advertising your page on Facebook is a waste of money,” the video states. “I wish Facebook would remove the fake likes from my page and from all the others — but that would mean admitting that they’ve generated significant ad revenue from clicks that weren't genuine.”

Facebook joined an elite group of tech companies — including Amazon and Google — when it surpassed a market value of $100 billion in August 2013. The world’s largest social network recently reported record earnings for its 10th birthday, surpassing analysts' expectations with revenue increasing in Q4 2013 to $2.59 billion from $1.59 billion a year earlier.

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9 Comments

Maurice Colontonio (guest)  February 13, 2014
I also advertised and shut it off after a few months because I was getting all kinds of clicks from people who didn't fit my advertising constraints at all. Young kids, people in states I didn't specify, etc. Big waste of money, and not a single dollar of revenue generated.
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Colin (guest)  February 11, 2014
From my experience advertising on FB, results can vary but it is absolutely possible to get real users and engagement. From a small £10 one off spend one of my articles generated 1000s of Likes over a 3 month period - because it was awesome content and kept being reshared.
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Sean (guest)  February 11, 2014
No one actually watched the video, huh? It's a byproduct of clickfarms trying to stay undetected. Facebook isn't scamming anyone. And you don't 'buy likes' from Facebook, you buy screen space on your audience's monitor.
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adam (guest)  February 11, 2014
Seriously? Did you watch the video? The WHOLE way through?
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labellawaco (guest)  February 11, 2014
Well I feel stupid. Going to cancel my ad right now...
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Randy Deresti (guest)  February 11, 2014
I'm a middle man for a click farm and I can assure you there is no difference if you buy likes from facebook or my clickfarm the only difference is I charge 70% less.
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Joe (guest)  February 11, 2014
Well thats good. At least you charge 70% less for a completely worthless service.
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Marketeer (guest)  February 11, 2014
It's worthless to an extent. Many people are more inclined to like a page that has 10k likes opposed to say 1k. So fake likes may be helpful to a new page but you do risk lowering your engagement like the video states.
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Matt (guest)  February 11, 2014
I've wasted a lot of money building up a page with facebook only have EXACTLY this issue. Zero engagement even though my content was engaging on other platforms. Facebook now shows my content to between 0.001% and 0.02% of my audience for free before forcing me to pay. Both experiences have resulted in a categoric loss of all marketing revenue spent. ROI = 0%.. I now advise everyone never to waste time with FB pages...
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Al (guest)  February 11, 2014
Same thing happens with Youtube. I paid a company $15 to increase viewings and the viewing number jumped from 15 to about 3000. I know 3000 people did not see that video.
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Marc (guest)  February 11, 2014
I love how people aren't realizing that when you like a Facebook page, 90% of the time you do it on the side of your news feed and never go to that page at all.
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LongDuckDong (guest)  February 11, 2014
That is pathetic. This company is a joke and won't be around much longer. It's nothing more than MySpace v 2.0
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ironman09 (guest)  February 11, 2014
yea, and Google+ will probably follow Facebook's path. Seems like all these sites are only good for about a decade.
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Al (guest)  February 11, 2014
a decade? That long.
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