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Vlogger says he has proof that Facebook’s ad program is a fraud

(Social Media) Facebook has upset businesses by showing the status updates on their Pages to fewer people unless they pony up, but one vlogger says he has proof that even if you pay, the followers are illegitimate.

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Do you operate a Facebook Page?

Because you read AG, you already know that Facebook is changing their algorithm in what they called an effort to improve news feeds, surfacing “higher quality” content to users that they are more likely to click on based on their current behavior on the site, nixing memes and promoting news, based on their research indicating that users don’t want cat pictures, they want stories about Syria. Interesting.

Facebook says they’ll be displaying “relevant” articles underneath links in the news feed, so that content will be exposed to people interested in that related content, but Facebook has openly admitted that the organic reach of Facebook Pages is dropping. That means that if you have 10,000 likes, unless you pay to be seen by Facebook users, they may only show 100 people an update you post, despite 10,000 indicating they want information from you in their news feed.

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The science video blog (vlog), Veritasium took the time to create a video explanation of why the dip in organic reach is a bunch of garbage. We projected that this move by Facebook would push more businesses into the Google+ economy in coming months.

Enter the Facebook fraud allegations

Fast forward to today and Veritasium is at it again, explaining in very simple terms how they feel they have proof that the Facebook advertising program is a fraud. The tale involves testing fake Pages, analyzing user counts and their geography, and comparing these notes to the Facebook Pages of major brands. Take a ten minute break to watch the whole thing so we can discuss:

How do you feel about this? Are you in the camp that believes that Facebook is a free service, so they can do as they wish, or are you in the camp that believes this to be a fraud of unmeasured proportions?

Please tell us in the comments below your thoughts about the video and if you’ve had any similar experiences with your own Pages.

The American Genius (AG) is news, insights, tools, and inspiration for business owners and professionals. AG condenses information on technology, business, social media, startups, economics and more, so you don’t have to.

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8 Comments

8 Comments

  1. Brady Pevehouse

    February 11, 2014 at 9:13 am

    While you can’t fault Facebook for this dilemma, you would think they would be more proactive in ensuring the success of their paying advertisers. I believe this is why the Facebook trend is slowing fading. Users are tired of being hit with so many ads, and businesses (big and small) are tired of zero, real quantifiable return on investment. The value of a like is probably close to 5 cents in generated revenue in my opinion.
    So unless you are a movie star who benefits by garnering support for your premier and first week sales, what is the benefit of paid advertising on Facebook?

    Until Facebook wakes up and realizes they have diminished their real and potential value by allowing, and “PROFITING” from such practices, they will continue to be less relevant. Just my opinion..

    Could the fact that your ad campaign was depleted by users out of your specifically requested advertising area, be cause for concern. Could this be a potential class action suit due to Facebook profiting from fraudulent out of area clicks. Do you have anything that could be quantified and verified in court that countries out of your advertising areas were the known cost of your ad budget? I imagine a smart attorney may see a huge benefit in this….. if so, call me. I’ve wasted plenty of money advertising on Facebook before realizing my expense had no returns.

    • davemill

      February 11, 2014 at 2:41 pm

      “While you can’t fault Facebook for this dilemma…”
      Ummm…you believe that Facebook does not understand this reality even better than the guy in the video? They understand it , they profit from it, and therefore they are to blame. Welcome to the real world.

  2. chrisshouse

    February 11, 2014 at 5:45 pm

    Wow! Who would have thought these things up…I did not even know click farms existed. Hmmm I guess I am just not devious minded…we have already determined I am not a liar!

  3. dobeman

    February 21, 2014 at 12:38 pm

    I can see both sides, but the majority of advertisers (or the ones making the budgeting decisions) aren’t experts at Facebook advertising (and Twitter and LinkedIn and (insert social media site name here) and as much as we’d like to, we can’t all run multiple ad tests, all well-designed by talented graphics departments. It’s been obvious for more than a year what Facebook’s plans are and while my paid ads to generate significantly more interest, I doubt it’s any more than it would if Facebook actually showed my posts to my full audience.

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Social Media

Tag photos, connect with friends, order food?

(SOCIAL MEDIA) Facebook seems to be sprawling into every nook and cranny of life and now, they’re infiltrating food delivery.

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Facebook is now bringing you food! Although, no one was really asking them to.

In the age of Instagram and Snapchat, Facebook is attempting to transform into more than just a social media platform. They have partnered up with food delivery services to help users order food directly from their site.

They hope to streamline the process by giving users a chance to research, get recommendations and order food without ever leaving the site.

Facebook has partnered with their existing delivery services including EatStreet, Delivery.com, DoorDash, ChowNow and Olo in addition to restaurants to fast track the process.

The scenario they imagine is that while scrolling through the newsfeed, users would feel an urge to eat and look to Facebook for their options.

After chatting up friends via Facebook Messenger to ask for the best place to go, users would visit the restaurant’s page directly, explore their menu and decide to order. When ordering, you will have the option to use one of the partnered delivery services either with an existing account or by creating a new one.

The benefit is you stay on one site the entire time. With the time you save, the food can get to you faster, which is a plus for everyone.

Assuming that people already live on Facebook 24/7, this seems like a great update. If you like getting recommendations from your favorite social media resources, it’s even better.

The problem is that in recent years their younger audiences have dropped off in favor of other sites. Regardless of what they think, not everyone is flocking to Facebook for their every need.

My guess is that this service will benefit those already using Facebook, but is less likely to draw new audiences in.

Adding more services may not be the key to success if Facebook can’t refine their other features. They have already been criticized for their ad reporting practices, though they seem to fix everything with a new algorithm.

Facebook has continued to stray away from their original intent, and food delivery won’t be their last update.

Facebook wants to be everything, but not everyone may want the same.

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Social Media

Hate Facebook’s mid-roll ads? So does everyone else

(SOCIAL MEDIA) Those pesky ads that pop up in the middle of that Facebook video, aka mid-roll, seem to be grinding everyone’s gears.

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In an ongoing effort to monetize content, Facebook recently introduced “mid-roll” ads into videos by certain publishers, and it has now been testing that format for six months. If you aren’t a big fan of those ads interrupting your content consumption experience, you aren’t alone; publishers aren’t crazy about them either.

In a report on the program, five publishers working with Facebook’s new mid-roll ad program were sourced and all five publishers found that the program wasn’t generating the expected revenue.

One program partner made as little as $500 dollars with mid-roll ads while generating tens of millions of views on their content.

Two other partners wouldn’t specify exact revenue number, but they did acknowledge that the ad performance is below expectations. As far as cost goes, certain publishers mentioned CPMs between 15 cents and 75 cents.

That range is large because a lot of the data isn’t clear enough to evaluate their return on investment. According to the Digiday report, publishers receive data on total revenue, along with raw data on things like the number of videos that served an ad to viewers.

The lack of certain data points, along with the confusing structure of the data, makes it difficult to assess the number of monetized views and the revenue by video. For context, YouTube, as arguably the biggest player in video monetization, provides all these metrics.

Another issue is that licensing deals are cutting into margins. Facebook pays publishers, via a licensing fee, to produce and publish a certain number of videos each month. In exchange, Facebook keeps all money until it recoups the fee, after which revenue is split 55/45 between the publisher and Facebook.

While these challenges doesn’t change the fact that revenue is low, it does make it difficult to dissect costs in a meaningful way.

Why is revenue so low to begin with?

For starters, a newsfeed with enough content to feed an infinite scroll probably isn’t the best format for these kinds of ads. As a user, when I’m watching the videos and the ad interrupts the experience, I’ve always scrolled right on through to the next item on my feed. It’s a sentiment echoed by one of the publishers in the Digiday story.

Because of that, Facebook’s new Watch program, which creates a content exclusivity not found on the news feed, might produce better results in the future. Either way, Facebook will need to solve this revenue challenge for publishers, or they might pull out of the programs altogether.

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Will Facebook’s Bonfire be a hit or go up in flames?

(SOCIAL MEDIA) Facebook secretly launched a group chat app that they secretly copied from a super small company. Lots of secrets.

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As we well know, big social media and social messaging companies have a tendency to rip each other off. We’ve seen Instagram rip off Snapchat, another big player in the space.

However, what happens when a big player copies a young upstart?

Facebook appears to be doing just that. The social media giant announced a standalone group video chat app called Bonfire in July of this year. After testing, that app is now available in the Denmark App Store.

“Bonfire bears a striking resemblance to Houseparty.”

Both apps enable multi-party video chatting, complete with video effect filters (much like Snapchat). Facebook has their app synced with the Messenger feature to let potential participants know when they’ve been added to a chat. Bonfire also lets you capture snapshots of the video chat.

So, why does Facebook want to copy this startup so badly? Because the concept is a hit.

Back in 2016, Houseparty was the 7th highest ranking free app in Apple’s App store. Additionally, the app has been shown averaging a million downloads in the last 6 months. Facebook is in the business of building community, per their mission statement, and this concept is a growing epicenter of social community and interaction.

That also makes Houseparty and Bonfire a great tool for reaching a younger consumer audience more directly.

While a live event on Facebook or Instagram makes for a great general broadcast, these apps could be a great way to offer exclusive experiences to certain customers.

Imagine, if you will, the thrill of 6 fans winning a content to have a private show streamed to them by their favorite artist, followed by a Q+A session? Or, imagine a pop culture brand like The AV Club hosting an interactive discussion with fans dissecting the latest episode of Game of Thrones?

If those examples feel a little too big for you, then imagine a group of restaurant employees hosting a live discussion in several different chat rooms soliciting feedback on all parts of the experience?

The bigger point is, that level of intimacy and exclusivity works well on this platform.

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