

Do Not Advertise On Facebook Until You Read This - slaven
http://wahanegi.com/do-not-advertise-on-facebook-until-you-read-this/

======
erik_larson
I wrote this blog posting. I am not claiming that these are bots or that
Facebook is defrauding us in the strict legal sense. After a bunch of
research, I believe they are real people, as Facebook asserted to me and to
the BBC among others. However, I believe Facebook is misleading advertisers
and behaving unethically by not disclosing this fairly widespread, unusual and
costly user behavior, one that hits the campaigns of less sophisticated small
advertisers particularly hard.

The problem has two main parts:

1) The click behavior of these users is _extremely_ unusual and unexpected
according to the beliefs of the advertisers and advertising experts I have
shared these finding with. Most people think that 'no one clicks on FB ads.'
So when they learn there are profiles of real people that click 5-6 likes in a
minute, dozens of times a day adding up to thousands of times a year, they
immediately exclaim 'no one does that, they must be bots, you must be wrong.'
But they are real people. And unless you are extraordinarily careful (see
here: <http://wp.me/p2dKfK-7x>), Facebook naturally charges the same for their
clicks as for everyone else, even though their clicks are nearly meaningless
from an advertiser perspective.

2) These real people were taught this behavior by the new Facebook timeline
interface, which a) makes the number of 'Likes' extremely prominent, b)
encourages rapid liking of ads by refreshing the ads immediately as they are
clicked and c) uses these likes to change the content that appears in the
stream of stories.

Perhaps a better one of my postings to read is this one, where I estimate how
widespread the problem may be from an advertiser perspective
<http://wahanegi.com/10-percent-of-fb-revenue/>. To save you time, here is the
main bit, a quote from one of these users after I asked them why they like ads
in batches of 5-6 throughout the day:

"Yes, I do remember why I liked things in batches. Facebook suggests things
for you to like in the right column on some pages. As soon as you click to
like one of them, it replaces it with another suggestion. I’m quite happy to
like thousands of things on Facebook as it improves the kind of stories and
ads that come up in my news feed and again in the right column. I would rather
see things I am interested in than things I’m not."

Makes sense for him. But not so much for a small advertiser who just paid
Facebook a few hundred or a few thousand bucks so that Facebook could use the
ads like click-bait for: people aiming to hone their Edge Rank content
preferences, people who are bored and enjoy choosing which ads they like best
in the list, or people who want to get their Likes 'score' higher because it
gives them a sense of accomplishment.

Trust me, once an small advertiser learns that there are two types of people
on Facebook, and they get charged the same amount for clicks from each, they
are not happy. Especially after Facebook customer service gives them the
Heisman.

;)

~~~
dasil003
I don't know if things are as clear-cut as you posit, but I definitely
appreciate the research and attention you've put into this.

Whether it's ethical or not, everyone is coming to the realization that
Facebook ads suck. There have been many explanations, mostly of the hand-wavy
variety surrounding the intent of users on a social network vs a search
engine, but this is the first theory I've heard about how the mechanics of
Facebook itself are creating specifically low-value classes of users.

Now obviously you're never going to get an honest response from a customer
service rep as their hands are tied. However, if Facebook are smart, their top
ad guys are deep at work investigating your claims. Being able to increase the
real value of clicks is absolutely essential for the future growth of
Facebook's ad platform. If they jealously guard the information gap, then it
will hurt them badly as everyone comes to their own conclusion that Facebook
ads are worthless. They need to make sure that doesn't become the conventional
wisdom.

------
patio11
This is a new spin on an old phenomenon. For banner advertising, a _tiny_
percentage of the population (< 10%) contributes a _massive_ percentage of all
display ad clicks (> 80%). She's disproportionately a lower-middle to lower-
income older American female in the Midwest who plays the lottery and
subscribes to Reader's Digest. _Totally_ not joking. A word often used to
describe this segment is "compulsive clicker."

Online publishers are well aware of this and, well, do not go out of their way
to highlight this fact on their rate cards. Instead they'll provide their
audience information and often do not mention that they know their typical
click is not representative of their audience. Given that they're the "whales"
of the CPC business model, they're frequently _not_ quality-priced down to
zero, unless they so dominate an advertiser's campaign that the advertiser
complains.

There are related issues with almost all online advertising. One should be
very attentive to the default settings at one's major advertising network of
choice, because the default settings almost always group the prime rib cut of
the attention market with the pink slime and sell it at prime rib prices.
(Examples: there are strong differences in pricing with regards to user
location. Many advertising platforms, ahem, make it very straightforward for
American advertisers to advertise their wares to users in developing markets.
All you have to do is not opt out.)

~~~
pikewood
What is the reasoning behind this type of behavior? Is it that she is very
susceptible to the techniques used in banner ads (animated dancing mortgage
people, "one weird trick", etc.)? Or does she have some OCD behavior of
clicking all the links on a page?

In the OP's case, I can see the motive of the Like-collecting mindset, but
with the compulsive clickers, I'm imagining someone who clicks on ads for no
reason other than a compulsion to "complete the page".

~~~
curveship
My wife grew up in Oklahoma, and there are several women in her extended
family who fit the profile. I've been watching how her family interacts with
technology for over a decade now. The behavior cited in the article makes a
lot of sense to me.

First, a warning: it would be a big mistake to think these women are
technologically backwards. They _love_ computers and the internet. They were
installing wifi routers years before my own East Coast elite-educated family.
My wife's sister has 5 iphones for 4 family members, half of them are
jailbroken.

Part of what they love about the net is that it makes them feel _modern_ and
_included_. They're no fools. They see the money, the power, the TV all
emerging from NYC and LA. They know that the most their town has produced is a
country singer with a chip on his should (Toby Keith).

Going online, by contrast, feels cosmopolitan, sophisticated, like they're "in
it," in the modern world. (There's a similar phenomenon with chain
restaurants: Oklahomans _love_ chain restaurants, because it's the same meal
you could get anywhere.)

So having heard all the buzz about the net, they go online and ... well, here
the paths diverge. The younger and/or savvier become sort of power-consumers.
Like my sister in law with the jailbroken iPhones. She can quote you all the
specs and all the industry-celebrity gossip, and there are at least a dozen
USB devices hanging off her computer.

But the older and/or less savvy, they equate the net with buzz, so when they
go online, they go to its buzziest parts: banner ads, scams, get-rich-quick
schemes, "empowerment" classes, etc.

They click the banner ads because they think that's what you're "supposed to
do" on the net, and doing so makes them feel a part of the modern world.
They're not stuck in a fly-over state, they're right in front of the busy
modern world, right there on their computer screen.

------
nhashem
I haven't advertised on Facebook myself, but this is is an interesting
concept. If it's broadly true and that Facebook essentially has two "classes"
of users, then it's up to them to price them segment and price them
effectively for advertisers.

This reminds me of Paul Graham's essays about Viaweb's acquisition by
Yahoo[0][1], and how Yahoo seemed mostly uninterested in PG's algorithms for
Revenue Loop. To quote: "In 1998, advertisers were overpaying enormously for
ads on web sites. In 1998, if advertisers paid the maximum that traffic was
worth to them, Yahoo's revenues would have _decreased._ "

I remember when AdSense ads used to be images and Google replaced them with
text links, essentially reducing the clickable surface area of the ads. This
essentially slashed revenue in the short term with the theoretical long-term
benefit of reducing accidental clicks and increasing the value of the clicks
they did send to advertisers, who should then be willing to pay more. As a now
public company, it will be interesting to see which path Facebook follows.

[0] <http://paulgraham.com/6631327.html> [1]
<http://www.paulgraham.com/yahoo.html>

------
iamdave
I seem to be greatly misunderstanding the issue here, and thus I apologize in
advance if this seems like a massive, and possibly dismissive
oversimplification but the complaint here is that there are overeager users
who are clicking on ads, not knowing what they're clicking, and because of
this the author/campaign manager is owed a refund?

Unless Facebook, using the logs they've requested can conclusively _prove_
that these are bot profiles aimed at disrupting the Ad Platform (which is
something I would assume Facebook would already be keenly aware of and taking
excruciating steps to stamp out, as Ads play a big role in their bottom line),
why exactly does the author feel he's entitled to a refund just because people
click the ad who might not be interested in the product?

Again, unless Facebook can show these were malicious bots or that their
targeting algorithm has malfunctioned and displayed ads to profiles that do
not meet the demographic criteria setup by the campaign manager and thus, ads
are being displayed to users they shouldn't be and resulting in erroneous
clicks, what's gone wrong?

~~~
ghshephard
Because the clicks by these "clickants" are worthless, and shouldn't be sold.
Somebody blindly clicking on ads has no value, and you shouldn't be selling
their clicks. It's akin to selling advertising on TVs that happened to be fast
forwarded/skipped on Tivo. If the advertisers are aware from DVR logs that
fewer people saw the logs, they need to reflect that in reduced costs to the
advertisers by reducing bill-rates over time.

~~~
iamdave
The Tivo analogy makes sense. Thanks for clearing that up, I figured initially
that I was misunderstanding the point of the post and your analogy fixed it.

------
nl
I suspect at least some of these "booklicant" users are people attempting to
build up fake profiles that look real.

They do this by liking a lot of advertisers, which makes their profile look
more populated.

~~~
endianswap
Thank you, I couldn't think of a scenario where individuals would want to
automate ad clicking on Facebook, but this makes complete sense.

------
ben1040
If you post an email chain, please, post the messages in timestamp order.

It's a little annoying when you need to scroll all the way down to identify
the beginning of the discussion, and then have to read from bottom to top to
see the exchange as it unfolds.

~~~
erik_larson
Sorry about that. At the time I posted this, I just wanted to get it out in
the world and move on. I felt (and feel) that Facebook had already wasted
enough of my time. If I knew that ten thousand people were going to read it in
a single day, I assure you that I would have spent more time editing it to
give you a better experience.

------
ghshephard
I read though this missive - and the first thing that came to my mind was the
definition that "more than six clicks a minute is considered invalid" - and I
tried to recall if there was a time in the past year that I clicked on six
display ads in a day.

I then realized that, when I'm searching to purchase something on Google, I
may click on half a dozen ads in a minute - but realistically, each of those
has a chance at getting $20-$40 worth of revenue (and the potential, as in the
case of monoprice, of hundreds, if not thousands of dollars of revenue after I
discover the site)

I'm wondering if anybody has done a definitive study on the conversion value
of a "click" on google versus Facebook, both in terms of brand recognition,
immediate conversion (purchase), and long term conversion (delayed purchase) -
that study, if definitive, would probably adjust GOOG/FB by 10s of billions of
dollars - clearly a leading indicator of future revenue.

~~~
Tooluka
> "when I'm searching to purchase something on Google, I may click on half a
> dozen ads in a minute"

People really do that? Not search for some specialized site and ask/search
there but actually click on ADs to buy useful things?

~~~
mst
Absolutely -a company that actively wants to pay for me to see their existence
when I'm searching for somthing is a company that actively wants me to buy it
there; that's often a valuable indicator that they're worth considering as a
supplier.

I'd say when I search for something I'm intending to buy on google, somewhere
between a quarter and a third of the time I buy it via an adsense link rather
than an organic search link. Anecdata worth every penny you paid for it, as
always, but I've said this conversationally to a fair few people and the
majority have said something more like "yeah, me too" than "people really do
that?"

~~~
brk
Just as another anecdata point, I'm in the 'people really do that.' group.

When I'm researching something to buy, I will usually do searches on google
for broad scope brands/products, then move to Amazon as my first option for
purchase, provided the item is available there and within a few % of the
lowest online price I've seen elsewhere.

My research may include reading blogs/forums, and possible asking questions
there. If its not something too esoteric, I might ask my FB friends for an
opinion or suggestion.

At no point in my normal buying processes does FB ads, or 'Likes' play any
role.

My wife follows roughly the same pattern, but may be partially influenced by
my approach, though I will say her methods differ slightly enough that they
are her own.

------
trung_pham
I have a feeling if this thing does not stop spreading, then expect Facebook
stock to drop by 50% on their next earning report...

Advertisers will cut their budget and that will kill Facebook revenue. Well,
maybe start a short position?

------
yaix
This is how you do it:

(a) Estabish what you spend on ads per visitor.

(b) Establish what you earn per visitor coming from ads.

(c) Only if (a) minus (b) is positive, continue running the ads.

However, Facebook should have a look at this issue. It is the reasong why
Google's AdWords is so successful, and most other self-service ad programs
fail. AdWords is very good in filtering everything that does not represent a
value for the costumer (the advertising web site).

------
vibrunazo
Can anyone here tell me if this bot problem is common on other ad networks, or
is the 80% bot click rate much higher on Facebook? Because maybe it's just a
common hard problem to solve for ad networks. Or maybe it's Facebook who
specifically have a problem. If it's the former, then advertising somewhere
else wouldn't solve the problem for advertisers. But I cannot know for sure
without knowing if this 80% bot rate is common in others networks too or not.

I do know that many people reported lower conversion rates on FB, but they
usually attribute that to lower purchasing intent from real FB users, not from
higher bot rate. Or are they simply mistaken?

~~~
dangrossman
It's not common on other networks _or on Facebook_. This is likely an isolated
incident. I've been advertising on Facebook for months and >80% of the clicks
show up in my own stats, not <20%. If advertisers were regularly being billed
for 5x the ad clicks they actually received, this wouldn't just be coming out
now.

~~~
nl
I've done some minor advertising on Facebook too, and I've never seen anything
like this either.

------
tylermenezes
That first email is 2,500 words. I'd be really impressed if anyone from
Facebook actually read through the entire thing. It's appropriate for a blog
post, but not for an email.

~~~
Cass
When it comes to the advertising giants, it's not a bad strategy to write a
blog post but send it as an email first. Realistically, no matter how long or
short your email is, you're unlikely to get a helpful response from either
google or facebook to your problem, especially if that problem is on the scale
of "You need to change your entire ad algorithm (and also give my money back)
- unless you somehow manage to turn the issue into a PR problem for them, by,
for example, getting it on the front page of hacker news.

You're more likely to get on the front page of hacker news if you can show
that FB is aware of the problem but doesn't care to make any changes, which
you can do by posting the email exchange. And you're also more likely to get
the HN readers interested in an email that's basically a meaty blog post than
in a short exchange that goes "Your algorithm sucks and I want my money back.
:("

------
nathan_long
I don't know how FB currently charges, but if it's a flat rate per click, I'd
think a reasonable solution would be make it proportional instead: this user
spent 100% of their clicks during time period X on you, whereas that one spent
only %10.

Then you would price based on the share of the user's attention you got, not
on individual clicks.

Seems a lot simpler than retroactively invalidating clicks from users who pass
some arbitrary threshold.

------
robryan
I doubt many businesses have real direct measured ROI from their Facebook ads.
Right now people are still happy to experiment with brand/ community building.
Eventually though without that direct ROI and the social hype everyone is
going to give up.

There are a lot of businesses in the world to churn through but eventually, as
a company like groupon for example are probably seeing, this drys up.

