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Facebook CPC – Don't Waste Your Money (jamespanderson.tumblr.com)
477 points by ry0ohki on Apr 4, 2014 | hide | past | web | favorite | 168 comments

Like others have said, it really depends on what you're selling and who you're targetting.

Our example (country specific mobile app for doctors), spent 100 € on AdWords, end result was literally 0 app installs, 0 sign-ups, 0 everything. Medical keywords are expensive, no chance of sending them directly to the App Store/Play Store (that we saw at least), and no other useful targetting.

Here come Facebook mobile install ads. 40 € spent so far, 500+ app installs, 200+ sign-ups, great retention. We can roughly target medical professionals, take them directly to the app stores, and the clicks are cheap as hell.

I have no doubt that AdWords work much better in other cases, and that FB can be useless, but it's not black and white, you need to know which tool fits the purpose.

Are you really getting $0.10 installs via Facebook Mobile ads? If so you're performing better than any FB ad account I've seen in the last 6 months (and I've seen a lot). Even gaming doesn't perform close to this well.

If this is actually true you should be doing affiliate installs which routinely pay out $1 with no (or high) caps. You could literally make tens of thousands of dollars daily.

I think it is due to multiple factors, but mainly the small, targeted scale of the audience, the usefulness of the product to that audience, and our first mover advantage.

For example, with less than 50 €, the ad has already been seen by around 15 % of the total audience. No matter how much we throw in, it's going to be going slower and slower from now on. But it is enough for us to get seeded among a few hundred medical professionals, and then rely on word of mouth to carry us forward.

Edit: It's also a free app, just to make that clear.

"I think it is due to multiple factors, but mainly the small, targeted scale of the audience,"

This is just good marketing advice for smaller businesses. Find as specific a niche as possible and market to that. Maybe the parent's product serves a very general audience which may make it harder to market.

Not necessarily. Prices increase pretty significantly with a smaller target audience. (It definitely depends on the vertical and product). For example, it's generally slightly more cost effective for a sushi restaurant in a small city to target the city than target people who "like" sushi on Facebook in that city.

I got something similar (about $0.11 per click, $0.18 per install) on my Android game:


You need to use the targeting options, otherwise you're wasting money.

This may also be a product of scale. Cost per install is likely to change vastly as you increase spend from 40 to 40k.

Where can you find affiliate arbitragers like this? Totally get that he/she should be doing this, but how do you find the people doing this effectively? I'm all for paying when someone has figured this out, because the installs I get often make me want to give up trying. Thanks!

The installs you get from mobile affiliate are usually shit in terms of performance fwiw. The install flows are things like ads that say [get the app now] then link directly to a random app in the app store, so there is very little intent.

Search mobile CPA networks.

I don't know if you're doing it already, but in the interest targeting you can include professions too and it will target people who have it set to their "work" on FB; plus adding hospitals to workplace targeting you can quickly close the gap

And as another handy tool, you can use the FB ads api without authentication to perform certain types of search: http://graph.facebook.com/search?type=adworkplace&q=hospital... and build your targeting criteria

Hope it helps :)

Thanks for the tip! Were professions added recently? "Doctor of Medicine" wasn't on the list at the time we put up the ads a month ago.

For workplace targetting, it looks like none of the hospitals in our current markets (Balkans) are in the system, so it's not as useful. We had a similar problem when trying to target people with "Medical School" as education and got something like 10 people total, seems education as an attribute is counted only for US-based users.

You've been able to target professions as interests for a very long time, but it wasn't obvious in the UI, glad it helped :)

And yeah, I imagine some countries will be under-represented, sadly

Yes, FB added the ability to target job titles in February this year: http://adage.com/article/btob/facebook-takes-shot-linkedin-j...

It's actually been there since the very beginning, but it wasn't publicised too much.

I totally agree, "it depends". Facebook advertising can be much more useful than the OP and many others are suggesting. One tiny little thing that 99% of people are completely overlooking:

-Page owners have the ability to restrict access by country.

This means it's literally just a couple clicks, and you can completely disable the "click-farm" countries from seeing your page (+ advertisements).

http://sendgrowth.com/blog/simple-defense-facebook-click-far... (short post about it, shameless plug) http://i.imgur.com/snkv77Q.png (screenshot of facebook settings page)

In the test that this guy did for himself, restricting by country didn't help: https://www.youtube.com/watch?feature=player_detailpage&v=oV...

App install advertising is totally different from CPC.

Within the last week I performed a similar "experiment" for newly created facebook.com/AmeriStartup.

I created two FB mobile advertisements to direct traffic to the website, though the website is more eCommerce/service than any type of sign up. Budget $50 over 3 days reach was ~20,000+; the click through rate was .5% and .4% for the 2 ads; just under 100 clicks to the website with none resulting in conversion.

More disturbing was the fan page promotion through FB (paid "Likes" in my own words). $10 budget per day over 3 days; reach = 3,000+; total likes 34. What disturbed me though was when I would go to the profile page of the users who "liked" the fan page as a result of the promotion, many of the user profiles did not appear to be legit. Moreover, the majority of these users who liked the page had a single facebook post in their entire facebook timeline. As unlikely as it is that of ~30 paid likes nearly all were were inactive facebook users who were otherwise compelled to interact with my paid promotion, it is equally unlikely that facebook would be so brazen in committing fraud on advertisers by creating and managing fake accounts to click paid promotion/ads which could easily be proven. Nevertheless is begs the question what are these accounts (fake, bots, ect...) and who controls them and why?

There's a good analysis for this phenomenon: https://www.youtube.com/watch?v=oVfHeWTKjag

It was posted on HN a while back. The gist is that there's a high chance that your ad was clicked by click farms, even though you bought it legitimately from facebook (in an effort to fool clickfarm detection, apparently).

What's even more interesting is that not only are you wasting money buying the ads, you also end up with less legitimate "likers" seeing your content because of the way facebook propagates new posts. So you're actually paying to get negative results.

Plus, you won't be able to remove that negative as you can't remove likes and your page will be seen less forever. What does this show? Don't ever, ever pay for likes.

...Unless you are targeting your custom audience (past buyers/users) etc.

But isn't it that no matter who you target and where, the click farms always steal the clicks?

Only if they have accounts inside those verticals. The more specific you are the less likely this is to be the case.

But aren't the click farms in every verticla, in every location?

No, there isn't any need for that. There will of course be some spread but it isn't intentional or planned. They don't need a solid distribution of verticals and locations for what they offer to clients since they don't need to see their clients ads just click like on their pages.

Those likes are coming from black hat marketing.

If you pay for 500 likes, and 500 different accounts are created to like your page its obvious your page is gaming the system. Likewise, if you have a voting ring of 500, its easy to see what pages those 500 accounts are liking. However, if you have a voting ring that votes randomly while ensuring anyone that pays gets 500 of the votes then its much harder to find out who is gaming the system.

i believe the current theory is that the illegal bots hide their paid likes by liking innocent pages as well...

Yes. Here's a video (by youtube user Veritasium) that walks through an experiment and explanation, for those who are interested.


From what I've gathered it was humans doing the clicking, of the like of wow gold farmers and captcha resolvers.

But you're right the strategy is not to raise suspicion is to click the targeted ads and like buttons among other random ads and likes.

If I was to learn that facebook was paying those click farms to do the clicking I wouldn't be much surprised.

This is what is happening.

Can I ask how you saw who liked your page? Was this a feature of the Ad campaign? As a page manager, there is no way I can see who liked my page who isn't a friend. This makes me sad as I believe I'm getting spam likes which lower your "engagement quotient" and make it harder for me to get content to actual people.

When on the page as an admin at the top it tells you the most recent activity for the page. Example: John Doe and 10 others liked your page and you can click John Doe or the 10 others and it will show you a page of those people.

I get email alerts for every like we get. You might want to check your notification settings.

What were your conversion rates like through other sources?

This is the important question. I've seen copy for largely untargeted convert at wildly different rates dependent on the copy quality and the quality of what's being offered.

Yup copy on the destination, copy on the ad itself can change the conversion rate quite a bit too if you're attracting the wrong sorts of people for your product. Too many variables left unexplored with 1 or 2 ads on one traffic source to one landing page.

Facebook was the only paid advertising/promotion campaign to date.

Then it's equally likely that the poor conversion rate has to do with the destination instead of the traffic source.

Though I do agree with you that buying likes is useless and a waste of money.

You could be correct that only legit users clicked the FB ads and upon review of my site they had no interest in using my service or my pricing scared them away (or any other legit number of reasons).

However, it would be willful blindness to ignore what I can verify vis-a-vis the FB paid promotion. Moreover, when I can verify the majority of likes are from illegitimate users/profiles, based on not having any posts and otherwise being inactive, then I have no expectation the users clicking the ads are any more legit than users clicking the promotion. If FB had faith this was not the case I see no reason they would not disclose the users who clicked the ads so advertisers could confirm their legitimacy.

There was a video released recently talking about fake accounts and clicking on paid like ads. It explained pretty well why they do it. That doesn't really carry over to other paid ads though.

As for the second part probably because it's a huge privacy violation.

This is my experience too.

This is a single campaign, and a single test, with one set of variables. Concluding something overreaching like "Facebook CPC ads don't work" after a test like that is like saying, "I tried mixing two chemicals, and there was no reaction, chemicals must not cause reactions."

Think of it like a computer program. If 99% of the program is right but one thing is broken, the entire thing won't work. Marketing is, in a lot of respects, the same way. You can be missing one single variable and your entire campaign falls apart.

Look at all of the variables in this campaign - title, image, targeting options, whether you do sidebar ads, newsfeed ads, or mobile newsfeed, and most importantly the product/service offered on the other side (not to mention the conversion rate of the specific landing pages). Apparently this campaign wasn't profitable, but I run a half dozen profitable campaigns on Facebook at any given time (most of them CPC), and I know people who spend $10,000/day on Facebook ads.

Facebook ads do work under the right circumstances. Concluding that they don't after one try is a little absurd.

Part of me suspects you didn't actually read the article. While the title is sort of link-baity, the actual content is interesting in that it compares Google Analytics, server logs, and his Google Adwords campaigns to the Facebook one. I don't think his conclusion is that Facebook ads don't work. It's more that Facebook is charging him for false clicks and non-unique clicks. His last sentence sums up his own experience:

"But it definitely doesn’t seem like you are getting what you pay for, and certainly the value, at least for my site is not there."

Strongly agree. I was expecting another low-quality Facebook-bashing article but was pleasantly surprised with how thoroughly the author tracked the visits (FB reports > server logs > Analytics). The whole mis-clicking on mobile rings true for me, particularly. I'm forever accidentally 'liking' posts when just trying to view the comments.

I've run a few campaigns and always managed to break even. I believe the key to success is very selective, and often slightly obscure, targeting.

Screw the cpc and the fake clicks :) they exist, nothing you can do about it, live with it.

The only thing you should consider to get to any conclusion is the overall CPA.

Facebook is a different beast from AdWords, you cannot simply target people searching for "Online budgeting tool". You have to find a good demographic and that requires lot's of testing. From that point of view $50 is actually meaningless.

Yeah ... he can say that Facebook is charging him for fake clicks ... that's an old news :)

You're saying that if Facebook is fraudulently charging advertising customers for more than they are really supplying, that's OK and we should all just deal with it? Really?

FWIW, the last few small scale Facebook campaigns we've run at one of my companies followed a broadly similar pattern to the one described in the article, and we too have checked against our various analytics tools and server logs for comparison, finding the quality of Facebook's referrals far lower than any other source.

However, we do have some other plausible theories about why this might be the case. For example, if visitors to our (B2C, leisure-related) site first see the ad on mobile while they're at work, they're unlikely to explore significantly at the time, but might come back later. We do tend to see a significant spike in both direct visitors and visitors via search engines while we're running FB campaigns that would be compatible with that theory.

Even so, it's very awkward to audit what is really going on with Facebook ads. This is partly because it's hard to determine which clicks claimed by Facebook are actually coming through to our landing page and which are either phantom clicks or other events like Facebook "Likes" that aren't worth anything unless they ultimately translate into paying visitors. It's also hard to track how much money is ultimately charged, because the charges they actually make where they collect real money and the corresponding notifications they send out seem to be based on arbitrary billing periods that don't necessarily correspond to specific days/campaigns where you originally set your budget.

At this point, given the number of reports of strange patterns that do correspond to our own experience, we are sceptical both about how many clicks we get through FB are deliberate rather than "accidental" and about how FB accounts for clicks and calculates its charges. As a small business in a niche market, our FB campaigns only have a small budget and usually they at least break even almost immediately, so we tolerate the uncertainties because our bottom line is usually positive anyway. Even so, the lack of transparency and amount of potential funny business we see at FB is disconcerting, and it certainly makes us hesitant to commit serious money to any FB campaigns in the future.

Of course I'm not saying that it's extremely frustrating both to have click fraud and having little data from Facebook to better understand what's going on. I totally agree with that.

However: 1) I don't think Facebook would be so stupid to intentionally fraud on clicks ... the damage could be much bigger than the gain. I'm pretty sure this is mainly due to click farm, bots and so on.

2) I don't care about the click fraud. I don't advertise to get clicks. I advertise to get customers. As long as the overall CPA I get from Facebook is lower than AdWords I'll keep advertising on Facebook.

What is the driver of false clicks on FB? So far as I know it isn't like Google where a third party will be paid something for the click. Isn't FB the only one getting paid when I click a FB ad?

> What is the driver of false clicks on FB?

Facebook's reputation as en effective advertiser is improved. As Deep Throat said during the Watergate scandal, "Follow the money."

How fake clicks that don't generate business results would improve Facebook reputation as an effective advertiser ?

Actually every time these posts comes out (once a week lately) Facebook reputation is hurt.

> How fake clicks that don't generate business results would improve Facebook reputation as an effective advertiser ?

In online advertising, there's a pretty big chasm between when people think is going on, and reality. Facebook has every incentive to increase their apparent standing in the online advertising business, and the fact that some of the traffic is bogus may not matter to anyone but a purist (or a client).

Consider that everyone in the business has some bogus traffic. Maybe the players feel they can compare statistics without bothering to find out how much is nonsense masquerading as business.

> Actually every time these posts comes out (once a week lately) Facebook reputation is hurt.

Yes, that's true, but a corporate strategy might be to simply say, "We're working on this problem", and hope no one pays too much attention to the actual level of effort.

I didn't get that. Elaborate?

They get to claim a certain percentage of the online advertising market. Online advertising has a self-referential aspect -- if you can produce convincing statistics, you will get more business, which will further increase your statistical standing, ad infinitum. The fact that a percentage of the traffic is bogus might be overlooked by some of the providers, and even some of the clients.

Please enlighten us about those right circumstances that somehow magically turn facebook ads into successful and profitable campaigns.

Largely depends what you're selling. For example, I have a client in the travel industry--their ads kill on FB.

Well, I used to scrape audiences from open groups in order to get extremely targeted segments. That works.

Just in case someone else thinks of doing this; it's totally against the Facebook Ad Guidelines

There's other ways of doing exactly that which maintain user privacy and are within the guidelines though.

Other ways are?

wait.. so you can feed a bunch of facebook user ids to the ad system, and only those users will see your ads?

Yes, but via API (or 3rd party using the API) only.

niche, target audience, budget and testing... your welcome.

How is that specific to facebook ? Also this looks a lot like what OP did which failed to be even close to be as succesful as search engine ads.

I don't know about the bot/fraud accusation, but do not listen to the conclusion here. Those bounce rates are not the overall average and it's irrelevant anyway. With any online advertising you need to track conversions. Optimize & spend based on those, not based on hearsay or anecdotes. Hearsay and anecdotes are for deciding to try it and Facebook is so big that you should try it anyway.

There are unlimited examples of failed advertising campaigns on every single medium where failure can be seen measured. Most campaigns fail. They are a cost of doing business. Generalizing based on those would be very mistaken. Facebook is a new but giant ad program. The tools are still rough and "best practices" are even rougher. The consultants...

That doesn't mean that good campaigns can't be run on facebook. Facebook allows campaigns to be run that would be impossible to run anywhere else. In some cases the ROI is ridiculous. In others it's one of few things that works.

The number one reason for all these Facebook sux rants seems to be "it's not adwords." People want their adwords campaign to work on Facebook. If Coca Cola wanted to tell you that they're "the real thing" on adwords, it would be an uphill battle. A budget app on Facebook might be hard going on fb. Maybe not impossible, but it's a squeeze.

If you want to advertise a local children's art exhibition taking place this weekend, Facebook ads will work like magic. 'Friends of friends of the gallery who live close by and have kids.' There is no other platform that gives you anywhere near the reach, relevance and context that FB gives you for a campaign like that. I would expect the "ROI" to be under a dollar per physical ass-through-door.

I think people just want to know what they're paying for...

I don't think the article in anyways suggest that they have a perfect advertising campaign.

He's just talking about the discrepancy between what FB reports and what he sees. I don't see how any of what you wrote actually relates or is pertinent to the article.

It looks like you just took offense, along with a lot of other commenters, to criticizing Facebook.

I think the evidence of something being wrong is very compelling. But one of the problems I see is that if Facebook even attempts to fix the problem, their revenue drops by 30% and investors/advertisers sue for fraud.

They're in a tough spot. But they should at least start to turn the ship in the right direction before their total ad business collapses as "ineffective".

Too late?

So you're saying a Walled Garden Monopoly is inherently a distopia. Please pass that along to Silicon Valley VCs and Wall Street.

I don't understand how you got to that conclusion after reading the parent comment?

The problem with the article is that the author draws a conclusion with far too little data, akin to signing up for NetFlix and saying it is a terrible service when the first movie doesn't buffer fast enough.

I've spent mid six-figures on Facebook CPC ads over the last several years and can definitively say that they work very, very well - depending on your use case. Mine is not the OP's use case (though I've sold a metric a-ton of SaaS on FB).

I advise everyone here thinking about FB ads to do the following:

- If you try it, dedicate a serious amount of money. Nothing less than $500 will suffice as you need to get statistically significant data across all your targeting sets.

- Focus very narrowly on your target market. Trying women age 22-29? Do that in your metro area only. Keep your targeting sets small so you have fewer variables to contend with.

- Don't lose your nerve. If you give up too quickly you'll know nothing.

Finally, I do understand the OP's frustration with click numbers from FB vs. GA. Don't let it get you down, as this is common on every platform. Optimize for your actual logged data and you'll profit.

You didn't read the article. The point of the article has little to do with the campaign performance and more to do with the forensics he/she did to show evidence most of the clicks are misclicks on android phones. If this is true it means even "successful" campaigns are paying this tax.

The article is titled "Facebook CPC – Don't Waste Your Money ", I think it's fair for him to explain why it was not a waste of money for him.

I read the entire article. My point is that even that small a spend does not denote the entirety of the click base quality.


With every platform you're going to have some issues with click fraud. Ideally you figure out how to make your campaign work despite these problems. You focus on quality conversions that make a dent in your business. I agree that it sucks to have to pay for this bad traffic. If you spend enough or get an account rep, I'm sure they'd take a look at the report you put together. Its comprehensive enough that other sources I've worked with would probably credit you some traffic.

In the past, I've had some spend returned due to this issue from FB but its been quite awhile since i've even requested it.

For most Saas companies, retargeting and search will work best as they are solving a very specific problem/need. Its difficult to find the users with intent that drives them to convert to a paying customer.

This is OP, I'd admit there could be more data, what isn't shown here is the larger spend I did previously (but was not measured as "scientifically" which produced similar results). I'm doing a new campaign now, targeting only Desktop with a larger spend and will report back the results.

Ok, glad you are doing a bigger campaign. If I can help please ping me via email (for reals!)

I made this comment the other day in a thread about children accidentally clicking on google display ads, but I think it also applies here. The problem is measuring the effectiveness of early funnel ads from clicks.

Here is a good presentation from the quantcast guys about the "natural born clicker" problem. The people clicking on your display ad are probably anything but actual potential customers.

Clicks is just an easy holdover metric from the paid search side of digital advertising. It doesn't make sense in the context of early funnel ads. You need to measure the effect your display ads are having on your purchasing endpoints. Which is what the whole cross channel attribution industry is about.

Its quite possible your are getting good value from facebook ads, you've just inadvertently focused in on the worst subpopulation, the clickers.


For what it's worth, that earlier Hacker News discussion regarding the Google case can be found at https://news.ycombinator.com/item?id=7524473.

> Google also lets me target only Desktop users. If Facebook would allow this same control, I could run this test again with more confidence.

FB do let you set a Desktop Only audience for ads. You need to use Power Editor (Google Chrome only) and select Desktop under Placements.

I'd like to see a re-run with Desktop targeting only.

Edit: https://developers.facebook.com/docs/reference/ads-api/targe...

Or even better, a mobile app install ad on mobile and a FB app ad on desktop.

I'd love to see one of these experiments that isn't trying to get website signups / sales which is something FB is notoriously bad for.

I spent a few years at an SPMD, and I would really advise against anyone who doesn't know exactly what they're doing to use the FB self-serve anyway...

Thanks, I will give this a try and retest!

You don't have to use power editor, you just have to update the Targeting to desktop only.

I could not find this option anywhere, but I think I see how to do it now, going to give it a try, thanks!

Very useful info. Thanks for posting.

CPC is just the wrong model for Facebook. It turns into "spray and pray". In this case, nobody is looking for a personal budget app, it just shows up uninvited. Whereas with Google, we know someone is likely looking for it when the ad appears.

I don't know what Facebook's long term business model is. IMO, this isn't it.

Google's intent based ad platform is relatively effective. Facebook is a little bit like old school TV and Radio advertising. Ad buyers are lured in about 'reaching' target demos. Age, sex, geography, brands they like (affinities). But yeah, it's still somewhat noisey since the users are really just interested in using facebook. Maybe your brand will see some recognition boost, but measuring against a funnel conversion is likely going to be worse than those who use Google and show intent to actually do something.

CPC is just the wrong model for Facebook. It turns into "spray and pray". In this case, nobody is looking for a personal budget app, it just shows up uninvited. Whereas with Google, we know someone is likely looking for it when the ad appears.

That's true. Since people spend a lot of time using Facebook (i.e. as a "third place" with no specific search intent), I would guess that brand advertising, brand-awareness marketing, and especially targeted ad remarketing would be their sweet spots.

Re-targeting. It's already driving a huge share of their ad revenue and will only increase.


This campaign failed after a few days and now it will go away. That's as it should be.

The article raises some great points and it's very frustrating to read these articles as the founder of a Facebook Ads Optimization tool aimed at SMBs (AdEspresso - http://adespresso.com - Shameless plug :P).

I'm not going to say that copy was not good or that the number Facebook tracks are correct. I find the copy of the ad used pretty good overall. However I've some consideration about it:

- I totally agree that Facebook must improve its tracking and must do more to prevent clicks fraud ... a problem which is still very relevant

- Lot's of Facebook Ads traffic comes from mobile nowadays. This can be good or bad. If you're promoting a website and aiming at conversions on a non mobile-friendly website you MUST disable mobile targeting.

- Overall $50 budget is not enough to get to any relevant conclusion.

- On a product like this (budgeting, finance, etc.) it's critical to find a very good audience to target. I'd suggest using a lot custom audiences.

- Facebook Ads bounce rate & overall quality is very often lower than Google, Yahoo & Bing, this is implicit in the nature of the platform. On Google you're getting traffic from people who are actively searching for a keyword strictly related to your product. On Facebook you're targeting people based on demographic profile and a vague interest. However Facebook is very often much cheaper than Google.

- CPC & CTR are meaningless metrics. You should always have conversion tracking and measure the overall CPA to acquire a customer. Click frauds, wrong reportings etc. ... they exists. You cannot do anything about it. You should not give a crap about it. Just check your Cost to acquire a customer and see if it makes sense.

- Sometime for some markets Facebook Ads for direct conversions simply don't work. Create valuable content like eBooks, webinars etc. to get cheaper leads and then close the sales funnel with targeted emails.

My 2 cents, hope it's useful for someone :)

How much of Facebook's traffic is mobile these days? I personally prefer the desktop version, but I spend unhealthy amounts of time at the computer anyway. I know that my mom uses FB almost primarily through her iPad since she got it.

If FB's traffic is almost or even largely from mobile devices, paying to show ads for a non-mobile site to that traffic seems just silly. The site is downright hostile to mobile users; the text loads last, it starts with a video and a worthless image, and the actual text ping-pongs across the page to accommodate the clip art and screenshots.

Given this exact same data, the OP could spend a week making at least his landing page mobile, run another FB ad, and make a blog post about A/B testing your landing page for mobile users. But no, it's all Facebook's fault, because bashing Facebook will always, 100% get you upvotes on this site...

A recurring complaint in most of the post is the inability to separate desktop users from mobile users. This makes it very difficult to optimize their advertising strategy.

I find it hard to believe that Facebook is not capable of separating mobile (smartphones, wearables and tablets) and desktop traffic in a reliable fashion. I don't know if that's intentional, or why it takes so long to address this problem. But it's hard to deny that right now the only beneficiary of this foggy situation is Facebook.

There's a radio button that lets you decide between Mobile, Desktop, or both.

The fraudulent clicks are a fact now, and they were in 2009 too, but if your earnings per click margin is high enough FB ads can definitely be worth it.

I did really well running dating ads in every English speaking market, and a lot of Spanish speaking markets as well.

FB ads were the second step in my post-college process of bootstrapping myself as a viable economic entity amidst the fallout and financial devastation of the sub-prime mortgage crisis.

So thank you Mark Zuckerberg, if it wasn't for your creation I might have had to get a real job.

YMMV, but as an anecdote my wife's FB CPC campaign for her new private psychotherapy practice saw a > 2% click-through rate to her PsychologyToday page, and the number smust have been close to real because they led directly to phone calls from prospective clients who confirmed they'd seen her ad, deliberately clicked it. It took her maybe 6 weeks to fill her schedule and she turned it off.

Note a photo of a smiling female is the best creative for CTR, and narrowing the demographic in her use case was simple: females within 15 miles of her office, aged 25-45, in certain income range. We think the average lead who actually called probably saw her ad 6 or 7 times before clicking.

OP may have valid criticisms of FB ads, but in our case it was a massive success. Spending a couple bucks to acquire a client w a LTV over $1000 is a no-brainer.

Again, YMMV but if you use it right FB can be a fantastic tool.

I'm getting fed up with these post saying "Media X" is bad (where X is usually something to do with Facebook or Google display).

Two comments:

1. This media is sold in an auction. If the quality of the traffic vs what you pay for it is bad value then the bids are set too high. If I pay over the odds for something on ebay it isn't just ebay that is at fault.

2. Doing online advertising well is harder than Facebook and Google are incentivised to make clear. In some cases this stuff is very hard which is why there are people whose full time job it is to get it right.

As someone with some expertise in biddable media reading posts like this must be like a coder reading about how a programming language is flawed because the Todo app scaffolding doesn't quite do what the author expects.

The OP is not stating the approach is bad. I think the claim is that Facebook CPC is implemented somewhat fraudulently. What is promised is not what is delivered.

Fair point.

As the adverts are sold in an auction, shouldn't the cost per click reflect the proportion of fraud?

E.g. if value of true click is $1 and 50% of clicks are fraudulent then CPC should surely approach $0.50?

So long as the fraud is uniformly distributed, that is true. But more significant is the fact that you really can't estimate your costs and benefits correctly when the vendor (Facebook) is giving you incorrect or fraudulent data.

I agree with what you say about the estimation of costs.

The benefits to site owners normally take place outside of Facebook and so should be measurable regardless of what Facebook do.

In the case where the benefit is within Facebook then the buyer is purchasing likes or similar and then they are in for a world of hurt (in my experience) because of the difficulty in valuing what is being bought.

In this case the advertiser presumably knows the value of what is bought. Then valuing a click involves working back from that towards a CPC bid based on the conversion rate of the traffic source.

As you say, things get interesting when value is not evenly distributed and are complicated further when incrementality is taken into account. But who said it was meant to be easy?

Yes, assuming everyone prices everything perfectly rationally and knows what they are buying. I expect a good deal of Facebook expenditure is people trying make it work for them, and assuming they are doing it wrong. In the long run perhaps the price will reflect a lower value.

That only happens with greater transparency. Essentially, you have to recognize the fraud to evaluate prices properly, and my impression is that most people don't.

That is true. If you only evaluate the effectiveness of advertising based on the number of clicks you get then you will be unable to set bids to take fraud into account.

I don't know enough about your business to know whether you will ever get a positive ROI on Facebook ads, but a clear call to action and more targeted copy will have a world of difference in terms of conversion.

Compare the author's: "Easy to use, free online budget" to "Scared of being in debt? Get your FREE budget report instantly. Click here to request info."

I'm not saying that's the ideal copy, but you have to get people's interest and explain more. Make it specific to a location like "Virginia" or "Sydney" or "Melbourne" or "Kentucky" and target those specific places you'll get a higher CTR and conversion. The mobile vs. desktop part is a whole other discussion.

>I created a Facebook CPC campaign (“Clicks to a Website”), and targeted females aged 22-40 in the USA and Australia who like several of my competitors pages and have an interest in Personal Finance.

(Sorry, this is a little off topic.)

Can the OP or someone else fill me in on how he was able to target people who like other pages (that he doesn't own)? Is it through lookalike audience or is there a more direct way to do it? I've been trying to do the same (target similar pages) but I'm clueless as to how to do it.

Neil is brilliant, good find.

Not sure why all the hate towards Facebook lately in HN. I do FB ads exclusively ALL DAY and I can pretty much tell you it works.

FB Ads is a very stubborn creature. There's a lot to learn in order to make it work, their editorial team is trigger happy with account bans... but the volume is massive and the targeting options are amazing.

Running a 60$ is nothing on FB, you need to run volume and optimize.

I"m doing a lot of mobile right now and you can go anywhere from .10 to .50 per install and basically scale to infinity if you like.

Interesting post but it's hardly news, a few years back when facebook was struggling to make money I remember reading a detailed article about how facebook delving into advertisement could mean the end of the web as we know it and by that it meant the end of ad-supported websites.

First facebook ads would drive online ads pricing towards the bottom, then it would make obvious something almost all of us know: online advertisement is mostly an overpriced scam that doesn't work and most netizens despise.

Then the usual business model to support costs for running a website would crumble and disappear.

Sadly I can't find this article now (thanks to google tweaking its search engine, it's now hardly possible to find an old results or anythine relevant past the first half of the first results page), but I remember it pointed out that facebook users are much less receptive to ads than google search users. People using a search engine are actively looking for something and ads can be actually be useful to them, but for people looking for social interactions with people they know ads are quite useless and an annoyance.

Right now facebook lack of transparency and accuracy in their ad business means more profit and less trouble for them while hiding the elephant in the room, so don't expect the situation to change soon unless they're given incentive to do so.

I'm baffled that no one has realized a simple solution to the "click farms".

Simply exclude the countries that are known to be click farms from seeing your page at all.

On your page settings, you'll see a "Country Restrictions" section. http://i.imgur.com/snkv77Q.png

When your page is not visible to a certain area, Facebook will not serve ads to people in that country.


This is vaguely interesting I suppose, but while 123/21243 (click through rate) is significant, 61/92 (lost clicks) is not.

...and therefore every single derived stat is completely nonsense. A percentage you say, on a sample size < 100?

Whats your confidence level on that?

(I also think that Facebook ads are a waste, and the conclusion is plausible; but the stats in the post are meaningless and probably deceptive)

Let's fix the title: "Facebook - Don't Waste Your Time or Money." Who wants in on the Facebook cash cow? Well, you need to be on the other side of this international scam. The click farms, the fake likes, the fake pages, the dark side that actually MAKES Zuck rich and he has no incentive to block.

Do you think this is a unique problem to Facebook? Google appears to have the same incentives.

No marginal incentive, I would say. I can imagine long-term incentives.

This isn't a problem. A problem occurs only if people assume a click is worth one amount when really it is worth another amount.

Simply run your campaign for $X and measure your resulting sales, $Y, and now you know if you are wasting money or not.

If Facebook 'fix the problem' then the CPC rate will simply increase.

While it's definitely possible that OP's ad campaign sucks, that's not the main point in the article, so how come many comments focus on that?

The post's conclusion is that there's a strong indication of Facebook charging for mis-clicks and double charging for non-unique clicks.

Running an ad on mobile for a site that's not optimized for mobile is a HUGE red flag, not some afterthought that should be mentioned in the conclusion. I'd wager anything most of Facebook's traffic comes from smartphones and tablets nowadays.

The interesting thing to note is that he has different results for people that come from Google - maybe people have different expectations about the website depending on whether they're looking for it on Google or just sitting in an app like Facebook?

My very rough and sloppy analysis gives you a credible interval of a conversion rate between 0.28% and 5.61%. At the upper bound of that conversion rate (5.5%), I would handwave and suggest this is comparable to your Google CPC results (depending on the actual cost per click). If I were you, I'd collect more data.

And try different ad text. Acknowledge that this is a different platform than search and you need to advertise differently. Don't be so quick to dismiss it.

Edit: and I was comparing apples to oranges anyway. If I use your Google Analytics data for both measures, we get a range of 0.39%-7.7%. This upper bound actually exceeds your Google CPC result. You don't have enough data.

How confident?

sig=0.05, but please don't trust that for anything meaningful. This is sloppy 8am blog post response statistics. My personal confidence is basically 0. I just wanted to communicate the idea that 60 impressions was insufficient to make this judgement.

If I'd do such a study, I'd pick a lower confidence interval, like 0.2. This is not a big scientific break through, or a business critical decision. This is a theorem that we're evaluating to be worthy of deeper investigation.

If there's an 80% (also known as 'a significant') chance that the conversion rate is significantly lower than that of Google hits then I'd say that warrants deeper investigation.

That's why it's important to always begin research with a hypothesis, not just randomly throw a confidence interval of a something in there :)

I'm getting pretty good results from Facebook CPC. I pay $0.12 per click and get around 50% "conversions" from that. I run a service which doesn't require any registration though and a conversion is just someone doing anything in it.

are you only targeting users from outside of US/Canada?

No. I'm targeting US, Canada, UK, Australia, New Zealand and Ireland. Age 13-30.

Facebook ads don't work for us anymore because they disabled them, without warning, without explanation, with no apparent recourse. The ads aren't against any TOS and our competitors continue to advertise without issue.

Interesting. I wonder if users flagging ads have any impact.

I say this only because I had a habit of flagging ads with the reason of 'other' and entering 'wrong language' when FB showed me ads in the wrong language.

FB ignore browser language for ads, preferring to use IP address. Duh.

It might just be that x% of people flagged a number of your ads for similarly odd reasons and you got banned automatically.

Also I'm testing a theory that FB will at some point just tag me as an 'ad hater', because any ads that show in the timeline I mark as 'don't show me again', reason 'not interested', purely because I don't like the feature.

I just tested the water with Facebook Ads for my startup AppBlade.com as well, budgeted some $500. Did my best to target mobile application developers, this was my exact experience. Thousands of clicks, not a single sign-up. Also the CPC was higher than Google for our keywords.

Google in the same timeframe has had a measurable ROI and is converting at ~10% for us; even mobile clicks.

This is just data, it's worth experimenting for yourself but I definitely feel that something sketch is going on. Make sure to use utm_ codes and something like MixPanel so you can track the originating source for your paying customers.

I've had good luck with Facebook ads. I think the targeting is key. If you target people who are already familiar with your brand, it helps a lot. You can target, for example people who already "Like" your page. And you can target their friends as well. Facebook also has a feature that lets you serve ads to people by their e-mail address.

If you stick with those, you're pretty much guaranteed to be targeting real people, and not bots or fraudsters.

Also, learn to use the Facebook Power Editor, as you get a lot more control over how your posts appear, how your ads work, etc.

A CTR of 0.4% is absolutely abysmal for a newsfeed ad and the fact that the author thinks that it is "quite high for an ad like this" makes me think he has no idea what he's talking about.

Those visitors probably didn't make it to your server, and got lost during redirects (canceled the request). This makes sense if they are using 3G. As there are at least 1 (sometimes 2) redirects between the click and your site. They track the visitor before they get redirected obviously.

I have dev'd for an advertising company, have worked with several campaigning networks like HasOffers, and have found similar results. This is more than common.

Still very interesting that the bulk seems to be Android (mobile traffic). A must know if you are not targeting mobile..

Desktop and iPhone traffic are better converting than Android traffic, so advertisers bid higher to display on these platforms.

For this type of website, he should be bidding desktop - will pay maybe 40% more per click, but much better site engagement.

FB Ads still have a long way before the tools are as robust as Adwords, but learn the platform and run more tests before you trash it. Unless you're going for something ultra-targeted it's rare to nail a CPC platform on the first go.

I think it highly depends upon how you're targeting and what kind of product your selling. I've got a friend who is using fb CPC for physical products (that includes a concierge service) and my jaw hit the floor when he told me the ROI. Admittedly, they have a pretty high revenue per customer, but my point stands that it depends on what you're selling.

So to sum up the article: advertising in an information cesspool renders bad results.

Call me a hater, I am one, and completely revel in the privilege :)

I have used Facebook CPC extensively for my e-commerce company and it has worked wonderfully ( with the right settings ). I have had over 5% of clicks convert in certain months.

However, I have had little luck with adsense for the same company. Honestly I think picking an ad network for your market is a much bigger decision than "tuning" a network you are set on using!

Oh boy. Another one of these posts.

While you can self-serve advertising, it is not necessarily a good idea, in the same way that representing yourself in court is not necessarily a good idea.

Facebook cares much less about fraud than Google does, because FB has been under much less external pressure from shareholders to do it. That is not to say that various Google properties do not have fraud issues still. This is reflected in the price differentials.

After all, entire IPOs built around Adsense fraud occurred in the mid-2000s. There have been countless small businesses built around link fraud. It is quite likely that some of the major media names built on social traffic are also based in part upon defrauding social advertisers, because as of yet, few have cared about it, and many investors will just reward companies based on trivially faked traffic metrics.

But guess what? Circulation fraud is a problem that has been with us for over a century in media. Some combination of the price system, auditing, direct response ad testing, corporate incompetence, the good ol' boy network, and other methods have kept it from making advertising either totally useless or totally risk free.

Despite this, here are some issues that could help you advertise better in the future:

1. This is not a good ad. The copy is bad. The illustration is bad. The call to action is unwieldy. The logo placement is haphazard. The headline is Wrong. The human figure is in the wrong position. The button placement is haphazard. You would be better off plagiarizing ads from Mint and swapping out the logos and colors. If you want to keep the lady accountant mascot, put her to the left of whatever copy you want the visitor to read, and make her look at it.

2. The demographics you selected might as well have been at random. Market research is not throwing a dart at the entire planet and targeting whatever the dart landed on.

3. FB != Adwords in the same way that a newspaper != the yellow pages != a niche interest magazine != radio != flyers != e-mail spam != direct mail != a catalog and so on and so on and so on.

4. Your budget is so small that it barely qualifies as a test campaign. You ran a test campaign and discovered a hazard to avoid. That is the point of the early tests. If you run out of budget before you can discover a profitable marketing strategy, your tests will uncover that you are out of business.

In this case, you are dazzling yourself with your measurements because it is easier for you to do so than it is to think at a higher level about your objectives and the methods that you want to use to achieve them given your resources. You could call this Silicon Valley Degenerative Metrics Dementia. Sadly, there is no known cure for SVDMD.

I could personally care less if Facebook goes out of business, but as long as real people with wallets continue to use it, it will have some utility to advertisers, so long as they put forth at least some good faith effort to control their bot/fraud/misclick problems.

Considering some of the things that I have seen with Facebook, I am not confident that they really care, because many investors will reward them when they count bot users (or human users living in third world conditions) as if they were humans with first world bankrolls. There is no comparable Matt Cutts figure for Facebook. I think the real money on the platform, like was the case with Google for a long time, is on the criminal side.

Hopefully some short sellers are paying attention to these stories, because terror is the only thing that will induce Facebook to stop its absurd gyrations on the product side and actually police their platform. Short sellers can orchestrate a PR campaign and either pressure Facebook to start caring or can just make a lot of money by torpedoing the firm through aggressively publicizing its failures.

All that being said, I hope that this is helpful to you, and I am glad that more businesses are learning that online advertising is difficult, complex, and risky (like advertising everywhere and always in all mediums over all time periods using all sorts of technologies).

On item 1) the quality of the ad is not relevant in the sense that people dont click on it. Unless you think that "bad traffic" comes from "bad ads".

The fact that fraud exists is huge, and that it runs so unmitigated on Facebook should be subject to class-action lawsuits. That you should work to avoid click-farms, to avoid Facebook from profiting from click-farms, is unacceptable.

FB is in a perverse incentive position to not fix something that makes profit for them, much like any other running scam. And the size of this beast is unknown, because its not recognized.

All that being said, I hope that this is helpful to you

I'm not the OP, but WRT point number one, what in your mind would qualify as better copy, and better a better call to action, and logo?

Not qualified to comment on the logo design.

It's just in a haphazard location. Humans read left to right and are attracted to faces. The logo is off there in the lower left corner. The lady is to the right of the copy. If this ad were in Hebrew, that would be fine, because that language reads right to left. English goes left to right.

'Better' copy is what tests better with the market. I do not know what is better. I have inklings on what direction to move in to improve the campaign.

I would test the current image copy vs. 'Join the 100,000+ people like you who have saved money with BudgetSimple.'

Body copy test: You can become financially secure using our free budget planning service.

Button test: 'I want my free budget' or 'Teach me to save money' -- 'learn more' is too generic.

Like most ads for tech of most kinds this is a little too heavy on the features and not enough on the 'what's in it for me?' No one cares about 'getting a better understanding of their finances' except accountants. No one gets excited about budgets except for politicians eager to spend money that belongs to other people.

Individuals want more money. They want safety. They want financial security. They want control over their own life.

If the OP wants to run a female-targed campaign, it'd be a great opportunity to pose as the authority and quote a magazine article about the problems that some women have with credit card debt or general financial planning, and reference that in the ad. This just comes to mind because a friend of mine wrote a feature for Cosmo on this topic a couple years ago. Ads that do not come off as pushy and instead present themselves as trustworthy, useful information can win over the trust of the target audience better.

If it is really just Oz, then Oz up the ad. Australians would care more about joining 20,000 other Australians just like them than 100,000 Yanks, for example.

There is a dude who runs a budgeting business off of Something Awful banner ads that I remember from a few years back that uses goon jargon to establish rapport with the target audience. He succeeded by matching the tone and content of his message to the readers in the right context.

You should try out the Facebook Power Editor for Facebook ads. There you have the option to target just desktop users.

It is a bit more complex but you will get more possibilities with this editor: https://www.facebook.com/ads/manage/powereditor/

Why are you wasting your money sending mobile users? Even mobile web users are useless as most are drive-by visitors that might not get the FULL impression they'll get through a desktop browser.

Even if you optimize for mobile web, I'm sure they won't experience the true power and wow-ness of your app unless they visit it thru a desktop.

I'm a huge fan of only using FB for retargeting. You know you aren't targeting spammers, and there's some sort of legitimate interest there. The only risk here is some cannibalization and duplication, but if you use some higher end analytics and pay attention to it that shouldn't be too much of an issue.

This is basically the correct way to go about it when you have a small budget.

Paying for traffic by the click/impression/<anything other than conversion> is the most dangerous thing to do on the internet if you don't fully trust the integrity of the payee or the quality of its network.

For my travel startup DealScoopr, we saw similar similar results from Facebook CPC Ads - low conversion rates, mostly Android traffic. Google Adwords turned out to be much more effective.

"First, note that Facebook seemed to have charged me for non-unique users clicking the ad, as well as myself clicking the ad."

This sounds like a bug (or a feature, i.e. fraud).

Ya we stopped all ads as well, they just had shitty results. And most of the likes for those campaigns were from people who looked fake.

Try both, double down on what works. Why wouldn't you try fb ads? Many companies have success, see if you can be one.

we had very similar experience with facebook ads and stopped it completely. here is our post on that http://blog.animatron.com/post/79877876767/the-mysterious-ca...

I grepped here and the target page for CPC but I didn't get a critical question answered:

What is Facebook CPC??

Lol paying for marketing. Go find your customers, it's free.

with the traffic this cat is getting now for running a crap campaign on FB i think ill do a bogus writeup on how bad my campaign was put together and put it in HN too :/

I'm loving my FB short. What a terribly managed company. So frivolous with their cash, and immature overall

I'm not saying Facebook is astroturfing, but there seems to be a lot "new" accounts when these thing come up.

    How can Facebook fix this? They need to work like Google.
but they simply cannot/unwilling to do this because they are NOT google, otherwise they'd already have done this. I think come earnings report, they will have a lot to answer to, possibly lawsuit or investigation happening.

> I think half of the Facebook business model is based on people accidentally clicking things .. How can Facebook fix this?

- Why fix something that's not broken? It's working exactly as Facebook intended it.

Why would you send mobile FB clicks to your website? Send them to a mobile app on mobile (!!!)

You can target only desktop users, if you want to send people to a website

I assume you are a mobile app developer looking for a job.

I don't know a single user who enjoy being sent to a mobile app instead of the website.

If being hated by your users is not enough of a deterrent, then factor in the cost of building said apps on mobile platforms and maintaining them through time and new smartphones versions while having a website versus simply having a website.

Unless you're a big corp with tons of money to throw out the windows, the wise path is a well thought and designed website.

Not really, I used to work at one of the main Facebook SPMDs so I'm saying that out of having seen the performance of mobile app campaigns on advertisers that spend $100k+ a day on fb.

I don't see why you would be hated by your users? The ad makes it super clear that it's an app, it takes you straight to the app store where you can read reviews / description / screenshots and then you just install it.

I think you are making the mistake of thinking that the average user is like you, most people will just want to get the app ASAP when they see an ad for something that seems useful; not having to navigate a website which doesn't have a mobile version (try budgetsimple.com in an android phone, it's impossible to use !)

If I click a link on my phone and it tries to get me to install an app, I'm instantly hitting the back button.

Do people really install random apps because they saw a one-sentence advertisement on facebook? I really don't know what normal behavior is for the average facebook user.

Yes, they do. CTR and CPI on mobile app ads on FB used is still among the best performing.

What's wrong with a mobile web browser?

Ads that direct to web on mobile just don't perform as well

People with no idea of how to run ad campaigns should not be bad mouthing X ad platform.

There are so many ways this post is wrong. First, a .4% CTR for a newsfeed ad sucks. That means either your demo targeting sucks, or your ad sucks, or both. Second, if android visits don't convert, change targeting to desktop visitors only. Third, traffic sources behave differently. You can't jump to the conclusion that they're scamming you just because one traffic source worked and another one didn't. Another possibility is that you haven't tried hard enough.

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