Facebook’s ad model a scam? Duh...ya' think?

[mamboni]

Facebook’s ad model a scam?

Submitted by thetrader on 08/01/2012 08:59 -0400


By www.thetrader.se

When Facebook was listed earlier this year, we suggested the stock would be trading around 1o USD before any serious investor would feel the urge to start buying. Having dropped close to 50% from the IPO price, Facebook is surely making investors nervous. The stock has speculative weak hands stuck with stocks they don’t want. Rinsing out those will take longer than many anticipate. After disappointing many last weeks, Facebook continued the free fall today. From Bloomberg.
“There were obviously some people who didn’t want to sell on the first day in anticipation that you would see some stabilization and the stock price sort of return a little bit,” saidMark Harding, an analyst at JMP Securities LLC who has a market outperform rating on the stock and doesn’t own it. “Perhaps they’re disappointed by the lack of a recovery, and maybe now they’re using the opportunity to perhaps pare back.”

But perhaps possibly much more disturbing facts regarding Facebook’s ads is this article “sotfly” suggesting the ads business could be a scam.

Hey everyone, we’re going to be deleting our Facebook page in the next couple of weeks, but we wanted to explain why before we do. A couple months ago, when we were preparing to launch the new Limited Run, we started to experiment with Facebook ads. Unfortunately, while testing their ad system, we noticed some very strange things. Facebook was charging us for clicks, yet we could only verify about 20% of them actually showing up on our site. At first, we thought it was our analytics service. We tried signing up for a handful of other big name companies, and still, we couldn’t verify more than 15-20% of clicks. So we did what any good developers would do. We built our own analytic software. Here’s what we found: on about 80% of the clicks Facebook was charging us for, JavaScript wasn’t on. And if the person clicking the ad doesn’t have JavaScript, it’s very difficult for an analytics service to verify the click. What’s important here is that in all of our years of experience, only about 1-2% of people coming to us have JavaScript disabled, not 80% like these clicks coming from Facebook. So we did what any good developers would do. We built a page logger. Any time a page was loaded, we’d keep track of it. You know what we found? The 80% of clicks we were paying for were from bots. That’s correct. Bots were loading pages and driving up our advertising costs. So we tried contacting Facebook about this. Unfortunately, they wouldn’t reply. Do we know who the bots belong too? No. Are we accusing Facebook of using bots to drive up advertising revenue. No. Is it strange? Yes. But let’s move on, because who the bots belong to isn’t provable.
While we were testing Facebook ads, we were also trying to get Facebook to let us change our name, because we’re not Limited Pressing anymore. We contacted them on many occasions about this. Finally, we got a call from someone at Facebook. They said they would allow us to change our name. NICE! But only if we agreed to spend $2000 or more in advertising a month. That’s correct. Facebook was holding our name hostage. So we did what any good hardcore kids would do. We cursed that piece of shit out! Damn we were so pissed. We still are. This is why we need to delete this page and move away from Facebook. They’re scumbags and we just don’t have the patience for scumbags.

Thanks to everyone who has supported this page and liked our posts. We really appreciate it. If you’d like to follow us on Twitter, where we don’t get shaken down, you can do so here:http://twitter.com/limitedrun

For the (still) best dummies explanation of FB check the video here.
Page here.
Courtesy Yves.


http://www.zerohedge.com/contributed...-ad-model-scam




Mamboni comments: Why is it that in recent years, bagel-eaters have been invariably the principals involved in the financial scandals and scam, like MF Global? Is it just a coincidence? For centuries, gentile cultures forbid the bagel-eaters to participate in finance and banking, and all was well with the world. Perhaps we are going to learn why, the hard way.

[Heimdhal]

When you start out on the ad service, they give you a $50 "gift card" to start running ads. Since it wasnt going to cost me a penny, I got an add up and running. The $50 lasted me just around 5 weeks, from the begining of June into the first week of July.


According to their analytics, I reached some 35,000,000 people and was averaging only about 1 click a day (which cost an extra $1.20 ish, per click), reaching 35,000 views a day.

There was no practical increase in traffic to my website, nor to the companys facebook page, nor in orders placed.

That was all I personally needed to know. Sure, 1 month probably isnt a good benchmark and had I spent more for more exposure, it may have changed, but after reading articles like the OP and many, many others, I washed myself of them and figured based on my experience, that yes, it is veyr likley a scam and many companies are PISSED.

[mick silver]

this need to be seen by all here ...