14 Aug 2012

Is Facebook Smart for Advertisers?

August 14, 2012PPC Advertising

If you’ve been keeping up with the news at all, you’d know that Facebook’s had it rough as of late. Just last week their shares dropped to an all time low of less than $20 each, only adding to the stress they have experienced since going public. To make matters worse, three top execs, Ethan Beard, Katie Mitic and Jonathan Matus, have announced that they will be leaving the social giant in the weeks to come to pursue other ventures. In times like this, Facebook should be doing everything in its power to ensure its investors and advertisers that their money is being used wisely – but is it?
After admitting that they had under calculated their number of Monthly Active Users earlier this year, Facebook was already getting some flack from its advertisers. Later, when it came out that some PPC dollars might as well have been flushed down the toilet, things really began taking an ugly turn for the social networking site. This of course is in reference to the recent accusation that Facebook may have been delivering bot traffic to its advertisers, which may have resulted in false clicks and useless investments for thousands of these users.
The accusation was drawn by a small New York City based start-up company, Limited Run, which specializes in helping customers create their own online store platform. When Facebook’s web analytics tools were tracking less than a fifth of Limited Run’s PPC clicks the advertiser became skeptical. Understanding that this could have been due to sampling, the employees researched further to see what could be skewing their numbers. That’s when they discovered that nearly 80% of its Facebook ad clicks were being delivered from users who did not accept JavaScript – a key function that can determine whether a click is from a genuine human, or a bot.
Other PPC sites make money by delivering traffic for their advertisers, and while bot activity has become common everywhere, it is fairly easy to block this bad traffic. Once this activity has been detected, the PPC site can take the appropriate actions to ensure advertisers aren’t paying for bunk clicks. When JavaScript activity is dropped, some sites opt to bring the clicker to a special filter page where they have to prove that they are actually human. This helps prevent click-fraud up front, and then to take it a step further, most sites will do further reporting to remove a percentage of any other ads that appear to project suspicious activity.
In this instance, Facebook did not take the appropriate precautions to keep their advertisers safe, and now they are paying the price. Advertisers are losing trust in the popular social networking site. Facebook does not currently utilize a filtering system to identify potentially false activity, and their further reporting barely skims the surface to find bad activity. The number of users visiting the site means nothing to advertisers if the clicks that they are receiving are not legitimate, and Facebook is feeling the pressure to address the allegations that they are delivering thousands of clicks worth of false traffic.
Cynics say that while Facebook helps institute brand recall and recognition by promoting to fans and giving users the options to “like” the pages on the site, these people may not be becoming conversions on your website. There is no guarantee that they will purchase your product or benefit you outside of the Facebook realm. Keep this information in mind, and use caution when proceeding with your PPC campaigns. Whether you opt to use Facebook (who, might I remind you again, does not use a filtering system to detect bad activity) or another site, remember that conversions mean money and you should focus on utilizing channels that will result in profit for you. With all of the problems Facebook seems to be facing, it might be worth it to explore your options and find another medium that works for you and your campaign.

1 Comment

  • Chris von Nieda Aug 24, 2012

    Great article Al & Team, thanks for the heads up on this! I wasn't aware…
    – Chris