A recent startup called Limited Run has been generating substantial buzz recently on the topic of Facebook advertising. Limited Run claimed that 80% of the clicks they received from running Facebook ads came from bots rather than real people. The startup posted an update on their Facebook page explaining the situation:
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.
Limited Run deleted their Facebook page within the next couple of weeks and ditched Facebook all together, because, “they’re scumbags and we just don’t have the patience for scumbags.”
Them’s fightin’ words! The company will still have a social media presence, but they will stick to Twitter, where according to them, they don’t have to worry about bots and B.S.
I did some investigating, and found out that Limited Run’s run-in with sketchy Facebook advertising is not a one-time deal. Search Engine Journal published an article on July 16 (before the Limited Run story gained national attention) in which Jake Filan describes his Facebook-advertising experience.
A Second Suspicious Fake-Click Situation
Filan ran an ad campaign for a Facebook fan page that increased the number of page likes from 100 to 900. His first thought: Facebook advertising is working! These numbers are certainly impressive. Yet, after a week of posting content to engage these new fans and capture the attention of more new fans, Filan found that each individual post received around the same number of “likes” as before the ad campaign. The page’s number of fans rose dramatically, but engagement and participation levels remained unchanged.
Filan examined the individual profiles of these alleged new fans. What he found was shady and suspicious. The “people” who were liking the page had inactive Facebook profiles with no substantial information and had liked (in some cases) upwards of 11,000 pages. This is more than cause for suspicion. Filan found that some accounts liked pages at a rate of more than 500 per month. It’s worth noting that the majority of people (75%) like between only two and ten brands on Facebook.
He concluded that people use bots and compromised accounts to sell actions in Facebook. These accounts go on frequent, rampant liking sprees in an attempt to, as Filan says, “diversify their activity history” and “randomize any patterns.” And, bottom line, to avoid getting kicked to the social media curb. They don’t want these accounts banned from Facebook, so they like tens of thousands of pages.
These two examples don’t inspire any confidence in Facebook advertising. They’re Facebook advertising horror stories. Companies who receive clicks from bots are not any further along as far as brand awareness, consumer base, and company growth, and they’re out on time, money, and resources. Reading the accounts of Limited Run and Filan would shake anyone’s faith in Facebook ads, and it might even inspire people to run far, far away from advertising on the largest social media site. Also, in May, General Motors, the third-largest advertiser in the country, scrapped its $10 million Facebook budget. These examples raise the question: do Facebook ads even work?
Do Facebook Ads Work?
For its 2011-2012 Search & Social Survey, Greenlight surveyed 500 people to discern how people use Facebook. The findings:
- 44% of respondents said they never click on display ads.
- 31% of respondents said they “rarely” click display ads.
- 10% said they “often” clicked ads.
- 3% said they “regularly” clicked Facebook’s sponsored posts.
An AP-CNBC poll found that:
- 83% hardly ever or never click on ads or sponsored content on Facebook.
Reuters found that:
- 4 out of 5 Facebook users have never bought a product or service as a result of advertising or comments on the social network site.
However, a Wall Street Journal article, “The Big Doubt Over Facebook,” reports that when Ford used Facebook ads instead of Super Bowl ads to market the 2011 Explorer, shopping activity for the Explorer jumped 104%, as opposed to the average increase of 14% following a Super Bowl ad.
I also discovered a story on Mashable about a Facebook ad success story. Brendan Irvine-Broque, Director of Growth for PageLever, wrote a post on his personal blog in which he states that Facebook ads helped him make $10,000 in a single day. Irvine-Broque states that he spent $150 on ads to publicize a vintage-vinyl-record sale he planned to hold at his home. After three weeks of running the event ads, 341 people had RSVP’d as “attending” and 104 people RSVP’d as “maybes.” These real people actually showed up at Irvine-Broque’s home, and he made $10,000 in cash. His point: Facebook ad clicks come from real people, not bots. Of course, Irvine-Broque admits he’s biased, because he works for a company that derives its entire raison d’être from Facebook: PageLever is the leading provider of Facebook Analytics for global brands.
There is a lot of evidence out there to suggest that Facebook ads don’t work, but there are some success stories as well. The Limited Run story has generated a lot of discussion, and I think it’s very easy to use this one instance (possibly coupled with GM’s abandonment of Facebook ads) to conclude that ads don’t work. And maybe they don’t in the majority of cases. But, they do for some people. I think it’s hard to reach a general consensus about Facebook ads, because it’s hard to compare an ad run by a start-up music site like Limited Run to an ad promoting a vinyl-record sale.
Yet, I think there is an underlying problem with Facebook ads in general. Ads and Facebook are not an obvious or natural combination. Ads and Facebook are conflicting more than they are complementary. Let me explain.
Why FB Ads Don’t (and Won’t) Work
Numerous people have spoken out against Facebook ads, and I think they have very valid points. Joseph Perla wrote a much-talked-about article entitled “Facebook Is a Ponzi Scheme.” In the article, he states:
People go to Facebook to interact with their friends. It is fundamentally different from the ad platform that is Google. People go to Google to find something they need, possibly ready to buy, which a good percentage of the time can in fact be solved by someone’s ad. Facebook ads, on the other hand, annoy users. They yield no real value, and thus no profits.
This is a controversial, adamant statement, and many people would contest Perla’s utter denunciation of Facebook ads. People spend money to advertise on the site because they believe it works. Contesting a sense of faith in the power of Facebook ads (which are inextricably linked to time and cash, two things people don’t want to believe they are wasting) can get messy. Facebook-ad proponents will crawl out of the digital woodwork and emerge from behind their computer screens to say that dismissing ads is senseless. But, I think that Perla has an excellent point. Facebook is by nature social, not commercial. I don’t log on to Facebook to be bombarded by ads; I log on to connect with my friends. If I search for a book or clothing item on Google, I may very well be in buying mode: I’m willing, and ready, to make a purchase. When I visit Facebook however, I’m not in a money-centric mindset; I want to get the latest updates on my friends and family, peruse photos, or write on someone’s wall. Consumerism and cash are not on my mind.
WPP Chief Executive Sir Martin Sorrell echoes a very similar sentiment in an article published in The Guardian. He says:
The point is that Facebook is a social medium, not an advertising one, like search or display,” he told the Guardian. “It certainly is one of the most powerful, if not the most powerful branding medium. It is, however, a word of mouth or PR medium. You interrupt social conversations with commercial messages at your peril.
Sorrell’s statement reminds me of something I heard while recently watching a special on Mark Zuckerberg on MSNBC. Zuckerberg said that the purpose of Facebook is to connect people. He actually said something very similar to shareholders recently: he stated that “Facebook was originally not created to be a company…It was built to accomplish a social mission—to make the world more open and connected.”
Zuckerberg’s statement on the original purpose of Facebook surprised me. People talk about Facebook all the time: from a friend’s recent status update to a family member’s photo album to going offline to avoid an unexpected Facebook chat assault by that not-so-special someone, Facebook is part of our everyday dialogue. The site even has a unique jargon that has become part of contemporary vernacular. Facebook has seen tremendous growth, but to hear Zuckerberg cut through all of the millions and millions of users and zero in on the one idea behind the site’s creation was interesting. It’s not often that I hear Facebook boiled down to a single, specific purpose.
Mo’ Money, Mo’ Problems
If Facebook is by nature a social site designed to foster a more connected world, what does this mean for advertising? Well, Facebook is in a tough spot, because the site has grown so much that it needs to employ programmers, designers, executives (oh hey, Sheryl Sandberg!), and various other staff. Therefore, the site needs to make money. That’s where advertising comes in. Ads represent the main source of Facebook’s revenue. According to the New York Times, Facebook generated $3.7 billion in 2011, 85% of which came from advertising.
Yet, according to people like Perla and Sorrell, advertising conflicts with the fundamental nature of Facebook. Sorrell says the inserting commercial messages into an inherently social space is detrimental. Can Facebook stay true to its original purpose while simultaneously making money through advertisement? Is advertising muddling up the original purpose of Facebook? Can a social medium have commercial elements?
Why Can’t We All Just Get Along?
Facebook certainly makes it seem that socialization and advertising can get along.
Facebook is clearly trying its best to integrate the social aspect of the site with advertising as seamlessly as possible. It thinks social and commercial aspects can coexist rather than conflict. Facebook even features a page titled “Advertising on Facebook” that reads like a mini commercial on behalf of ads. Facebook first presents ad as a necessary evil: “from the beginning, the people who built Facebook wanted it to be free for everyone. It now costs over a billion dollars a year to run Facebook, and delivering ads is how Facebook pays for this.” But, then they try to make ads not seem so bad. After all, they’re personalized, and people can impact the ads they see: “Spot something that doesn’t interest you? Click the X and it’s gone.” How bad can something that makes a free Facebook possible and that vanishes with the click of a mouse really be?
(Oh, and in case you were wondering, the rumor that Facebook sells people’s names and contact info to make money is false, according to Facebook’s own version of Mythbusters.)
Facebook tries to meld social and commercial elements together so that the ads we see aren’t so random, nonsensical, and invasive. Hence, sponsored stories. If one of my Facebook friends likes a page or interacts with a brand by posting on its wall, that company can pay money so that I will see this like or this interaction. Here are a few examples from my Facebook page:
Both of these posts showed up in my news feed, because Walmart and Subway have both paid for sponsored stories. The key here is that Walmart and Subway promote themselves through my friends. The theory is that I have faith in the opinions of my friends and I trust their recommendations, so if my friend likes a brand, I will be more inclined to like them as well. A random stranger liking the Subway page means nothing to me, but if my friends like the page, then this brand becomes relevant to me. Sponsored stories allow businesses to tap into the power of word-of-mouth marketing, which research has proven is extremely powerful. They’re (seemingly) beneficial for businesses, but also (seemingly) beneficial for consumers. If Facebook ads are necessary in order to keep the site free, at least I’m not bombarded with irrelevant, pointless ads. These ads connect to me in some way through my friends.
This is a nice effort on Facebook’s part to integrate the commercial aspect of Facebook into the social aspect, but ads are still ads, whether they’re shrouded in sociability or not.
Forecasting the Future
The real question is: where does Facebook go from here? The Limited Run story is one more crack in the foundation of Facebook’s credibility. And, there have been a lot of stories running recently about the erosion of Facebook integrity, the inability to trust ads, etc. I wanted to see if blasting Facebook ads is the equivalent of jumping on the bandwagon, or if all these anti-Facebook remarks are empty words.
I looked at social media ad spending, but found conflicting reports, so it’s hard to say if Facebook has something to worry about. One report predicted that global ad spending on social media platforms will increase tremendously over the next four years. Yet, Forbes ran an article last month that reported agencies and brands are devoting less attention to Facebook compared to just three months ago. Also, a report from IDC found Facebook’s advertising growth fell by more than half to 30% in the fourth quarter. Yesterday, Facebook’s stock price dropped to a new low.
I think Facebook obviously needs to address the Limited Run situation; but I also think they need to speak to advertising on the site in general. And yes, I’m aware they already put out a statement, but I’m talking about something other than using a lame word like “miscommunication.” Also, I think it’s worth noting that Facebook became the wildly popular entity it is today due to people flocking to the site because of what Facebook offered them socially, not commercially. See, this tweet:
I don’t know how much Facebook can do about the nosey old women, though.