February 10, 2014

Fraud, ads, and Facebook's business model 

Derek Muller of the Veritasium YouTube channel made an excellent video explaining a fundamental problem with Facebook ads related to illicit purchasing of “likes.”

The upshot is that even if you pay Facebook to promote your page (instead of buying “likes” on the black market), you will end up only reaching a bunch of zombie accounts from click farm workers.1 This is a side-effect of click farms “liking” random pages to avoid being detected by Facebook.

(You should watch the video if you’re interested in the details of why this is a problem for everyone promoting pages or posts on Facebook – Muller explains it really well.)

Back in 2012, GM pulled a $10 million annual ad campaign from Facebook, presumably because the ads were not effective. Perhaps fake accounts from click farms played a role in this, but I doubt it was the only issue.

The massive profits Google makes from ads makes it seem like all online advertising should print money. But Google has the advantage of serving context-relevant ads to people who are actively looking for something. This aligns incentives for advertisers, ad-viewers, and Google in a win-win-win scenario, leaving nothing to be gained by anyone from gaming the system.

Google’s ad-supported business model is a fluke in the online advertising space. Promoted social media content will eventually fall into the same category as ads in traditional media and online banner ads: an uphill battle for the attention of ad-viewers.

Additionally, there are incentives for bad actors, like click farms, to game social networks where content is promoted. Facebook exacerbates this by creating an artificial attention deficit (only showing posts a fraction of followers instead of everyone), as Muller describes.

I’m very skeptical of the long-term viability of any ad-based business model where what’s best for the user is not what’s best for the advertisers or the company selling the ads.


  1. Click farms are entities that employ low-wage workers in low income countries to click “like” on Facebook, and then sell these clicks to unscrupulous people who want to increase their “likes” to promote their page on Facebook. This is against Facebook’s rules. [return]

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