The Problem With Facebook

for those interested in this topic these two excellent videos from veritasium corroborate this article and go beyond to explain the stark implications for facebook's business model: facebook fraud: [link] the problem with facebook: [this video] > From January 2013 to February 2014, a global team of researchers from the Max Planck Institute for Software Systems, Microsoft’s and AT&T’s research labs, as well as Boston and Northeastern Universities, conducted an experiment designed to determine just how often advertising campaigns resulted in likes from fake profiles. The researchers ran ten Facebook advertising campaigns, and when they analyzed the likes resulting from those campaigns, they found that 1,867 of the 2,767 likes—or about 67 percent—appeared to be illegitimate. After being informed of these suspicions, Facebook corroborated much of the team’s work by erasing 1,730 of the likes. Sympathetic researchers from a study run by the online marketing website Search Engine Journal have suggested that targeted Facebook advertisements can yield suspicious likes at a rate above 50 percent. In the fall of 2014, Professor Emiliano De Cristofaro of the University College of London presented research which found that even a page explicitly labeled as fake gained followers—the vast majority presumably bots. > The bot buildup can even affect companies that aren’t advertising with Facebook, but are just passively hoping their pages gain real fans. In 2014, Harvard University’s Facebook fan

Veritasium on youtube has a couple of videos breaking down the numbers - not only do you have to pay to get views now, but the views delivered above and beyond what you usually get are fraudulent. He showed the usage of his page beforehand, with users clustered in Western countries, generally 20-40% of whom interacted with his page in some way. After paying for more views, they were all from developing countries, a profile of users he'd never seen before with very little (0-1%) engagement with his page. It's worth checking out his videos if you want more detail on the patterns he found. It's pretty clear that it's fraudulent. [this video] (explores problems he sees with FB as a marketing platform) [link] (massive influx of unengaged developing-world pageviews)

I mean, we're practically all advertisers in some way or another - every time we share a promotion with our friends, or even just discuss a new product we're interested in. Most of the time we're not advertising for the sake of profit, but just sharing interests with like-minded people. Social media outlets attempt to tap into our general ignorance of advertising profitability - and they act as the middle-man between companies wishing to advertise, and the people who're sharing with friends - but facebook take all of the profit by inserting themselves between these relationships, and the users who are sharing don't notice they done a large part of the advertising work, for free. Facebook can obviously provide some usefulness, because it knows where you are, what your interests are, and your recent activities - so it can target you for specific promotions. A recent video by Vertitasium[1] showed how this isn't without problems though, and does not directly correspond to ROI for advertisers. (Likewise with many advertising models, there's always people trying to game them to earn a quick buck). Facebook provide the "advertising seed", by predicting who is likely to share. I see a different potential model that could arise with the gaining popularity of cryptocurrencies and electronic transactions though - one where advertisers only pay when it results in a direct ROI, by tracing electronic signatures through a public, distributed ledger. If a company wants to promote a product,