THE Facebook Ad Scam by Dr Augustine Fou


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Facebook can generate enormous quantities of ad impressions, by sticking 4, 5, 7, and up to 9 ads per page. Doing social media does not mean sticking ads on Facebook.

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  • I spent $100 and divided it out to 8-9 different ads, per FB recommendations.Throughout the period when the ads ran, there were 'clicks' that were different than the 'clicks' I received before the ads ran. The clicks during the ad period were index hits and 1-2 second duration visits. 1-2 seconds! Clicks before the ad campaign were more normal, with multiple page views, and 20-30 seconds per page.I'm very suspicious about the clicks I received.
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  • I'd argue that FB ads are the most valuable and under-utilized forms of media available. The targeting is unprecedented - its a marketer's paradise. Its just ineffective if you're still trying to build a brand and use impressions to do so. The world changed and there's way too much competition now.
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  • facebook, cpm, cpc, ctr, click through rate, low performance, display ads, search ads, targeting
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THE Facebook Ad Scam by Dr Augustine Fou

  1. Facebook Ad Scam ad scamCPMs Are For Suckers Dr. Augustine Fou @acfou Marketing Science Consulting Group, Inc.
  2. S-1: 6th Amendment, May 9, 2012 “We do not currently directly generate any meaningful revenue from the use of Facebook mobile products, and our ability to do so successfully is unproven. We believe this increased usage of Facebook on mobile devices has contributed to the recent trend of our daily active users (DAUs) increasing more rapidly than the increase in the number of ads delivered. If users increasingly access Facebook mobile products as a substitute for access through personal computers, and if we are unable to successfully implement monetization strategies for our mobile users, or if we incur excessive expenses in this effort, our financial performance and ability to grow revenue would be negatively affected.” Source: May 9, 2012July 31, 2012 2
  3. How does Facebook continue to garnish revenues? … … when key metrics have been in decline for 2 years?April 11, 2012 3
  4. Facebook site metrics… Visitors 158 million /mo peak * Visits/Person Jan 2011 20/mo -33% from peak … more visitors but less visits/user.July 31, 2012 4
  5. Facebook key metrics… peak * Visits Jan 2011 3.1 billion /mo -28% from peak peak * Pages/Visit Aug 2010 20/mo -34% from peak … have been in decline for 2 years.July 31, 2012 5
  6. Facebook key metrics… peak * Pageviews Sep 2010 62 billion -46% from peak peak * Average Stay Jan 2011 18 mins/mo -36% from peak … have been in decline for 2 years.July 31, 2012 6
  7. Facebook’s revenues … 85% of Facebook’s revenue still driven by display ads sold mostly on CPM basis Source: Facebook S-1 Feb 2012 CPM ad revenue is driven by visits to the site and pageviews generated per visit Decline in total pageviews exerts downward pressure on this form of revenue. … are driven by users’ pageviews.July 31, 2012 7
  8. Facebook robs advertisers... 2012 1 2011 2 2010 3 4 5 6 7 4 8 Source: Facebook Display Ads | go-Digital Blog 9 …by increasing number of ads per pageview.April 11, 2012 8
  9. But display ads simply don’t work… … if the ads are not seen, even the “branding” argument falls apart. Check out another great first-hand analysis by Freddy J. Nager, Prof. of Integrated Marketing, UCLA and Robert Kennedy College of Zurich, Switzerland. 11, 2012 9
  10. Click Through Rates Suck Facebook’s click through rates are LOWER than that of BLANK banner ads, which got 0.08% CTRs. 0.03% - 0.04% Source: AdAge, July 23, 2012 Source: TBG Digital July 2012July 31, 2012 10
  11. But costs are going up … Source: TBG Digital July 2012July 31, 2012 11
  12. Users ignore Facebook ads Source: Mashable, April 2012July 31, 2012. 12
  13. TechCrunch Reports Massive Facebook Click Fraud (2009) “Tracking 202 is telling me 11 clicks….Facebook is telling me 145. That’s way off .” “FB click fraud update: ratio is now EXACTLY 10:1. 10 clicks reported on “Tested on 3 different servers at 3 FB, 1 click on prosper.” different DCs (not a network issue).” Source: 11, 2012 13
  14. BBC Reports Significant“Like” Fraud “These [fake accounts] all seemed to have an enormous number of Likes, with many totaling more than 10,000 and at a “Liking” rate of more than 500 a month.” Source: Search Engine Journal July 2012July 31, 2012 14
  15. So what? “Doing social media does not mean sticking display ads on Facebook. Instead, brands should engage with and have meaningful conversations with customer.” - Dr. Augustine Fou Instead of display ads, see how other companies are doing social media right: 11, 2012 15
  16. Dr. Augustine Fou – Chief Digital Strategist Dr. Augustine Fou is an industry-recognized thought leader in digital strategy, search and social media marketing and former Group Chief Digital Officer of Omnicoms Healthcare Consultancy Group. Dr. Fou has over 16 years of management consulting and digital strategy consulting experience, advising CMOs, marketing executives, and global brands. He helps clients make the transition from “traditional” advertising to marketing that is optimized for the new digital world. MCKINSEY CONSULTANT CLIENT SIDE / AGENCY SIDE EXPERIENCE PROFESSOR AND COLUMNIST ENTREPRENEUR / SMALL BUSINESS OWNER PHD MATERIALS SCIENCE (MIT 95) AT AGE 23 ClickZ Articles: LinkedIn: 11, 2012 16
  17. APPENDIXApril 16, 2012. 17
  18. Facebook Sales Declining Sales declining Growth negative now Source: SEC FilingsApril 11, 2012 18
  19. Facebook CPMs/CPCs falling Average CPC: $0.40 and falling Average CPM: $0.25 and falling Source: AdParlors data is based on a sampling of 1 billion daily ad impressions served on Facebook since January 2011. Read more: 11, 2012 19
  20. Estimated eCPMs from S-1 2009 2010 2011 $0.19 $0.39 $0.68 Source: Facebook Ad Benchmarks, 2009 | go-Digital BlogApril 11, 2012 20
  21. Facebook (old from Oct 2009) Peak: 7/2009 100B pageviews /mo Peak: 7/2009 16:40 min avg /mo Peak: 1/2009 68 pages/visit Source: go-Digital Oct 2009April 11, 2012 21
  22. Calculations Traffic Data from Ads per page increased from 4 ads in 2010 to 7 ads in 2012 Ad impressions are pageviews times number of ads per page eCPM is annual Facebook total ad revenue divided by annualized ad impressions * 1,000April 16, 2012. 22