BBC Study Questions Facebook Ad Value

An investigation by the BBC has questioned the value of advertising on Facebook, highlighting the disproportionate response that some advertisers receive from apparently fake Facebook accounts.

Responding to concerns by a marketing consultant, the BBC placed a dummy Facebook ad – a page advertising a nonexistent firm called VirtualBagel which nevertheless attracted more than 1,600 “Like” responses within 24 hours.

Fake accounts?

Nearly all the responses came from India, Egypt, Indonesia and the Philippines, with 75 percent coming from 13 to 17-year-olds, according to the BBC.

Many of the user accounts involved appeared to feature fake names and profile information, and to “Like” thousands of other pages, the BBC found.

The investigation renews concerns that Facebook is playing host for large numbers of fake accounts used for spamming and spreading dangerous links, an accusation denied by Facebook.

Sophos senior technology consultant Graham Cluley told the BBC that fake Facebook accounts can be “mass-produced”, and said Sophos was aware of instances in which a single person manipulated thousands of false accounts. Such accounts can be ordered to “Like” as many pages as possible in order to create a large and spurious community, Cluley said.

Facebook denies such claims. With regards to fake accounts, “we’ve not seen evidence of a significant problem”, Facebook said in a statement provided to TechWeek Europe UK.

The company admitted only that “a very small percentage of users” use pseudonyms, with many of these still representing real people with genuine likes and interests. Pseudonyms are against Facebook’s rules and the company said it has various tools and procedures in place to help weed them out.

Sophos’ Cluley noted that the “small percentage” of users still adds up to a large number of fradulent accounts.

“Facebook itself suggests that 5 to 6 percent of its profiles are fake,” he told TechWeek Europe UK. “That’s over 50 million fake profiles. I’d say that’s a fairly big problem.”

Facebook ad nauseam

Criticism of Facebook’s security and privacy measures is not new, with researchers warning that users are vulnerable to hacking, being presented with dangerous links and having personal information harvested.

Last year researchers from the University of British Columbia successfully set up a network of fake profiles and used them to collect 250GB of personal data from Facebook users. At that time Facebook said the experiment wasn’t representative, since the researchers carried out their activities using trusted university email addresses.

What is new, however, is the allegation that fraudulent Facebook activity compromises the value of the social network’s advertising.

“We know that fake Facebook profiles can be used by cybercriminals to spread spam and malicious links – it’s unclear as yet as to how much they might also impact Facebook advertising and bring that model into disrepute,” Cluely said.

The advertising issue is important for Facebook because the $104bn (£65.7bn) value placed on the company at its recent flotation is largely based on expectations of advertising revenue growth.

Facebook argued that the problems noted by the BBC appear to stem mainly from faulty advertising tactics.

“In the real world, if you hand out flyers for a pizza restaurant in Birmingham to people in Beijing and Mexico City, then you’re not going to get the customers you want,” Facebook said in a statement. “The same applies to online advertising.”

A survey released earlier this month by 33Across found that advertisers had begun shifting their attention away from Facebook following its flotation. In May General Motors said it would stop advertising on the social network, claiming that the advertisements weren’t effective.

Financial analysts have noted that Facebook’s advertising model is relatively “immature” compared to that of Google, but have said this could work to the company’s advantage

“To gain full industry confidence, it will be critical that Facebook spends a lot of time and resources developing its advertising model further,” said Phil Harpur, senior research manager for ICT at Frost & Sullivan Australia, at the time of the flotation.

“On the flip-side, Facebook’s immature online advertising model, combined with their massive global reach, gives them huge potential to grow for very high revenue growth over the longer term and compete head on with Google in terms of advertising revenues,” Harpur added. “Google on the other hand while still displaying solid growth in online advertising revenues, no longer has the potential for such rapid growth due to its more mature advertising platform.”

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