We all know no one clicks on Facebook ads. So who's clicking on all those sidebar ads, the ones that helped Facebook become, for a time, a $100 billion company? Bots, claims one startup. Limited Run, a company that makes software for musicians, claims a whopping 80 percent of all their ad clicks were coming from bots, not actual people, thus driving up their ad costs with zero gain. They announced their findings on their Facebook page, which they note will be shutdown in the near future as they transition to Twitter, "where we don’t get shaken down":A couple months ago, when we were preparing to launch the new Limited Run, we started to experiment with Facebook ads. Unfortunately, while testing their ad system, we noticed some very strange things. Facebook was charging us for clicks, yet we could only verify about 20% of them actually showing up on our site. At first, we thought it was our analytics service. We tried signing up for a handful of other big name companies, and still, we couldn’t verify more than 15-20% of clicks. So we did what any good developers would do. We built our own analytic software.
Here’s what we found: on about 80% of the clicks Facebook was charging us for, JavaScript wasn’t on. And if the person clicking the ad doesn’t have JavaScript, it’s very difficult for an analytics service to verify the click. What’s important here is that in all of our years of experience, only about 1-2% of people coming to us have JavaScript disabled, not 80% like these clicks coming from Facebook. So we did what any good developers would do. We built a page logger. Any time a page was loaded, we’d keep track of it. You know what we found? The 80% of clicks we were paying for were from bots. That’s correct. Bots were loading pages and driving up our advertising costs.Limited Run isn't sure where the bots are coming from and they've made clear that they aren't accusing Facebook of using bots to drive up ad revenue. It's possible that the bots have been sent by a bitter rival or more likely, they exist for a purpose we simply don't understand. One commenter on HackerNews addresses just how difficult the issue is to fix. An experiment by the BBC a couple weeks ago returned similar results.Still, this is a big Facebook problem. Why are they are so many bots in the first place, and what is Facebook doing about it? Of course, the bot problem isn't unique to Facebook, as any even casual Twitter user knows. Just ask Mitt Romney, whose recent surge of "followers" were almost all fake. But Facebook does have a lot of money on the line. As TechCrunch reported, Facebook CFO David Ebersman acknowledged the problem in their recent not-so-hot earnings report and that they are working on it:"We refined and improved our methodology for recognizing what we call duplicate or false accounts. These refinements resulted in an increase in our estimate of duplicate or false accounts relative to our earlier global estimate, primarily driven by emerging markets such as Turkey and Indonesia… Since authentic identity is so important to the Facebook experience, we'll continue to try and improve our user management techniques with the goal of ensuring that every account on Facebook represents an authentic unique individual."But the even bigger issue remains: A lot of companies are struggling to make money with Facebook, which is looking more and more overvalued by the day. It's important to note that Limited Run’s bot problem was with straight advertising and not Facebook’s new "Sponsored Stories" platform, which seems anecdotally more effective. But I'd be curious to see some real stats, since Facebook doesn't offer them.Now if we are to be frank, if Facebook can't even get their web version right, I just don't see them figuring out mobile — and they're already way behind. So much for being the next Google (AdWords is still killing it). Maybe this whole social networking thing just isn't the ultra profitable paradigm shifting beast we all expected it to be. For Facebook, it seems like things will only get worse, a company with dwindling brand equity, led by a guy that no one really "Likes."Making money on the internet is hard. Making money on mobile is even harder, if Zynga is any indication. That IPO debacle is looking more and more like the swindle of the decade. The “potential” myth is fast crumbling.Follow Alec on Twitter: @sfnuop
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