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Tuesday, May 29, 2012

Facebook Ads and Spam: What's the Difference?

Posted By on Tue, May 29, 2012 at 11:04 AM

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People who don't closely follow the online media/advertising business might wonder: How can Facebook be such a great business, commanding a $100 billion valuation when it went public, when it's filled with cheesy, lowbrow ads that are just this side of spam?

Those people will be glad to know that some of the people who do closely follow the business are wondering the same thing. Michael Wolff, the generally execrable media writer, wrote a rather insightful article for Technology Review last week in which he pointed out that Facebook's main draw for advertisers -- that it can target ads directly at users, based on their individual desires -- is a chimera. Wolff is far from the first to make this observation, but given the heavy rotation his article has gotten, maybe the idea will finally catch on. It certainly seems to be catching on with investors, who have been steadily bidding Facebook's shares in the week since the company went public.


If the web's vaunted targeting abilities were so great, online ad rates would be rising. Instead, they're falling, inexorably. Doc Searls, in a response to Wolff's essay, outlines the reasons that targeted advertising isn't the answer for either media companies or legit advertisers. Basically, targeted ads address a problem that doesn't exist. People who know what they want will seek it out. While targeted ads might work at the margins in some circumstances (you're a fan of Los Lobos, so an ad for an ad for an upcoming Los Lobos concert in your area is actually helpful), they don't work in general because ads are supposed to either strengthen brands, or else tell you about something you didn't know you wanted.

Furthermore, at least at this stage, ad-targeting often doesn't work very well. I'm a fan of Los Lobos, and Facebook knows this. So recently, it let me know about an upcoming Los Lobos concert -- in Albuquerque. Thanks a bunch.

Wolff says that Facebook's inevitable failure will lead to a collapse of the entire web-ad ecosystem. I don't know about that. Wolff likes to be provocative just for the sake of it and to make hard assertions and predictions that are based on the flimsiest of facts. His dire warning was no doubt what got the article so much attention. But his underlying analysis of Facebook's business model, and of the underlying problems with online advertising in general, is spot-on.

If you have a Facebook profile, take a close look at the right-hand side of the page. Maybe it's the first time you've ever done so. There, you will perhaps find a mix of ads ranging from the useless to the obnoxious. There might be one or two that are either legitimate brand ads from well-known companies (though most likely not) and there might be one or two that actually interest you. For the most part, though, you will see cheese -- "desultory ticky-tacky," as Wolff describes it.

The cheesiest of them are often the ones that make "targeting" so transparently silly. For instance, I have "liked" Rachel Maddow's Facebook page. Presumably based on this fact, Facebook presented me with an ad headlined "Is Maddow Dangerous?" which links to a site called Political.com. The site purports to be an "objective, reliable news source that you can trust to accurately deliver what is going on in the halls of power in Washington." But it's really just filled with inane online polls. Answering a set of poll questions leads to a page where you have to fill in your personal information in order for your answers to count. There is no information given on the site indicating who is behind it. Its domain name is hidden behind a proxy service. I can only conclude that it's survey spam, but it's paid-for survey spam, so it doesn't violate Facebook's terms of service. When the same kind of crap shows up in your news feed, it's spam. When it shows up in the ad rail, it's a "legitimate" ad.

This reveals two important facts: One, Facebook knows that I have "liked" Rachel Maddow's Facebook page, but it also apparently thinks I'm a moron who would fork over my personal information to a sleazy spammer; and two, ad rates are so low that spammers don't have to pull the usual sleazy tactics of tagging photos or spreading fraudulent links. Spam costs nothing. Ads on Facebook cost next to nothing, but carry the additional benefit of not being deleted for a terms violation. And they appear "legitimate." They're not any less skeevy, however. In a way, they are more.

No wonder General Motors recently decided to avoid this mess.

Dan Mitchell has written for Fortune, the New York Times, Slate, Wired, National Public Radio, the Chicago Tribune, and many others.

Follow us on Twitter at @TheSnitchSF and @SFWeekly

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Dan Mitchell

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