Tag Archives: social media

Facebook Accused of Click Fraud

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Today The Official Merchant Services Blog delves into the intricate and fascinating world of social media marketing and the pitfalls of Click Fraud. Our interest stems from a recent news story: Limited Pressing, an e-commerce company provides a platform for selling digital music and physical items, stated that they are dropping their Facebook page and removing their company’s Facebook presence because it determined that 80% of the clicks it paid for through Facebook advertising were fraudulent.

What is Click Fraud?

Click fraud is an illegal practice that occurs when individuals click through advertisements — either banner ads or paid text links — to increase the payable number of click throughs to the advertiser. The fraudulent clicks could either be performed by having a person manually click the advertising links or more typically by using automated software or Online bots that are programmed to click these ads repeatedly. Click fraud is sometimes perpetrated by individuals who use the tactic to increase their own personal banner ad revenues; but the most common strategy is click fraud gets harnessed by companies as a way to deplete a competitor’s advertising budget.

This is where Limited Pressing’s problems with their Facebook Page comes in. They feel that the click fraud was eating up their ad budget and making the oft-lauded and extremely popular advertising tool too costly and ineffective.

Limited Research

In this article at clickz.com, Limited states that it determined over a one-month testing period that 80 percent of their Facebook ad clicks were performed by bots. The company doesn’t really delve into where the bots come from, and instead focus their criticism on Facebook’s entire ad platform — suggesting its findings indicate Facebook has a big click fraud problem.

Limited detailed the process they used to determine this bold assertion of click fraud:

“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.”

Clickz.com pressed the company for more details on the process they used and the data Limited obtained. But the company had nothing prepared to share with the site yet.

Facebook Strikes Back

Facebook defended its program and its protocols in response to Limited’s claims. The company has said it is investigating the claims that Limited has made, and noted that it has defenses in place for such kind of fraud. A fake click, Facebook said, would come from a fake account, which would be disabled immediately upon discovery.

This Computer World article details Facebook’s defense that the company supplied in an e-mail.  The article reveals that Facebook has systems in place that attempt to detect and filter certain click activity, including repetitive clicks from a single user, clicks that appear to be from an automated program or bot, or clicks that are otherwise abusive. Facebook’s systems also look at whether JavaScript is enabled in the browser. And the company reports that according to recent data, nearly all billable clicks resulting from desktop web browsers have JavaScript enabled.

Also, in a second quarter earnings report conference call Facebook said they are continually making efforts to reduce fraudulent activity and fake accounts by becoming better at detecting duplicate accounts.

As reported by clickz.com:

“On a macro level, Facebook now has independent ROI data from more than 60 advertising campaigns using a variety of third-party methodologies like panels and marketing mix models. The results show that 70 percent of campaigns resulted in a return on ad spend of 3x or better, and 49 percent of campaigns showed a return on ad spend of 5x or better.”

Facebook COO Sheryl Sandberg said during that conference call that “attribution is an issue. Marketers need to tie sales back to multiple touches; they may see on Facebook and search later. Our ads work and the ROI is there, so we’re focusing on education.”

The Big Picture

This issue is an important one for payment processors and merchants alike. Much has been made of social media and marketing. Facebook’s ad service is a huge windfall for the company. Much of what I myself have learned about marketing through social media has come directly from webinars and videos I’ve seen given by Sandberg. So if Limited’s claims are anywhere close to accurate, this could be devastating for Facebook — and equally positive for competitors like Google and its Google+ social media hub that still trails Facebook in popularity.

Essentially Facebook ads are at the forefront of the immense push people have made into spending money on social media marketing campaigns. So if only 20% of that money is doing the job, it’s an extreme waste of resources for businesses.

In Facebook’s Defense

There’s much to be said in defense of Facebook at this time however.

First of all, the company is very diligent in its pursuit of click fraud. In our January blog, we explored the activity called Clickjacking and detailed how Facebook has been fighting to curb that kind of fraud. And since the company is now extremely invested in its own profits after its IPO, it really is common sense that they are being forthright in their responses and really are doing the best job they can to curb fraud.

Secondly, Limited’s credibility takes a hit with the other issue it brought to light in its criticism of Facebook. It claimed that Facebook was  allegedly holding Limited’s  page name hostage. What Limited said was that it wanted to change its name on its Facebook page and that after repeated attempts to contact Facebook about the issue, Limited received a response. Facebook, Limited alleges, would make the name change for Limited if the company agreed to spend $2,000 a month or more in advertising.

Here’s where Limited’s credibility starts to wane. Limited Pressing wants to change its name to Limited Run. That name has been in use by a magazine since October 2010. So there’s no way Limited could get the name changed. Facebook also states that it does not charge for name changes. Facebook clarified that they have a process that business pages have to go through to get a name changed so that it doesn’t confuse its users if a business repeatedly changes its name or changes it to something unrelated. So Limited’s claims of Facebook holding its desired name hostage don’t seem to really pan out, hurting their credibility with their click fraud data.

And finally, the data itself. Limited’s claims tend to run extremely counter to all data released by Facebook itself and Limited has not shared the data or the services it used or page logger it created. They claim more details are forthcoming, but as we saw with the name change claim, the trustworthiness of the information could be very much in doubt.

The Bottom Line

So what are we to make of all this?

I’m taking it with a grain of salt. The accusation is strong enough and Limited does assure us all that they did a lot of data collection. If it turns out to be on the mark, then this is a really big hit for Facebook and something merchants need to consider in terms of how they go about using social media.

Also, a problem I have with Facebook’s defense is that there’s a loophole in the terminology they’re using in their statements: They say that when they detect fraud from fake accounts, they close the account. Simple right? Fraud, fake account, banhammer, done. But the loophole is that fake accounts need to be verified as fake to get closed. And skilled fraudsters will have these fake accounts looking as real as possible or simply replace it just as quickly as it gets nuked. My own experience with FB “drama” leads me to believe that on the one hand I believe Facebook is diligent in canceling the fake accounts it finds, but that the creation of fake accounts is too easy and too easy to fake properly that Facebook may not be affecting the fraud as much as it claims.

Still, I am very disconcerted by the name change issue as it’s pretty obvious to anyone who uses Facebook that it’s not Facebook’s fault you can’t have the name McDonald’s because McDonald’s already has the name.

In conclusion, I would say Facebook Ads are still right where I thought they were before I read these news articles. The huge push into social media is indeed a very powerful marketing tool that many merchants should embrace and utilize to their own benefit. But it’s a refined and subtle tool. It’s not something you just throw money at and expect clicks to turn to profits for your business. Host Merchant Services has found using Facebook ads increased our following quite a bit, but didn’t give us the targeted following of users that we really wanted. In short, we felt we got a lot of bots.

Part of that was our own inexperience with the tools available — though many video and webinar assistances later from Sandberg and Facebook we know how to use the tools much more effectively — and part of it was the Facebook culture itself. Businesses don’t always fit smoothly into the community. Facebook is far more casual and social so a business to business entity like our company, no matter how tech savvy we are, runs into some obstacles on Facebook. Finding the right people to send the ads to is difficult because our target audience isn’t as neatly confined by the tools Facebook provides — for example we found more success with the interest of “tacos” than we did for “business owners.” The more professional community of LinkedIn or the far more expansive twitterverse has ended up being a bit more successful for us.

I feel this might be part of what Limited was running into. I think there is indeed a substantial presence of fake accounts and bots on Facebook. But I also think that Limited’s target market, because of what they do as a business, isn’t exactly something folks on FB are hot to talk about and link-share. What is the hook that people on FB, already too distracted by pithy quotes and vaguebooking activities of their close knit group of friends, to talk about some business’ offer on stuff one of their affiliates can sell?

The TLDR version? Yeah, Facebook ads have a lot of bots and no Facebook can’t catch em all like Pokemons. But 80%? That number seems a tad high. And Social Media advertising is still a very valid and strong marketing tool for business owners.

Mobile Commerce

Mobile Commerce Concerns [2023 Update]

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Today The Official Merchant Services Blog turns its tech-obsessed eyes once again to the Mobile Payment Solution sector. Recently, Host Merchant Services became fully mobile and able to offer a mobile payment solution for Android and iPhone devices. This expansion continues, and HMS now also provides a payment processing solution for iPads as well. You can read about the expanded HMS Services in our April 9, 2012 Blog Entry.

Mobile devices are ingrained in the lives of consumers these days. Like the recurring ad sarcastically states, the smartphone beta test is over. And people are wandering around everywhere with their phone bringing their social media, camera, and buying power with them.

Suri, the voice of the iPhone, is holding the hands of stars from Samuel L. Jackson to Zooey Deschanel, helping them manage such difficult life tasks as making gazpacho to putting off cleaning till the next day on one’s calendar.

Coming with this ingratiation into our daily lives are two key elements.

  1. We’re really just one artificial intelligence glitch/accident/sabotage away from launching the type of dystopian sci-fi worldview found in Terminator, The Matrix or Magnus Robot Fighter.
  2. We’re flying full force into a world where we’ll also start to wave our phones around like a Hogwarts Magic Wand, paying as we go from place to place, store to store.

Mobile Payments are brisk and bustling because people are buzzing to take advantage of the convenience they offer. Here’s a graphic based on data compiled by the AITE Group showing the trend in spending via smartphone in a 5-year stretch:

But it’s not all phones-n-roses. As one might expect, the state that’s home to Cyberdyne Systems and our eventual AI-overlords Skynet, has a university — the University of California — that did a study titled “Mobile Payments: Consumer Benefits and New Privacy Concerns.”

The bottom line of this study is that American consumers are still wary of what this convenient technology will bring. The study found some interesting answers to questions about consumer thoughts on their privacy.

The study found that respondents overwhelmingly oppose the revelation of contact information to merchants when making purchases with mobile payment systems and an even higher level of opposition exists to systems that track consumers’ movements through their mobile phones.

This article by Kit Eaton at Fastcompany.com dissects the numbers in the study. Eaton states that: “The numbers are stark. When asked if they thought their phones should “share information with stores when they visit and browse without making a purchase,” 96% objected to the tracking, 79% said they definitely would forbid it, and 17% said they “probably” wouldn’t allow it–meaning just 4% were indifferent or positive about the idea. When the question was instead about information sharing (phone number, address, and so on) at the actual point of sale, 81% objected to phone-number sharing–a mere 15% said they’d probably allow it and 3% definitely so. Similar figures emerged when the information shared was respondents’ home address. “

This is all well and good and you can download the study here at this link. But what the study seems to overlook is exactly how many people, many of the people most likely polled in that very study, are already well past the point of no return in terms of their privacy concerns.

Any of those who object to tracking are likely already being tracked by Google and Facebook, social media they use with ease and frequency from their smartphones.

All those who object to sharing contact information may have already shared this information easily and readily when making an online purchase in the past few years. And statistics indicate that e-commerce is booming and replacing brick and mortar in the retail sales tug-of-war.

Eaton catches on to this flaw in the study, and states in her article: “And that’s the key to unraveling this problem right there: When you do use a current-tech store loyalty card you are effectively voluntarily giving the store your personal information, and “tracking” yourself. It’s why the cards exist, of course–they’re partly there as a sales incentive, to get customers back in the door via money-off offers, but mainly so the store can collate information about customers and work out what kind of products to stock, what offers to run, and what future products to plan for.”

And Eaton even points out that in a Pew Research Survey, 71% of Americans use the internet for shopping — meaning that they’ve already typed in their personal contact information.

So essentially, Mobile Payments seem primed to take advantage of the marketplace. The worry over security is still genuine to some extent — identity theft and phasing scams and data breaches abound as we get more and more tech ingrained. But in the end, the American consumers already dove headfirst into this when they fell in love with social media. The tweets, the +1’s and the Likes have already been tracking you. So when Facebook transforms itself into Skynet, or simply when Facebook and Google go toe-to-toe with Visa in the titanic tussle for your smartphone swipes … your dollars will be as easy to find as your latest status update or check-in.

Google+ is Here for Businesses [2023 Update]

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The Official Merchant Services Blog has been following Google+ and its beta for awhile now. We previously detailed the potential upside of Google+ for small businesses in this blog entry. The major setback to Google+ for businesses at that point time was that Google hadn’t fully allowed businesses to function in Google+.

That changed three days ago. On November 7 Google announced that businesses were fully allowed to add pages and started accepting submissions. No longer restricted to just personal accounts and no longer tied to strictly Gmail, Google+ gave users the ability to utilize their fledgling social networking tool.

Host Merchant Services jumped on the offer, and you can find our Business Page here. You can also find our local small business page here.

So now that Google has opened the flood gates to businesses, what is the impact going to be? Should you jump right in feet first? What will this do to help your business and its marketing?

The Nuts and Bolts

First let’s review what Google+ Pages can functionally do for businesses:

Google+ Pages are different from regular use profiles. They have some limitations, such as Pages can’t add people to circles unless the page is added first or mentioned. Pages default privacy settings are public, they can’t +1 other pages nor can they +1 stuff on the web. Pages don’t have the option to share to “extended circles,” they don’t receive notifications via e-mail, text or in the Google bar. Pages can’t initiate a hangout on a mobile devices.

Google+ Pages also have advantages, such as they can be made for a variety of different purposes (brands, shops, celebrity figures, sports teams). They have the +1 button and can +1 certain things. Local pages include information about a business’ physical location (map, address, business hours and contact details).

The Pros

One  big factor for Google+ Pages right now is the functionality of circles. It’s more flexible and offers merchants more abilities than its Facebook equivalent. G+ Pages can use circles to segment different groups of connections, better organizing a business’ connections with its customers. The default settings already demonstrate the power of this over Facebook, as it sets up the circles for “customers,” “VIPs,” and “team members,” making it easy to target how you share information with your followers.

Another big plus for Google+ is the Hangouts feature –– which allows users to set up one-click video conversations with other users, fans or colleagues. The potential for your business from Hangouts is quite robust and Facebook offers nothing like that. You can utilize this as standard customer service, or instant face-to-face feedback from customers; you could also utilize it for marketing services, or running mini-workshops or webinars. That’s just a few off the cuff ideas on how to utilize this feature.

And then there’s the as yet unrealized potential of Direct Connect –– the feature that lets you quickly navigate to a Google+ page (and add that page to your circles) directly from a Google search bar. And that’s the real strength of Direct Connect: The Google search bar. This feature is still being worked on so it only works for a handful of big brand name pages, such as Pepsi. But this is definitely something that will shape businesses and what they can do, because it ties the social media extension into the Google searching functionality. Which is the bread and butter of Google.

The Cons

What are the cons of Google+? It’s still new, still in testing so there are some very noticeable drawbacks to Google+. Right up front, one of the biggest ones is G+ Pages do not currently allow multiple page administrators. So while with your Facebook page you can have multiple people in your business accessing the page and managing the content, G+ still only has its Pages as an extension from a single account. That needs to change. And Google is aware of the issue and is working on it. But for now it does create a bottleneck in terms of usage and is an obstacle for businesses in terms of utilizing Pages as powerfully as other social media options.

Another drawback is that Google+ does not allow contests. This TechCrunch article reveals that there’s explicit language in the Google+ Pages terms of service prohibiting businesses from running contests, promotions, sweepstakes, offers, or coupons. That’s a big blow for businesses, as all of those activities are popular with other social media outlets. From Facebook to Groupon, businesses are extensively using Social Media to promote and market through coupons and contests.

And another problem for Google+ Pages stems from the difference between a Page and a Local Business Page. The Local pages include your business’ location, and is tied into Google Maps and the Google Local features. But it is separate in some of its functions from a page setup based on the other list of purposes. Google explains the difference as: “Currently, Place pages and Google+ Pages must be managed separately. A Place page provides information about a business and makes it easy for customers to find local businesses on Google Maps and local search; while a Google+ page provides business owners with additional ways to engage, build relationships and interact directly with customers.”

Many businesses already have their Local entry set up through Google maps. So this raises some concerns and issues with compatibility that Google itself opened up by making the Local entry available in the Google+ Pages signup.

The Verdict

Google+ Pages have revitalized the Google+ project. It launched with a lot of buzz and then it tapered off. It comes storming back into peoples’ attention with this new development. And even with the few obstacles and issues it currently has, it’s definitely worth getting your business involved in it. From the start it benefits your e-commerce presence. Right now Google+ may not overtake the established juggernauts, like Facebook. But it’s really quick and easy to create your G+ Page and get it set up. Tying it into other social media outlets and continuing what you were already doing is what The Official Merchant Services Blog would advise.

Keeping it fresh and active will help you in the long run, because in terms of marketing your business, the potential that Google+ has over all the other social media tools is that it’s going to be able to impact the Google search engine more directly. And that’s the bottom line for businesses: Page ranking. The value to be had in the long term is too great to not get started now. As Direct Connection gets worked on and improved and as Google+ begins to ramp up its efforts to compete with Facebook and profit off of the investment in its social media tool, the strength of the search engine is what everything will hinge on. Including your business and its online presence.

So give Google+ a try, get your Page going and prepare yourself for more SEO opportunities.