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Discussion Starter #1 (Edited)
This guy is a well known Australian/Canadian who produces science and physics videos on Youtube. He made this video describing a problem with Facebook's advertising system and found evidence that Facebook's revenue is based on fake likes. He's not saying the company is doing anything malicious, by the way.

For both investors and users of Facebook, there are interesting implications here. One is that a significant percent of Facebook accounts are fake (people and bots who just click "Like"). Another is that "Likes" are not very meaningful or useful, because of rampant fraud of fake likes. There is no point in paying money to promote your company via Likes... that part is clear.

It also makes me wonder how much of Facebook's overall business in a sham. They are an advertising company, and the ability to sell ads is based on the belief that buying ads (or promoting your page) gets you visibility among real potential customers. This is questionable, because if Facebook and/or fraudsters are gaming the market -- as they seem to be doing in some ways at least -- you can't really be sure how valuable those ads are.

 

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Here's what a click farm in Thailand looks like


Even an amateur analyst will see past fake clicks and likes by digging into the engagement data

There are definitively fake views and likes etc but I still think you'd get far better reach nowadays on social media than traditional mediums like TV which is dying fast. I used to laugh at cheesy internet ads but lately they have gotten to the point where they actually show relevant products and services.

My favourate brands are ones that sell direct to the consumer online and don't pay for ads. Rather they give samples of their products/services to social media savvy "influencers" who will do it for them . The cost of ads gets added to the price the consumer pays and self promoting holds much less weight than someone else doing it for you.

I recently met a guy who motorbike travels full time who is also an excellent photographer with a lot of social media reach in this niche. The new small companies who understand social media will throw products at him. The larger dinosaurs say he needs more likes and follows for them to even consider him.

The old dogs don't get social media or that he could just buy fake likes
 

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hey what a great thread topic

we all need to pay attention here
see the hot market in US fake news
 

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Discussion Starter #5
Why do we care about what any of these companies do?

It's relevant to investors, also people who work in companies who are spending $ on advertising too. Even the US government spends taxpayer money on Facebook advertising. Not sure if Canada does.
 

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Have you advertised through Facebook? People and businesses do it because it's incredibly effective. Fake reviews are a thing for sure. However, Facebook has very detailed analytics for their advertisers. It's very impressive. And you can commit very small amounts of money to see how well it actually works, i.e. ends up in real referrals with real deals. It's the fact that nearly everyone is coming back with more money that FB is rolling in the cash.
 

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Discussion Starter #8
Have you advertised through Facebook? People and businesses do it because it's incredibly effective. Fake reviews are a thing for sure. However, Facebook has very detailed analytics for their advertisers. It's very impressive. And you can commit very small amounts of money to see how well it actually works, i.e. ends up in real referrals with real deals. It's the fact that nearly everyone is coming back with more money that FB is rolling in the cash.
I haven't advertised through Facebook, but I've been involved with web based advertising for 13 years now. At times, it was nearly my entire annual income, so I know a bit about advertising, but definitely not an expert.

I'm skeptical of the value of web advertising and Facebook ads. Same with Google ads. They have these elaborate reports that make media people feel like it's money well spent, but stats are easy to misrepresent.

What is really an engagement in the end? How do you know that the $1 you spent actually contributes to real business revenue? People are so obsessed with 'visits to a page' or 'likes' or 'how many followers'... but how does that actually contribute to real purchases of your product?

I think there's tons of hype in advertising and it continues today. I think most of these companies are wasting their money buying ads, and I say that as a guy who's taken hundreds of thousands of $ paid by advertisers. Frankly, I think they're wasting their money and I'm astounded that these companies are willing to pay so much for advertising.
 

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I haven't advertised through Facebook, but I've been involved with web based advertising for 13 years now. At times, it was nearly my entire annual income, so I know a bit about advertising, but definitely not an expert.

I'm skeptical of the value of web advertising and Facebook ads. Same with Google ads. They have these elaborate reports that make media people feel like it's money well spent, but stats are easy to misrepresent.

What is really an engagement in the end? How do you know that the $1 you spent actually contributes to real business revenue? People are so obsessed with 'visits to a page' or 'likes' or 'how many followers'... but how does that actually contribute to real purchases of your product?

I think there's tons of hype in advertising and it continues today. I think most of these companies are wasting their money buying ads, and I say that as a guy who's taken hundreds of thousands of $ paid by advertisers. Frankly, I think they're wasting their money and I'm astounded that these companies are willing to pay so much for advertising.
Marketing is all about exposure. There are no marketing vehicles that can measure how much a 'view' or a 'like' translates to business dollars. Just like you have fake accounts and activity on Facebook, how do you know quantify the visibility and return on your dollar in a newspaper ad? billboard? TV? radio? Stats are based on whatever you would like it to be.

So if you believe Facebook has a large membership which will give you the adequate visibility, I wouldn't say its wasted money. The error some companies make in advertising is they choose only 1 avenue. All depends on your target audience, of course. But in general, the most successful companies continuously advertise everywhere.

Look at Coca Cola for example - who doesn't know them? Yet, their ads are continuous......
 

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A former Facebook adviser is urging governments around the world to shut down social media platforms until they can be reformed.
"The people at Google and Facebook are not evil," said McNamee, an early investor in Facebook.
"They are the products of an American business culture with few rules, where misbehaviour seldom results in punishment. Smart people take what they can get and tell themselves they earned it. They feel entitled. Consequences are someone else's problem."
He added that "companies with responsible business models will emerge overnight to fill the void."
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Centre for International Governance Innovation head Jim Balsillie, who became famous as one of the founders of Blackberry maker Research in Motion, also had dire words for the committee.
"Technology is disrupting governance and, if left unchecked, could render liberal democracy obsolete," he said.
"Data is not the new oil. It's the new plutonium: amazingly powerful, dangerous when it spreads, difficult to clean up and with serious consequences when improperly used."


IMO, facebook could be shutdown tomorrow and the world would be no worse - better in fact. The (select) wealth created by these fluff apps is ridiculous.
 

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Unless you are going to stop other sites from starting, a FB shutdown would only result in another FB incarnation taking its place. FB is merely a product of the internet and the natural human desire to connect. If not FB, something else. Simple as that.

And based on thousands of other examples, the next incarnation would most likely be harder to monitor than the last, i.e. more distributed and encrypted from prying government eyes, but likely just as susceptible to inside influences and advertising, perhaps more so. The next interation of Facebook will likely be result in far more groupthink as people are rebelling against perceived and actual attempts to influence their own opinions and natural self-reinforcement tendencies.

FB is not being shutdown, but even if it was, there is no going back. Welcome to your new reality, society better get ready.
 

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I think social media has just exposed the raw underbelly of human existence that for every positive, there are many negative forces that are being given voice. Many stars are increasingly eschewing social media for exactly that reason.

Take away twitter and you temporarily silence the crazies. Return FB to its roots reconnecting students.
 

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Discussion Starter #14
Facebook is being sued for spying on smartphone users. The lawsuit claims that Facebook activates the iPhone camera to collect valuable data on users.

But to be honest if this kind of thing bothers someone, they really shouldn't be using any social media application programs on a smart phone. The whole machine is one big spying device and all application programs, including Google's, collect an incredible amount of information on you.

 
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