Tuesday, February 18, 2014

Facebook Fraud

You've got to Like this video about Facebook fraud...

I still don't quite understand brands getting involved into people's private social media feeds and conversations—essentially, I don't understand why brands are on Facebook.  I can understand advertising, but always find begging for Likes to be a reach. 

I've always suspected there was a great deal of fraudulent "Likes" and this video nicely walks through what has always been obvious to me; I just have never been sure why it isn't obvious to the marketers on, or the investors of, Facebook.

While I was consulting for a firm doing special development projects for eBay China in 2006, I visited a click-farm outside of Shanghai that was legitimately "mining for gold" for one of those massively multiplayer online role-playing games like "World of Warcraft". 

In a dingy unconverted warehouse, dozens of people, each handling up to four or five screens, created virtual wealth. At the same time, these types of click-farms were also churning out hundreds of thousands of confirmed registered users (CRUs) in exchange for real dollars via through eBay's affiliates program.

Over a few quarters eBay had hundreds of thousands of new inactive accounts for which eBay had spent hundreds of millions of dollars on. I watched the eBay staff try to weasel out of explaining to the then-CEO Meg Whitman about the low engagement of the few active CRUs. After two years and at least $1 billion of investment wasted—beyond the user acquisition debacleeBay China was quietly sold to Hong Kong-based Tom Online.  

And now people have been removed from the equation. Later, in another Shanghai office, I've also seen automated scripts that would vary the IP addresses to vote or Like things online.

And so the saga continues.

1 comment:

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