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Facebook Works with Shady Ad-Scammers

Cambridge Analytica is not the only firm to illicitly benefit from Facebook’s business model. Former Facebook employees who worked in ad-sales have said it was common knowledge that some of their best clients scammed and used deception to the detriment of an audience greater than just Facebook users.

Oh, you’ve no doubt seen the types of ads featuring miracle diet pills, instant muscle builders, brain boosters, male performance enhancers, and other too-good-to-be-true come-ons. Facebook makes their hustling and hosing jobs all the easier.  These digital dealers in deception rely on folks called advertising marketing affiliates,  who in turn piggy-back on the wonderful job that Facebook does in hoovering users personal data to make “setting the hook” a snap.

As one affiliate, who deceptively sells skin-cream products online, put it: “They (Facebook) go out and find the morons for me.”

The affiliate marketers are middlemen who buy online ad space in bulk, run their campaigns, and earn commissions for each sale they generate. They are behind many of the crooked, catchy, and ultimately deceptive ads that pollute Facebook, Instagram, Twitter, and the Internet in general. Though many are above-board and have legitimate clients like Amazon and eBay, many more are always just a step ahead of the regulators or the law, raking in huge profits while they remain undetected.

A San Diego crew took in $179 million before being shut down last year by the Federal Trade Commission (FCC) for violating rules governing online conduct. Being temporarily derailed after such a profitable haul only emboldens them to start a new scam. It’s easy when a company’s model, like Facebook’s, is symbiotic with yours. This surprisingly continues to go, on and went on in 2017 , even as Facebook was under U.S. government scrutiny for enabling and abetting Russian trolls to hijack the Presidential election.

All this was revealed in a Bloomberg article to which such affiliate marketers provided information with the promise of anonymity. Thus assured, they were confident in declaring that Facebook, with its targeted algorithms, had “reinvented scamming.”  In so many words, saying that Facebook was doing the legwork in identifying patsies for them automatically.

The article goes to great length detailing the exploits of a Polish affiliate turned mega-marketing affiliate, Robert Gryn, and how he amassed his fortune. I won’t address the personal story. Suffice to say this marketing affiliate is the go-to for individual affiliates, and that Gryn estimated users of his tracking software place $400 million worth of ads a year on Facebook and an additional $1.3 billion elsewhere. Gryn is a step up in the food chain from the affiliate he once was himself.

It is instructive to see the process in action, and it isn’t very complicated. Let’s look at it. Say, a bogus diet pills maker wants a sales price of $100 a month and doesn’t care how it gets the order. The pill vendor contacts a broker, an ad affiliate network, and is willing to pay, say, a $60 commission per sign-up. The network spreads the word to affiliates, who design ads and pay to place them on Facebook and other places in hopes of earning the commissions.

The affiliate is doing all the work at this point - and taking all the risk by running the ad blindly- at least until someone acts on it and buys the product.  But if even a just a few of the viewers of the ad actually buy the product, the profits can be massive. But some of the risk is mitigated by the knowledge that Facebook is doing the heavy-lifting for them. They no longer have to worry about things like a prospect’s age, interests, or where they live, because Facebook’s algorithm has fine-tuned the targeting.  The process looks something like this:

A merchant wants to sell an item or items, the merchant is then connected to affiliates by an affiliate network. The affiliates make ads (which are often deceptive) and pays Facebook to display them. Facebook does its thing and engages with users who see and act on the ads. Once they’ve bought the item, the merchant, the network and the affiliates all get paid.

In the unlikely event that some affiliate or networks were caught-out and banned, this was no big deal. They would often buy a “clean” account from a “farmer” - often paying up to $1000 per name before opening a new Facebook account.  This would sometimes only be a temporary setback or inconvenience, as Facebook, with a wink and a nod at special parties organized for the purpose, would often encourage these same bogus advertisers to take out new ads. Even worse, some contributors to the article intimated that Facebook was aware of this fraudulent process, and encouraged them to spend more.

Facebook contends that the majority of deceptive advertisers are nabbed in a concerted review effort, and that it has no interest in profiting from those who slip through the net.

We are working hard to get these people off the platform. Winter is coming. They may get away with it for a while, but the party’s not going to last.”

This could be wishful thinking, for it is hard to see how this process is going to get cleaned up anytime soon.

Facebook is inexorably tied to ever-increasing ad revenues and it is woefully lacking in human resources to rein in its runaway technology. Less revenue means a depressed stock price, which is currently hemorrhaging over the Cambridge Analytica revelations. How much of a sacrifice do you think Mark Zuckerberg and the top-echelon are willing to make? We’re about to find out as Zuckerberg makes his way to Washington to explain to opportunistic politians who have their knives out.

Stay tuned.

Image credit: By Stopped_clock/Shutterstock.

Written by: Stan Ward

Stan Ward has enjoyed writing for 50 years. Writing has been a comfortable companion to a successful business and teaching career for him. Find him on Google+.

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