How To Make 45K a Day Scamming Facebook Ads

Posted in Paid Marketing

But before you scroll down to find out how, I want to tell you that you can fly Southwest for FREE.  Yes—Southwest is giving away free tickets in a promo that expires tonight! Or so the ad on the right would seem.  It’s got the Southwest Airlines logo and is worded such that you’d think that Southwest is running this Facebook contest.

FB-southwest-ad

When you click on the ad, you’re taken to a page to claim your prize.

claim-prize-page

Facebook members who see this page might know it’s not real—that Southwest is not running a promotion, but that someone else is collecting your information to resell and run their high volume email deployment activities.

In the off chance you scroll down the page to the minuscule print, there’s mention of you needing to submit a credit application and be accepted for some financial products.  Unfortunately, many people don’t read that fine print. If they did and clicked to view the Official Rules, they’d see that they have to complete several offers within each of 3 categories—in this example, it’s complete some Top Offers, some Premium Offers, and some Prime Offers:

topoffers

Notice that the “Green Tea 1000” is just $4.95—you only pay shipping and handling.  But then you’re billed a recurring $95 for the “Value Direct Program,” aptly named, since it puts value directly into the pockets of these affiliates.  Whatever you’re getting, it’s just more “free” stuff, which requires further and further purchases.

Now let’s look at the Prime Offers.

primeoffers

Again, more of the offers called “rebills,” because that’s exactly what they do.  They’re also euphemistically called “negative option,” since unless you jump through some hoops, they’ll keep charging your card.  Is this evil?  Probably not, since Columbia House was sending cassette tapes in the mail even when we were  in high school years ago.  What’s going on in these Facebook ads is just an updated version of what you see on late night TV.

Let’s look at the Premium Offers.

prem-offers

Ah, now you have to complete several of these offers requiring minimum purchases of at least $2,000.  The furniture offer appears cheaper with a $1,500 minimum, but note that it’s before taxes and shipping—and lest we forget, furniture is not cheap.

Let’s take a look at the privacy policy.

pirvacy-policy

You have now given complete permission to these guys to sell your personal information to anyone they like and to message you any time they like via email, phone, SMS, and direct mail.  It’s not technically spam, since it’s complying by the law—they are spelling out in detail what they’re going to do with your data if you actually care to read it.

“But wait!  There’s more….”

express-consent

You’re also agreeing to subscribe to a premium SMS service.  Have you heard of mobile phone offers like LuvCrush and IQ Quiz?

In trying to get your “free” tickets, you’re now signing up for recurring weight loss products, credit cards, mobile horoscopes, dating sites, anal laxatives, and stuff you’re just dying to buy.

But even if you don’t buy anything, they still get your data.  And here’s what else they publically claim they’re going to do with it:

other-use

This is part of something called Behavioral Targeting or Retargeting. The affiliate can “cookie”  you and now can tie your cookie and IP with other instances where you’ve been seen on the web.  If  an affiliate wants to, he or she could target people who have just finished a purchase on Expedia.com and show those people ads wherever they go.

It’s amazing personalization that’s done for your benefit to “provide advertising or special offers that we think will interest you.”  Large data aggregators, not just folks labeled as “spammers,” are combining their databases together to form a complete picture of you.  They have access to public records such as drivers’ license data and phone books—then can tie it with product warranty registrations and forms that you have completed on the web to claim your “free” prize.  Scary, huh?

gas-ad

Let’s look at one more example.  Here we have “free” gas being offered.  It could be some teenager somewhere, since I took this snapshot on January 6th—but maybe it was already January 7th in their country.  You’ll see the ad targets Maine residents, though I’m listed in Colorado.  The affiliate couldn’t get their dates or locations right—to properly take advantage of the hypertargeting that Facebook allows advertisers. It also means that Facebook’s ad review team let it slip through, too.

Here’s the page you’re sent to.

gas-ad-big-page

Better hurry, since there are only (3) cards left for Maine residents—in the same way that (5) people have a crush on you.  There’s a FedEx logo in the bottom right, which would seem to imply an endorsement or sponsorship.  That’s about as clever as landing pages I’ve seen that say “As seen on Google”—which is nothing more than to say they’ve run at least 1 impression on AdWords account.

So if you want to cash in on this totally awesome Facebook advertising bonanza—and MySpace, too, since they’re far more lenient on ads—follow these simple steps:

  • Find a few products of legitimate brands. The more legitimate the brand, the more trust you can suck out in parasite fashion.
  • Create pages for a free giveaway. Design them too look as official as possible.  If you don’t know how to write in complete sentences yet, hire an unemployed journalist on Elance or the like.
  • Sign up for an affiliate network. You want to create or promote something called an “email or zip submit.” In fact, you can probably skip the first two steps (which require a lot of effort) and just start promoting what’s already there—free cameras, gas cards, restaurant gift certificates, or whatever is hot right now.
  • Set up ads on Facebook. Tailor your ad copy so that it implies that the brand is actually sponsoring it.  Use creative copywriting skills to imply that there are only a few left and that it’s for males 50-52 in Duluth, Minnesota only (and make sure that you set your demographic targeting on Facebook to match). If you really want to juice conversions, tell the user that you’re looking for testers of the product (the new Google phone, perhaps) and that testers are allowed to keep the product when testing is done.
  • Sit back and collect your money. That is, of course, until you get in trouble, since the FTC will eventually catch up to you.

What about monetization?

Let’s break down the mechanics of how a few bad-apple-affiliates buy traffic on Facebook.

  • These inappropriately personalized ads get a much higher CTR than most ads– perhaps 0.3% versus perhaps 0.07%. That allows them to pay as little as 10-15 cents a click, instead of 70 cents to a dollar.
  • With an email/zip submit, as these offers are called in industry parlance, there is a multiple page submission process, and the affiliate is paid upon completion of just the first page (about $1.50 a lead, plus or minus).
  • Thus, it’s a shared risk between the affiliate (whoever is buying the ads on Facebook) and the underlying advertiser (the ad network or advertiser controlling the offers).
  • The affiliate has to ensure that their cost per lead is below their revenue per lead, while the advertiser is risking that the affiliate’s conversion rate is above their projection– that a certain percentage of the folks who complete the first page will go on to sign up for one or multiple offers.
  • Even if only 5% of these leads do sign up for one of the offers mentioned here, that’s a cost per lead of only $30 (which is $1.50 divided by 5%).
  • If they sign up for 5 or 6 offers, that lead can be worth a couple hundred dollars, making this very profitable from the advertiser’s standpoint.

From the affiliate’s angle…

  • If he/she’s being paid $1.50 a lead and 20% of the clicks become a lead (provide their email address), then his revenue per click is 30 cents.
  • If his cost per click is 15 cents and he’s earning 30 cents, then he’s doubling his money.
  • If he buys a million impressions a day (which is quite small), at a CTR of 0.3%, he’s generating 3,000 clicks and earning 15 cents a click, for a profit of $450 per day.
  • If he buys 50 million impressions a day, then he’s at $22,500 in profit per day off gross revenue of $45,000 per day.

Thus, you can see how it’s possible to come close to six figures a day, especially if distributed across Google, MySpace, media buys, Facebook, and other channels.  The question on how much money is being made on Facebook through these offers– nobody really knows.  But if you can determine how many impressions are being served through the self-serve platform and then estimate the percentage of ads that are of this type, you’ll get pretty close.

Why does this matter to us?Jonah Stein coined the term virtual blight, referring to how a few bad ads cause a negative externality on legitimate publishers.  Users might begin to distrust all ads. Milk whatever analogy you like—Little Albert afraid of all white things for life, a cat burned by a hot stove or the vacant drug house that brings down property values in the whole neighborhood.

How about this ad?  Do you trust it?

mcdonalds-ad

These are survey ads that affiliates sometimes create on any current topic. Doesn’t matter which.

  • Who will win the Super Bowl?
  • Should the US withdraw from Iraq?
  • Do you think people play Farmville too much?

Or it can be in the affirmative on causes that polarize people:

  • Vote now to stop gay marriage!
  • Save innocent lives—support banning cell phones while driving.
  • Stop Obama’s nationalized heath care coverage (run this in the right states, please).

Then send them to one of those pages—first, a page where they’re prompted to enter their email and then the second page where they enter personal details— since we have to verify you are who you say you are, in case there are spammers out there who will try to rock the vote. Then, get people excited—maybe hot under the collar a little.  That’s how you’d get them to convert.

Facebook, like Google and other advertising platforms, has been doing their best to keep up with spammers. However the very nature of behavioral targeting opens fascinating and difficult new avenues for a small percentage of affiliate-spammers to exploit.

Consumers should be wary when clicking on Facebook Ads and read the fine print.   Meanwhile some legitimate advertisers, who play by the rules, are growing concerned that the value of this massive and emerging channel might erode do to consumers’ lack of trust.

Opinions expressed in the article are those of the guest author and not necessarily aimClear.

  • wendy Kenney @23Kazoos

    If the spammers would put as much effort into doing some good for a change, imagine what a difference we would all make!

  • Dennis Yu

    Wendy,

    Good point. Though we would wish that others do the right thing, we can’t count on opportunists not doing these things. Hence, we need some regulation and consumer education.

  • steveplunkett

    Marty,
    I can’t believe someone actually took the time to actually show the sad truth about FaceBook and a very common type of scam advertising. Not only do they charge you but then your information ends up who knows where, identity theft, more junk email scams and phishing attempts…

    I’d like to say one day you will get the time back that you wasted but maybe it’s not a waste if you protect a few people from scams that we are deluged with on FaceBook.

    GREAT ARTICLE!!!

    THANKS!!!

  • Marty Weintraub

    @steveplunkett: Thanks, when Dennis approached us about the guest post we were pretty taken by the audacity of the scams. We were happy to invest the time. Thanks for stopping by.

  • Harrison Gevirtz

    as someone who has not only marketed and partnered on SIGNIFICANTLY more misleading ads for copies like this with Dennis as well as Adult campaigns snitching out posts like this are a joke. It’s just jealous because you have no money to take action against others exposing you in this industry. He just failed and is trying to expose a legitimate industry for something it’s not!

  • Marty Weintraub

    @Harrison Gevirtz: Ah, I knew the spammers would stop by. So let me get this right…your point is that you’re a con, the author used to be a con with you but changed paths, and…umm…and…there must be a point at the end of this lower-case-rant Harrison. help our readers understand.

    I don’t think anyone would argue that the ads highlighted in the post are legitimate anywhere but in the con-artist world. …tell ya’ what…why don’t you speak directly to each allegedly bogus ad mentioned in this post, specifically, with your explanation of which part Dennis got wrong. Refute the points then Harrison instead of waving empty epitaphs about how the writer used to break the rules with you. The ads sorta’ kinda’ look like scams. Which part did the author get wrong then?

  • Harrison Gevirtz

    @Marty well I’m no spammer now a days. All i’m trying to say is that Dennis is a complete con, let me explain.

    First of all in regards to the ads: Facebook requires you to mention you have to complete offers to get a gift card, iphone, laptop etc (For example” Get your iphone when you complete 2 gold, 3 silver, and 4 platinum offers” I’ve seen ads like that. but I have NOT seen ads like Dennis is showing and I run an affiliate network which has me browsing facebook to see affiliates ads all the time.

    There’s always going to be someone who pushes is a little bit and does break the rules but that does not mean most of affiliate marketers are doing this.. They are in this for the long run and don’t write ads like that to make their livings. In regards to the FTC, all of those pages are FTC Compliant ..actually Valueclick was Fined a few years ago for doing things scammy and spammy but they as well as other advertisers like that keep the check boxes, terms, etc all on the page as well as on the second page where more informations collected.
    The end.

    [Editor’s Note: The commenter made unrelated personal comments regarding the posts author’s character and we removed them after contacting the commenter.]

    • Marty Weintraub

      @Harrison Gevirtz: Thanks for clarifying. I appreciate it. I just want to make clear that some of my best friends are affiliate marketers. To my mind they’re the best marketers in the world. They push, but not to the point of being offensive or illegal. In no way am I attempting to dis’ wicked cool affiliates.

      “but I have NOT seen ads like Dennis is showing and I run an affiliate network which has me browsing facebook to see affiliates ads all the time.” So are you suggesting that the screen captures are mockups because you have not seen them? I just want to be clear what you’re trying to say here.

      I’m not defending anyone here. I’m not calling anybody out. I am not involved in this fight. aimClear Blog is hosting it :). Dialog is good right?

  • Harrison Gevirtz

    Dialogs Good, I expect dennis to remain silent though.

    I don’t know if somehow those ads did get through or if they are recent or plain fake but…I’m just trying to not only defend affiliates and the get a Free X Advertisers but Facebooks Ad Approval Dept. Who spends a lot of time monitoring and getting rid of ads like that. There’s only so much they can do though right.. This post is trying to piss off someone Dennis, It’s how you work.. But WHO?

  • Dennis Yu

    Harrison is correct that the ads being shown are legal and likely compliant with most of Facebook’s policies. However, there is a higher standard at play, which is whether the user felt they were mislead and whether these ads cause spillover damage to advertisers who actually are marketing under their own brands. The fact that there is fine print at the bottom of the page is not sufficient for a young girl who thinks that she’s about to get a free ipod. For the category of offers called email submits, this is the norm.

    When real brands want to advertise, consumers will question whether it’s truly an sweepstakes to win something free or whether it’s an email submit designed to collect your information and sign you up for recurring mobile billing charges. I think these scammy advertisers would be hard pressed to argue that such consumers expected to sign up for weight loss pills, mobile phone offers, or other such items when they clicked on the ads.

    There are a few bad affiliates running such offers that often give legitimate affiliates a bad name. It’s in the interest of Facebook and direct marketers in general to clean up their act for the sake of everyone involved– to not “pee in the pool”. If this breed of affiliate marketers want to do the right thing and act honorably, then we encourage them to take the higher standard of not misleading versus not illegal, plus keep a discussion on the issues, not personal attacks.

    Facebook’s team has done a commendable job shutting these ads down, but you have to admire how crafty certain affiliates are– especially when there is so much money to be made at other’s expense. It’s cat and mouse.

  • Gail – GrowMap

    I commend Marty and Aimclear for having the fortitude to publish this guest post from Dennis. Regardless of what Dennis may have been involved in previously, he is now making a stand that intentionally misleading people is not the way to do business.

    There is a difference between illegal and unethical as those who profit from conning the public are always happy to point out. Even if you make something “legal” that does NOT make it right – and it DOES make the public gun shy.

    Shipping is the largest complaint in every ecommerce store and my theory is that is because people remember the direct mail and TV infomercial con of selling the product cheap and piling on the shipping and handling charges. All these years later and the impact of that con continues to affect sellers.

    Affiliate Marketing CAN be a HUGE force for good. I champion it and encourage affiliates to focus their efforts on promoting quality products and services for deserving small businesses.

    Affiliate Marketing also has serious issues with affiliates who steal from each other and merchants with ever more difficult to detect methods. If you want to understand how that is being done I recommend looking up Adam Riemer. He’s at Affiliate Summit West in Vegas this week and can show you.

    Adam blogs about what to watch out for and works with some affiliate systems like ShareASale to keep them clean. Other merchant affiliate managers are now promoting their programs as “parasite free” and it is being discussed widely on forums like ABestWeb.

    It is in the best interests of merchants, affiliates, brands and consumers to do what we can to create a higher standard whenever possible.

    • Marty Weintraub

      @Gail: Thanks for the comment. BTW, I’ll be at Affiliate Summit on the 19th for meetings so if anyone would like to connect, ping me please.

  • Gail – GrowMap

    Thanks Marty. Many in our blog collaboration group will be there so I let them know about you in our Event section and when you would be there. They may have clients who could really use the most brilliant SEO I know (you).

  • Mike

    Why don’t we start naming these outfits so everyone knows who they are. Why should they be allowed to operate w/o disclosure.

  • Jonah Stein

    If you make money deceiving users and slamming them into hidden charges that show up on their phone or their credit card, you are a scammer and a parasite. Don’t hide behind the affiliate marketing label and tarnish the reputation of legitimate affiliates as well as other online marketers just because you are amoral.

    TechCrunch has yet another expose today which is revealing that yet another high flying company, this time Snackable Media, is make over $150 million a year by deceiving people and taking advantage of the difference between legal and ethical.

    http://www.techcrunch.com/2010/01/20/complaints-snackable-media-scamville-mobile-phones

    The damage to the web economy is real and affects all of us. The latest statics show online marketing is getting about 25% or all marketing dollars in the U.S., compared to over 50% in countries like the UK that have better consumer protection regulations. The gap, I suggest to you, is largely because brands are reluctant to go all in on the internet because of an accurate perception that it is not a safe place to do business. Companies legitimacy is enhanced when they advertise on TV but there is no halo to branding on an affiliate blighted wasteland.

    The solution to this problem is for marketers to realize that WE are also the victims of these scams. Stop turning a blind eye to reverse billing scams and cell phone monetization. Stop allowing them on our sites or in our conferences. Rally around those people , like Dennis, who are suffering the consequences of publicly outing scams and taking money out of scammers pockets.

    I side with those who evoke omerta when it comes to outing paid links and SEO secrets, but outing people who prey on users with deceptive ads and hidden charges is a different story.

    These scammers may be your drinking buddies, but they are not your friends.

  • Marty Weintraub

    In the last 24 hours, we’ve deleted a handful of comments which contained radical personal attacks, but had nothing to do with this post’s content. We invite anyone to participate in aimClear Blog’s conversations. That said, please speak to the issues and skip the ignorant attacks.

    To those immature few whose sad comments we deleted: I think you doth protest too much.

  • xbox live

    I used to do a lot of these on gpt sites. They actually pay pretty good and are easy to complete! Sure, they get 1/offer and i would only get like 40 cents, but it still worked. This would especially work great if you could get a cpa offer on there

  • dennis what

    Marty, you say you want to avoid attacks from people on Dennis and people calling the man names is not cool but maybe you should tell your readers who the man is so they can judge for themselves if the man is credible or not. Take for example the stories from shoemoney and others who say the man is a scam to this day.

  • Gioom

    Has anybody even seen these ads? I advertise on FB a lot and I always browse for competitor ads, but I have never com across such ads. I would really like to see a real life example of this. Pretty interesting.

    • Marty Weintraub

      @Gioom: There are screen captures in the posts, with big red circles.

  • Rob

    paying for clicks = spamming?