Wonk Alert

If you use or are considering the use of Facebook as n advertising platform, here is some information on their pay-per-click model, and a little-known problem that internet and software product executive and CEO of Wahanegi, Erik Larson has shared.

Eric also posts about how to detect and mitigate the problem. The subject matter is rather technical, but can alert you to some of the issues you should consider in planning online marketing campaigns.

Meet The “Booklicant”

Booklicant is a phrase Erik has coined to describe certain FB users who consistently and indiscriminately click on dozens of ads in rapid fire fashion for various reasons that are generally unrelated to typical click-based online advertiser expectations:

  • To collect images of things they like.
  • To increase their ‘like’ score.
  • To express their interests.
  • To help Facebook better target content to them.
  • To while away the time.

Although they may be a small percentage of all Facebook users, they represent a large percentage of Facebook ad clicks, especially in smaller ad campaigns.

All Clicks Aren’t Created Equal

The problem, as Erik explained it in his letter to Facebook is the inherent value of many of the clicks, which are not comparable in value to clicks in other CPC (Cost Per Click) venues or to clicks by FB users with typical and expected interactions with CPC advertising:

To be specific, I believe that about 90% [of the] clicks you charged us for were worth about 1/1000th of the price you charged us…Even more, that threshold appears to be WAY above what any reasonable advertiser would expect it to be.

…I am not saying that such likes have zero value. I am estimating that the market rate for such clicks is probably about 1/1000th the current value you are charging, since these people seem to click on about 1000 times as many ads as typical users…

You have two completely different classes of ad inventory on your network, people who collect likes and people who don’t, and you are charging us the same for each even though it is clear the behaviors represent categorically different levels of intent and engagement with the ads.

I will happily pay 40 cents for a click from a UK resident who only clicks on things that they are curious about on their own merits…But I will only pay 0.04 cents for a user who regularly likes 20 to 40 or maybe more than 100 things in a day.

…From an advertiser’s perspective they (Booklicants) are as much a creation of your product interface as they are regular people with rational interests.

How CPC Ad Pricing Works

The current context for CPC ad pricing includes these two measures:

  • Search: high value clicks where the user intent/goal is fairly clear;
  • Display: lower value clicks where the user intent/goal is less clear but still represents intent to interact with the ad and advertiser.

In neither instance would advertisers expect that there are people clicking on ads to somehow ‘collect’ them in a sort of general interest inventory.  A quick survey of some of the CPC experts by Erik concluded that if these “booklicant” profiles turned out to be bots, Facebook would refund his money.

The “booklicant” problem is significant because Facebook implies that advertising on the site is a form of ‘CPC’ advertising by using that industry standard term, as well as industry standard terms like ‘CTR’ and ‘invalid clicks.’ However, the bottom line result could be a high number of clicks with little or no expected engagement or conversions:

Then I did a little bit to try to get engagement from those users, a few posts to the page, and nothing happened. I read more about how building engagement is a skill that requires investment, and I also began to look into sponsored stories. Luckily, in parallel I was analyzing my fan base and discovered they were not what they appeared to be at first. They were mostly “booklicants” who “like” dozens of things a day.

How Facebook Could Help

Invalidate Rapid Cicks from A Single User: Eric guesses that Facebook perhaps allows valid clicks fewer than 4-6 rapid-fire clicks in a minute, and after that point invalidates their clicks within a very short session period, perhaps around an hour or two – but that they do not subsequently invalidate those first ~4-6 clicks.

Tighten the Daily Click Threshold: Facebook may also have a high threshold for clicks in a day – perhaps 40-60 daily, but similarly fails to then invalidate the first ~40-60 clicks.

Develop an Ethical Algorithm: Erik questions whether Facebook has an algorithm to meaure how many annual or total likes a user has. Combining a long-term algorithm with a rapid-fire algorithm and a daily algorithm would identify ‘booklicants.’   Of course, Facebook could create some sort of justification for its charges to advertisers, like the following:

Setting the limit at [x] clicks per minute is reasonable because it takes the average person about 10-15 seconds to read an ad made of one small picture and fewer than 115 characters, thus the user could reasonably have read the ad and made a decision to click.

However, Erik notes that such a justification, in the absence of an ethical algorithm, has little validity. An ethical algorithm would be:

Retroactively invalidate all clicks by users as soon as they click more than twice in a minute, more than five times in an hour, or more than 500 times in a year. By retroactive, I mean both all the clicks within that particular timeframe, and also looking back at their behavior over the past five years to determine other times that behavior occurred.

That algorithm is ethical because the booklicant interactions clearly do not represent a meaningful CPC advertising interaction by any reasonable standard.

The Solution?

Eric shares a solution to detect and mitigate the problem – a method to reduce the effects of booklicants on your Facebook marketing campaigns that he has been testing. In his words:

  1. Target your campaigns by demographic and interest as specifically as you can, even if you don’t really know which demographics will be most interested: …For instance, to save time and money I wanted to run generic campaigns for several different product concepts across very broad demographics for 3-4 days, and then use Facebook’s demographics report to see which specific segments were most interested in which concepts, after which we would have built very specific campaigns for each concept…and run a final bake-off to see which was the most successful. Unfortunately, that doesn’t work. Besides Facebook’s slow demographics reporting which takes 2-3 days to update, this doesn’t work because when you go broad for a short time with somewhat bland ads on Facebook, you get a lot of clicks from booklicants all across the spectrum…That means your initial click rates and CPCs look better than you expect, you pat yourself on the back and feel excited about spending more money to get more clicks, but your data is garbage.
  2. If you want to get the most data from your tests then advertise your Facebook page: …That means your CPC rates will be lower. But more importantly, your reporting will be much richer, since Facebook provides you with some nice reports on the people who liked your page. The main two downsides are that you won’t be able to do Unbounce-style landing page tests, and you won’t be able contact your new fans 1-on-1 as easily as you can by collecting email addresses.
  3. If you want the cleanest list of customers, then advertise an external landing page and collect email addresses there: From what I can tell from six thousand or so clicks across fifteen campaigns, booklicants don’t leave email addresses…Your conversion rates from click to email address will be…so low that it will be difficult to use the rates to compare different concepts or positioning statements with any statistical confidence. The rates are depressed by both the behavior of the booklicants and the natural problems involved with getting people to enter email addresses into semi-professional landing pages. Said another way, those email addresses will be very expensive, probably not worth it in my opinion. If all you want is feedback from potential customers, you are probably better off just accosting your friends and acquaintances like I do rather than trying to attract potential customers on Facebook so you can talk to them. Or maybe do the old stand-by and advertise in Craig’s List, “We’re building an X product and need to talk to Y-type potential customers for $Z and a great cup of coffee for N hour(s) of your time.”
  4. Ignore the first 3-4 days of your campaign results: This is particularly frustrating if you are trying to iterate/fail/learn quickly as part of a lean startup mentality, especially since the data is going to look surprisingly good…From what I can tell, the booklicants click as soon as they see your ad, after which Facebook will no longer show them the ads from that campaign…So if you have a very targeted demographic and you bleed out the booklicants at first, then afterwards you will get data that is more representative of your intended target segment…at least until Facebook starts putting your ad into a broader rotation. Regardless, the last thing you want to do is make important business decisions based on those first few days, including the decision to spend more money on Facebook ads.
  5. OPTIONAL: When you are done, remove the first 3-4 days worth of fans from your Facebook Page: …As you start to get more people liking your page, and your ads start getting the “your friend so-and-so also likes this” blurbs next to them, your click-thrus will go up and your costs will go down…Any Admins of your Facebook Page will be able to review the public profiles of the people who like you to double-check them individually to see how prolific and random they are in their liking behavior…You can ’remove’ a user which means they can come back (not good if you care about them polluting future tests) or ‘ban’ them which means they…can’t come back.