Dangers of Social Media Advertising

Many social networking applications are switching over from banner advertisements to virtual goods, rewarding users with points or some form of game credit for completing advertisers’ offer campaigns.  The Facebook application called “Farmville” is a popular example of social media applications utilizing the virtual goods model by giving “coins” to users based on their participation in various activities, including advertising offers.

More and more social media advertising traffic is becoming incentivized like this.  Though this type of traffic tends to have a very high conversion rate, incentivized traffic also leaves some dangerous room for fraudulent conversions.

For this reason, HasOffers has been working diligently with their top clients to shut down fraud connected to incentivized traffic. For one of our online gaming clients, HasOffers consistently finds an average of 16% of sales to be fraudulent as a result of social media advertising. These fraudulent transactions are caused by users trying to complete their offer multiple times to gain more virtual rewards, thus creating duplicate conversions. Another online dating client reported that 11% of their conversions were found to be duplicates, saving them a fortune in fraudulent conversions.

The HasOffers proprietary tracking technology consistently prevents these advertisers from paying for duplicate conversions and sales, allowing them to continue to utilize social media advertising without the fear of fraud impacting their bottom line. Each user that commits an action recorded on HasOffers is assigned a unique identification number within the system. This identification number is then verified against each conversion, insuring that users don’t create multiple sales by clicking on the same advertisement again. Standard cookie-based tracking always records multiple sales by the same user, but HasOffers tracking technology provides the option to only record one unique sale per user (based on IP and User Agent), which is extremely valuable for virtual goods advertising.

This tracking technology is available to all HasOffers clients. Clients select from four different duplicate prevention methods based on their particular business model as well as their average frequency of conversions. Smart technology that tailors to the nature of offer campaigns like this will soon be the industry standard of performance tracking, constantly solving the difficulties that new and creative advertising campaigns may create.

Peter Hamilton

Peter is CEO and Partner at TUNE. Developing his early skills as an online marketer in SEO, PPC, and Media Buying, he met the twin co-founders of TUNE in 2009 and had the opportunity to join prior to day one, leading product marketing for the company's first launch. He continues to contribute to media, white papers, analysts, and industry blogs with the goals of educating mobile marketers and making the digital marketing ecosystem more connected. Follow @peterhamilton

  • http://dennis-yu.com/ Dennis Yu

    Peter,
    Informative article—the 16% figure for fraudulent leads, how do you measure folks who filled out an offer just to get points and are therefore, terrible quality? I’d imagine the industry needs a more sophisticated lead scoring system for social traffic with objective factors that everyone can understand.

  • http://www.adworkz.com/ Evan

    The adoption of incentivized-type advertising by these social network application developers is definitely an increasing trend. On one hand, these developers are able to generate more income because of the higher conversion rate, but it is at the expense of the advertisers, who end up paying for conversions that typically don’t carry a favorable ROI.

    It is nice to see that this issue is being addressed at the platform level. Nice work.

    • http://www.hasoffers.com Peter Hamilton

      Thanks Dennis! yeah, incentivized traffic is a tricky thing. Hopefully users are given enough choices that they are actually choosing offers they are interested in.

  • http://www.linkfishmedia.com/ Julie Joyce

    I can definitely see how incentivizing social media users can negatively impact conversion tracking, and it’s good that there’s something available that will prevent this. However, how fail-safe is it?

  • Lynn Jebia

    This is excellent information as incentivized traffic is being used more and more and the fact that one firm found 16% of sales were resulting from fraud makes it all the more important for advertisers to ensure they are protected.

  • http://www.bill4time.com/ Bill4Time

    Great job, guys. Perhaps this could be used to detect fraudulent conversions from affiliates’ ads, too!

  • http://nickthrolson.com/ Nick Throlson

    Very Useful information you guys have put together and great example by using farm-ville. I think lots of advertisements have fraud such as email banner but apps that are on Facebook. I can see where you guys are seeing the fraud come in. HasOffers is on top of thing keep up the good work guys!

  • C.Ryan

    Great info. HasOffers seems to be a company that not only recognizes industry trends, but also the negative undercurrent that must also be recognized and managed.

  • Ian Fernando

    social stuff is always something to look into. glad to see a blog up man!

  • http://bit.ly/writerich Crucial

    Not all incentivized are scrupulous. I’ve joined a site that pays simply for your actions, which does not trap you into submitting a credit card number of engaging in product or service solicitations.

  • http://squarepegweb-design.info/ Square Peg Web

    Hmm Most of social media network sites are helps to promote in business.In facebook and some sites are used to create business profile.So we should concentrate in secure passwords.

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  • http://www.replicon.com/time-bill Time Billing Software

    Obviously, these duplicate conversions and people who are fooling around with duplicate and waste clicks on ads and so many stuffs are spoiling the complete internet marketing strategies. So companies like hasoffers must come up with a lot of offers like these to avoid all these fraudulent actions.