Facebook advertisers scam users into forking over cash

I’ve written a bit lately about how cyberthieves using social media to scam people. It turns out the most egregious scammers are many “legitimate” companies that run deceptive ads on these networks.

TechCrunch has a fascinating series on how advertisers are using social games to trick Facebook and MySpace users into forking over personal information or signing up for recurring subscriptions they don’t want.

Five formidable Facebook frauds and how to protect yourself

Seven social network security mistakes you can’t afford to make

Facebook hazards – and how you can avoid them

It starts with stupid-yet-addictive quizzes and games like FarmVille, Mafia Family Wars, and Mobsters. The games themselves are free, but if you want to advance faster than your friends, you’ll probably have to buy virtual objects using real money, according to BusinessWeek.

Zynga doesn’t charge users to play FarmVille, but it does sell digital crops, cattle, and farmland. Corn seed, for instance, goes for the equivalent of 10 cents; cows run 20 cents each. All those digital goods add up. Zynga pulls in its nine-figure annual revenues from FarmVille and 20 other games….One recent success: digital sweet potato seeds that cost $5 a packet. The seeds, which of course cost nothing to duplicate, pulled in more than $400,000 in three days.

Don’t have $5 to spend on a bag of imaginary seeds? You can get $450 in Farm Cash by clicking an ad and signing up to receive a “free learning CD” from Video Professor. Of course, the “free” offer comes with caveats. If you don’t cancel in time, you’ll pony up $190 for an entire learning series, says TechCrunch’s Michael Arrington

A typical scam: users are offered in game currency in exchange for filling out an IQ survey. Four simple questions are asked. The answers are irrelevant. When the user gets to the last question they are told their results will be text messaged to them. They are asked to enter in their mobile phone number, and are texted a pin code to enter on the quiz. Once they’ve done that, they’ve just subscribed to a $9.99/month subscription.

The other, slightly more benign scam is “lead generation,” in which you surrender your name, e-mail address, cell number, and so on in exchange for virtual cash, discount coupons, or something else of minimal value. Your name is then sold and resold ad infinitum to marketers, who’ll deluge you with spam, junk mail, telemarketing calls, even junk texts to your cell phone. (When e-mail marketers claim they use only “opt-in” lists for their spam victims, this is usually the kind of list they’re talking about.) Again according to TC, roughly a third of some social game publishers’ revenue comes from lead gen.

Then there are the regular old deceptive ads, such as “[name of your friend here] has a crush on you,” that use information from your social profile to trick you into clicking. How do they get your friend’s name? Most likely because you installed a Facebook app that shared this info with advertisers.

(I’m sure most residents of Cringeville know this already, but just in case: So-and-so does not have a crush on you. Hot Russian girls are not dying to meet you. Those free CDs aren’t actually free. You could eat nothing but acai berries for a month and lose weight, but you’d probably get the same results a lot cheaper by eating nothing but sawdust. Or you could simply suck in your stomach the way the people in those ads are doing.)

Webmasters desperate for revenue have a term for these kinds of ads. They call them cash cows, because they’re so much more lucrative relative to legit pay-per-click ads. Only in this case, you’re the meat on the stick.

Arrington quotes James Hong, co-founder of Hot or Not, who admits to briefly running spammish/scammish ads on his site until it made him feel sleazy all under:

…the offers that monetize the best are the ones that scam/trick users. Sure we had Netflix ads show up, and clearly those do convert to some degree, but i’m pretty sure most of the money ended up getting our users hooked into auto-recurring SMS subscriptions for horoscopes and stuff. When I hear people defending their directory of deals by saying Netflix is in there, I am reminded of how hotel pay-per-view has non-pornographic movies. Sure it gives them good cover, but we all know where the money is made.

Dennis Yu, CEO of social media ad company BlitzLocal, says it’s easy to trick people on Facebook into downloading an adware-driven toolbar, giving up their e-mail address, or surrendering their phone numbers.

Method #3, getting their phone number, has been the most lucrative thing on Facebook, even more than the fake weight loss offers, for the last 2 years. As an ad network, we were at the mercy of what the game developers want — more money. Here’swhat ad networks struggle with- – to either run what ads make the most money or else be forced out by other ad networks willing to be shadier than them….Publishers (game developers) chose whoever makes them the most money.

Yu also says this period of social media scammishness will be short-lived. As advertising on social networks gets more expensive, low-rent advertisers will be forced out by cash-rich companies that (hopefully at least) will take the higher road to connect with potential customers. We’ll see about that.

As for Facebook, MySpace, and the others? They create rules and talk about “advertising ethics,” per TechCrunch, but at the end of the day money talks and good intentions walk.

(FYI, the SEO Blackhat site points out that TechCrunch itself has been known to run some less-than-entirely-legit ads. I haven’t seen any of them myself on the site, but I can’t say I’d be surprised to find

them.)

You could, of course, opt to simply not use social media. But that’s like opting to not use a cell phone. Ten years ago you could have gotten away with that; today you’d seem a little weird.

Even if you never sign up for Facebook or the hundreds of other networks just like it, social media is ultimately unavoidable because it’s going to be baked into everything you do on the Net. The key is to use it intelligently.

Do you really need to play stupid games or take yet another bogus IQ quiz? Surely there are better ways of wasting your time. Like reading more Cringely blog posts or taking more InfoWorld quizzes, for example. It won’t do a thing for your FarmVille status, but it will make you smarter, thinner, and more appealing to those hot Russian gals. Trust me.