Limited Run describes itself as a "platform specifically designed for labels, musicians, and artists, selling digital and physical products." The company (known as Limited Pressing on Facebook) offers a framework for artists to build their own small scale music stores, take orders, and distribute product either digitally or in real life. Until earlier today we'd never heard of it, and you likely hadn't either.
That may be about to change. According to a post on Limited Run's Facebook page, the company noticed a huge discrepancy between the number of clicks it was recording on its pages and the number of clicks Facebook claimed to be recording. The narrative they provide is more detailed, but here's the bottom line:
Any time a page was loaded, we'd keep track of it. You know what we found? The 80% of clicks we were paying for were from bots. That's correct. Bots were loading pages and driving up our advertising costs. So we tried contacting Facebook about this. Unfortunately, they wouldn't reply. Do we know who the bots belong too? No. Are we accusing Facebook of using bots to drive up advertising revenue. No. Is it strange? Yes. But let's move on, because who the bots belong to isn't provable.
Limited Run goes on to detail how they've been asking Facebook to allow a name change for months, with no response. That finally changed--on one condition: "They said they would allow us to change our name. NICE! But only if we agreed to spend $2000 or more in advertising a month."
Here's the full post:
With all respect for Limited Run's experience, I disagree entirely. The FB advertising issue is enormous, possibly explosive, and it's what'll blow this story up. Facebook wanting a $2000 monthly commitment for advertising is the kind of shakedown the company can blame on one zealous employee. Clickjacked advertising will be harder to shake off, especially when you consider that the company has claimed its click-through rates are an order of magnitude higher than anyone else's.
Facebook has struggled to reassure investors that it's a solid bet. Its IPO may have been criminally mishandled, GM unexpectedly dropped its $10M/year deal with the company in the days before the launch, and its stock has tumbled further following an earnings call that beat expectations but didn't give analysts the comforting words they wanted to hear. The company's email snafu earlier this month did nothing
for its user satisfaction and the company's stock has tumbled nearly a third since its debut.
If Facebook doesn't turn itself around, the company's stock value could implode. Investor confidence isn't exactly getting a boost off America's economy or the troubles in Europe. Facebook wouldn't be the first reasonably solid company to be wrecked by a poorly timed IPO and unrealistic expectations, and we bet the newly minted executives and billionaires all know it.
Do we know
Facebook is click-jacking? Absolutely not. But it's hard to see who else would be doing it, and all too easy to imagine why the company would feel pressured into pushing its advertisers to pony up more dough. You can bet an awful lot of businesses who use Facebook ads will be scrutinizing their click-through rates in the next few days; if this blows up it's going to blow up big.