Limited Run, a New York-based startup company that creates websites and online stores for its clients — record labels and artists, mainly — is doing something odd for a company these days: It’s leaving Facebook behind.
On Monday, the company posted a strikingly candid note on Facebook informing its followers that it would soon be deactivating its Facebook page due to two problems it encountered on the website: It discovered that a vast majority of the advertisements it was running on Facebook were being clicked on by bots — or automated computer programs, not real users. This is an issue because Facebook charges a company higher prices for advertising space based on the number of clicks a company’s ads receive.
Separately, when Limited Run tried to change the name of the company on its Facebook Page, Limited Run says that Facebook asked for $2,000 in advertising buys in exchange.
As Limited Run wrote in its Facebook note:
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…
While we were testing Facebook ads, we were also trying to get Facebook to let us change our name, because we’re not Limited Pressing anymore. We contacted them on many occasions about this. Finally, we got a call from someone at Facebook. 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. That’s correct. Facebook was holding our name hostage. So we did what any good hardcore kids would do. We cursed that piece of shit out! Damn we were so pissed. We still are. This is why we need to delete this page and move away from Facebook. They’re scumbags and we just don’t have the patience for scumbags.
The post might have gone largely unnoticed, if not for a few things, the main one being that Facebook, which went public in May and has seen its shares mostly plummet since then, now finds itself in a more dire position of attempting to prove it is a viable business. To do that, it must convince investors and advertising customers alike that its nontraditional and difficult-to-measure advertising products are connecting with consumers. Facebook’s revenue is derived almost entirely from advertising (84 percent of total revenue, according Facebook’s second quarter earnings report).
Also, as of Monday afternoon, a few hours after Limited Run posted its tale of Facebook woe on the website, the post went viral on Y Combinator’s Hacker News, a popular tech news aggregator, and then spread around tech blogs, drawing even more scrutiny to the issue.
“This is not where we expected our little post on Facebook to go,” said Tom Mango, Limited Run’s co-founder, in a phone interview with TPM.
Still, Mango said that even after the post went viral, nobody from Facebook reached out to the company to discuss the issues with them.
“We couldn’t get them to acknowledge or care or help us,” Mango said.
By late Monday night, that had changed, according to Facebook. A Facebook spokesperson provided the following statement to TPM:
“We’re currently investigating their claims. For their issue with the Page name change, there seems to be some sort of miscommunication. We do not charge Pages to have their names changed. Our team is reaching out about this now.”
Limited Run, formerly known as Limited Pressing, first decided to change its name in February 2012 and to begin experimenting with Facebook ads under its old name several months later in April, Mango said.
However, Facebook’s own terms of service make it clear that once a Facebook page for a business like Limited Run reaches 200 “Likes,” — that is, 200 people click the “Like” button for that page — the page name is locked.
As for the mysterious case of the advertising bots, nobody — not Limited Run, nor Facebook — is quite sure what to make of that.
“We have no idea who is doing this,” Mango told TPM. “It could be anything from indexing bots crawling websites — that is, bots going through ads to find websites — to automated hacking attempts. We don’t think it’s Facebook. I’m sure they are doing everything they can to stop this kind of thing. Our biggest concern is that they just don’t seem to care enough to follow-up or look into this.”
The way Facebook ads work is through a bidding process. As Facebook’s For Businesses page explains: “The amount suggested [cost] is based on how many other people are competing to show ads to the same audience as you.” Facebook’s Ad Manager, an analytics tool for businesses, then breaks this cost down in terms of “cost per click,” so the number of clicks an ad receives is critically important, as it drives up the cost of the ads for all businesses competing for them.
“Every click from a bot thats not detected and prevented kind of drives prices up and makes it less worth it,” to advertise on Facebook, Mango said.
But Mango and Limited Run also acknowledge that Facebook is catering to a huge pool of businesses, many of which are global brand names with much larger advertising budgets than little Limited Run, and that Facebook probably logically prioritizes those customers’ concerns over the smaller shops.
“I understand they have limited resources,” said Mango regarding Facebook’s Businesses team, “There are way bigger customers. They have their priorities, they can’t treat all advertising companies the same.”
By the same token, Limited Run feels like it doesn’t need Facebook any more, either.
“We’re advertising with Google now,” Mango told TPM. “Those are kind of working out. We’re okay with deleting our Facebook page.”