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Comment by pherk | Hacker News Reader

All that is really no excuse for not developing a foolproof system. And if you know that you don't have a great system to catch fraud, then you should simply leave some money on the table.

See, the essence here is not to come up with a great algorithm. This is not a programming contest. But to create a system where everyone (publisher, advertiser, ad-network and customer) wins.

In this very early stage, the success of Facebook's Ad network should be measured only by one metric - ROI of Advertisers. And that number has to be consistently better than Google's.

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> And that number has to be consistently better than Google's.

Why's that? This isn't a zero sum game. You don't advertise only on Google or only on Facebook; as much as your budget allows, you advertise on every channel you can achieve a positive ROI on.

For any advertiser looking for a direct response, like a signup or purchase, I doubt anything Facebook can do would make the ROI better than advertising on search. No amount of demographic and interest targeting will make advertising to people as effective as advertising to intent. You can pay Google to send you people while they're in the process of looking for your product; Facebook doesn't do that.

Who is the "you" that your post above mentions?

The advertiser.

ROI to the advertiser is a key metric. Smart marketers compare the LTV or Life time value of customers that come from specific campaigns. ROI metric does not have to be better than Google for an ad campaign on Facebook or Microsoft Adcenter to be profitable. I have worked with clients to use web analytics and cohort analysis to optimize both quality (higher conversion, better LTV ) and quantity of leads. Sometimes Microsoft Adcenter traffic converts better but does have sufficient quantity compared to Google Adwords. Also different ad platforms have different levels or competition as well as different levels of fraud detection and click quality. I am surprised that Facebook does not detect and suspend obviously spammy user accounts whether that account is bot driven or outsourced to humans overseas.Google and Facebook have financial incentives to not filter out all low quality ad traffic because many advertisers don't have expertise or time to closely examine traffic sources as the company mentioned in this news story.

A combination of tech expertise and marketing savvy are needed to reduce this problem. More analytic tools are available for Google Adwords than are available for Facebook ads.

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