Scammers aren’t the only ones profiting from weird Facebook ads of Howie Mandel getting arrested.
Driving the news: Late last year, Meta internally projected it would earn 10.1% of its annual revenue from ads for scams and banned goods, per documents obtained by Reuters. The projections estimate that the social media giant served users ~15 billion clearly fraudulent ads per day.
- In a statement to Reuters, Meta said the revenue estimate was “overly-inclusive” and it’s since determined the true number is lower, though it declined to provide said number.
Zoom in: Meta’s internal warning systems reportedly flag potential scams, but the company only takes the ads down if it’s 95% certain that fraud is being committed. If the ads fail to reach that threshold, but Meta still feels they’re a little scammy, it just charges higher ad rates.
- The penalty is meant to deter scammers from running ads, but if you look at it ungenerously, it seems like Meta is trying to milk more cash out of the scam.
- And this cash flow is clearly important. In another doc, Reuters reportedly found that Meta wouldn’t spend more than 0.15% of its total revenue to stop fake ads.
Why it matters: Meta isn’t completely turning a blind eye — it does take action. Still, the report raises the question: Without more regulatory oversight, is Big Social Media really incentivized to fight this growing problem if it brings in this much cash?—QH