Meta makes billions from scam ads

Scam ads also hurt legitimate advertisers…

According to a November report, up to 10% of Meta’s revenue comes from scam ads. Losses from fraud and prohibited goods amount to $16 billion.

Now, Meta argues, it’s impossible to completely eliminate scam ads. Meta says they will ban advertisers if they are 95% sure they are committing fraud. Opening this up could mean banning unworthy advertisers. Otherwise, Meta will increase the cost of questionable ads they serve.

Is there any incentive for Yuan?

But you have to wonder if Meta has an incentive to allow these ads. It’s not just that 10% of their revenue comes from them. By allowing these ads, it reduces the inventory available to legitimate advertisers. This increases everyone’s costs and increases Meta’s revenue.

Of course, Meta also has an incentive to eliminate them. The prevalence of scam ads makes people less likely to take action against legitimate ads. As a result, the fraudulent conduct had a clear and direct impact on other advertisers. They can increase costs while making people less likely to take action on ads, thus reducing their profits.

So, of course, scam ads are clearly bad for users. But it can also be very bad for legitimate advertisers. It will be interesting to see if this report prompts Meta to take this issue more seriously.