0:07 Have you ever seen an online ad that
0:09 felt too good to be true? Clothes from a
0:11 famous big brand at half the price, a
0:13 celebrity promoting a new investment
0:15 scheme, or a website promising to double
0:18 your money overnight.
0:20 It looks tempting, slick, convincing,
0:22 sometimes even trustworthy. I hope you
0:24 know by now that most of these are scam ads.
0:27 ads.
0:29 But what if I told you that these scam
0:32 ads are not some random mistakes? What
0:34 if they're part of a much bigger
0:37 business? One that's making tech
0:39 companies billions of dollars in
0:41 revenue. Well, that's exactly what an
0:44 investigation has revealed. Meta, the
0:45 company behind Facebook, Instagram, and
0:48 WhatsApp, has been making huge profits
0:50 from fraudulent ads.
0:53 How much money are we talking about? 10%
0:55 of Meta's revenue in 2024. That's about
0:59 $16 billion. That's the kind of money
1:01 we're talking about here.
1:03 This is according to the company's own
1:06 projection that 10% of its revenue last
1:11 year would come from fraudulent ads.
1:13 These are ads for scams and banned
1:15 goods, stuff like fake online shops,
1:17 illegal casinos, and even unapproved
1:19 medical products. Some of them use the
1:21 faces of celebrities. Some use real
1:24 brand names. And these posts are getting
1:27 wide reach. Again, this is from Meta's
1:30 own data. It said that users were seeing
1:34 15 billion high-risk scam ads every
1:38 single day. 15 billion every day. How
1:40 does something like that even happen?
1:43 Let me break it down for you. Meta uses
1:46 automated systems to flag scammers, but
1:49 it only bans them when it is 95% sure
1:51 that they're committing fraud. If the
1:54 system is less sure of fraud, Meta lets
1:57 them run the ad, but it charges the
1:59 advertisers more
2:03 for what could potentially be a scam.
2:05 This policy is called a penalty bid.
2:06 It's supposed to discourage the
2:10 scammers, but that's a sorry excuse. The
2:12 fact is Meta is turning a blind eye to
2:16 scams to make more money off them, and
2:18 it has become their business model. The
2:20 investigation also reveals that Meta
2:23 safety had revenue limits, meaning they
2:27 put company revenue over user safety.
2:29 I'll tell you how Meta would take down
2:32 fraudulent ads, but only up to a point.
2:34 It could cost the company not more than
2:37 0.15% of its total revenue. That's about
2:41 $135 million. So any revenue loss beyond
2:43 this figure was not allowed even if it
2:47 meant running scams.
2:49 Even when fraud was found, there was a
2:52 cap on how much Meta could lose while
2:54 fixing it.
2:57 The impact of this was real and serious.
2:59 A Facebook account in Canada was hacked,
3:01 for example. Scammers used it to promote
3:03 a fake cryptocurrency offer. Friends of
3:05 the account owner lost thousands of
3:08 dollars. It took weeks for Meta to take
3:10 that account down.
3:13 Besides, Meta's own research showed that
3:15 its platforms were involved in about a
3:17 third of all successful scams in the
3:20 United States. Meta platforms,
3:23 these are all glaring lapses.
3:25 Do you know what Meta's response to this
3:27 investigation is?
3:29 >> They've dismissed it. The company says
3:32 10 the 10% figure is rough and overly
3:34 inclusive. It claims that many of those
3:36 ads were legitimate. Meta also says it
3:39 has reduced user reports of scam ads by 58%.
3:41 58%.
3:43 Needless to say, it's far from enough.
3:45 Also, this is not just a Meta problem.
3:47 It's an industrywide crisis. The world
3:50 is losing billions to ad fraud. One
3:52 estimate says global losses will nearly
3:55 double in the next few years from 88
3:59 billion in 2023 to $172 billion in 2028.
4:02 That's a growth rate of about 14% every
4:05 year. And it's not just about money. Ad
4:07 fraud undermines the entire digital
4:11 economy. On average, one in four ad
4:13 clicks are fraudulent.
4:15 And that has consequences.
4:17 You see, when every fourth click is
4:19 fake, marketers think that their
4:21 campaigns are working when they are in
4:23 fact not working.
4:26 Advertising money is wasted. Brands lose
4:28 trust and users get flooded with more
4:30 misleading content.
4:32 What's making this worse is technology
4:35 itself. Generative AI can produce very
4:38 convincing fake ad content. Deep fake
4:41 like endorsements are now a real risk.
4:44 AI bots also simulate human behavior at
4:47 scale that hits campaigns and budgets directly.
4:49 directly.
4:51 And our regulators are starting to
4:53 respond. The European Union's Digital
4:55 Services Act demands ad transparency.
4:57 Other countries are drawing up similar
4:58 rules. Meanwhile, tech companies say
5:01 that they are addressing it. Google says
5:05 it has removed 1 it has removed in fact
5:08 5.1 billion ads last year. It blocked
5:13 415 million scam related ads.
5:14 But as you can see in the case of
5:17 Facebook, it doesn't suit tech giants to
5:18 fix this.
5:21 They will need regulatory pressure and push,
5:23 push,
5:24 but regulators are always playing
5:26 catch-up. In the meantime, what can you,
5:29 the consumer, do?
5:32 Verify before you buy, be skeptical, and
5:34 report suspicious ads. Because in the
5:37 digital world, every click has a price.
5:39 And your best defense is staying informed.
5:41 informed.
5:42 >> Want the facts,
5:43 >> the latest developments,
5:46 >> news that gets straight to the point?
5:48 Well, we've got all three just for you.
5:50 This is First Post Live, a brand new
5:52 show. Your window into what really matters.
5:53 matters.
