November 02, 2009, 9:26 PM — I've written a bit lately about how cyberthieves using social media to scam people. It turns out the most egregious scammers are many "legitimate" companies that run deceptive ads on these networks.
TechCrunch has a fascinating series on how advertisers are using social games to trick Facebook and MySpace users into forking over personal information or signing up for recurring subscriptions they don't want.
[ InfoWorld's Robert X. Cringely sets his sights on one of the oldest and most persistent online scams in "Why can't we do anything about spam?" | Tune in to the InfoWorld Security Central channel for the latest IT security news and reviews. ]
It starts with stupid-yet-addictive quizzes and games like FarmVille, Mafia Family Wars, and Mobsters. The games themselves are free, but if you want to advance faster than your friends, you'll probably have to buy virtual objects using real money. Per BusinessWeek:
Zynga doesn't charge users to play FarmVille, but it does sell digital crops, cattle, and farmland. Corn seed, for instance, goes for the equivalent of 10 cents; cows run 20 cents each. All those digital goods add up. Zynga pulls in its nine-figure annual revenues from FarmVille and 20 other games....One recent success: digital sweet potato seeds that cost $5 a packet. The seeds, which of course cost nothing to duplicate, pulled in more than $400,000 in three days.
Don't have $5 to spend on a bag of imaginary seeds? You can get $450 in Farm Cash by clicking an ad and signing up to receive a "free learning CD" from Video Professor. Of course, the "free" offer comes with caveats; if you don't cancel in time, you'll pony up $190 for an entire learning series.
Per TechCrunch's Michael Arrington:
A typical scam: users are offered in game currency in exchange for filling out an IQ survey. Four simple questions are asked. The answers are irrelevant. When the user gets to the last question they are told their results will be text messaged to them. They are asked to enter in their mobile phone number, and are texted a pin code to enter on the quiz. Once they've done that, they've just subscribed to a $9.99/month subscription.
The other, slightly more benign scam is "lead generation," in which you surrender your name, e-mail address, cell number, and so on in exchange for virtual cash, discount coupons, or something else of minimal value. Your name is then sold and resold ad infinitum to marketers, who'll deluge you with spam, junk mail, telemarketing calls, even junk texts to your cell phone. (When e-mail marketers claim they use only "opt-in" lists for their spam victims, this is usually the kind of list they're talking about.) Again according to TC, roughly a third of some social game publishers' revenue comes from lead gen.
Then there are the regular old deceptive ads, such as "[name of your friend here] has a crush on you," that use information from your social profile to trick you into clicking. How do they get your friend's name? Most likely because you installed a Facebook app that shared this info with advertisers.
(I'm sure most residents of Cringeville know this already, but just in case: So-and-so does not have a crush on you. Hot Russian girls are not dying to meet you. Those free CDs aren't actually free. You could eat nothing but acai berries for a month and lose weight, but you'd probably get the same results a lot cheaper by eating nothing but sawdust. Or you could simply suck in your stomach the way the people in those ads are doing.)
Webmasters desperate for revenue have a term for these kinds of ads. They call them cash cows, because they're so much more lucrative relative to legit pay-per-click ads. Only in this case, you're the meat on the stick.
Arrington quotes James Hong, co-founder of Hot or Not, who admits to briefly running spammish/scammish ads on his site until it made him feel sleazy all under:
