FTC Advises Opting Out of Targeted Ads to Avoid Scams

Cases of fraud and scams on social media nearly doubled in 2021 from 2020, according to a report by the Federal Trade Commission. More than 95,000 people reported about $770 million in losses to fraud schemes like ecommerce scams initiated on online platforms. “Data suggest that social media was far more profitable to scammers in 2021 than any other method of reaching people,” the agency said. The FTC suggests targeted advertising has played a role in the increase in scams, and has advised social media users to protect themselves by limiting who can see their posts and information while encouraging them to opt out of targeted advertising. That advice has understandably rankled the advertising industry. “I was very surprised to see that that was part of the FTC guidance,” said Ben Hovaness, svp of marketplace intelligence at Omnicom Media Group. Targeted advertising is at the heart of how these platforms work. Users can opt out of certain categories of ads on certain platforms—for example, Google allows people to opt out of ads for alcohol. “But there's no way to comprehensively opt out of receiving targeted advertising,” Hovaness told Adweek. Embracing the Digital Demands of Hyperlocal Marketing “Digital advertising is made out to be a fantastic scapegoat for issues that neither originated with it, nor will go away if it goes away too,” said Ana Milicevic, principal and co-founder of strategic consultancy Sparrow Advisers. In nearly 70% of these reports, people said they placed an order for goods online, usually after seeing an ad, but never received their order, according to the FTC. Some reports have indicated that the ads viewed by users imitated real online retailers that redirected these users to lookalike websites. Nearly nine out of 10 users named Meta’s Facebook or Instagram as the prime platforms where they were targeted with shopping scams. Brands can feel as if they're in the crosshairs over whether they can help prevent fraudulent activities from lookalike sites. For the most part, these fraudulent online shops are set up without a brand's consent. This means brands should devote some resources to try to track down these pages, according to Hovaness. But when it comes to targeted ads placed on these platforms, brands have limited say and solely cannot shoulder the responsibility for fraudulent acts. “It’s a self-regulation challenge for platforms, like Facebook, and making sure that they're taking aggressive enforcement action when a fraudulent activity is discovered,” he said. Outside of lookalike sites, brands have quite a bit of control when it comes to fraud prevention, said Milicevic. Brands' consciousness about media buying and appearing only in trusted places is critical, as well as “auditing their entire advertising supply chain and cutting out any of the publisher partners that no longer makes sense for them,” she added. Similarly, advertisers need to know the difference between good and bad buying partners, said Shailley Singh, svp of product management and global programs at IAB Tech Lab. To address this problem, the nonprofit has deployed several tools while emphasizing that businesses should not put the burden on consumers to eradicate such fraud. It’s Time to Fraud-Proof Your Brand by Looking Beyond the Usual Hiding Spots

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FTC Calls Out Targeted Ads for Social Media Scams

Nearly $770 million was reported lost in 2021 to frauds initiated on social platforms

Trishla Ostwal

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Trishla Ostwal