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Facebook gets most of its revenue from advertising - more than $13 billion between April and June of this year. It sells itself as a simple and effective way to reach a target audience. That targeting has gotten Facebook into hot water with users over privacy concerns. And for businesses, the larger looming question is, is it worth it? NPR's Jasmine Garsd reports.
JASMINE GARSD, BYLINE: Some version of this might have happened to you. You hit like on a healthy eating Facebook page, and soon enough you start getting advertisements for fitness groups and weight loss products which you're not interested in. A new class-action lawsuit claims that Facebook isn't delivering on its advertising promises. Here's Seth Lesser, the lawyer who is suing Facebook.
SETH LESSER: Facebook's advertising pitch is that you can put into the program exactly your target audience.
GARSD: Where people live, how much money they earn. Do they have a college education?
LESSER: And Facebook says, we can get you those such people at 89 percent accuracy.
GARSD: Facebook says it can't guarantee every ad will be this effective. Lesser says it's misleading. His client is investorvillage.com, a site that offers online discussion forums on investing. It recently spent around $1,600 on two Facebook ad campaigns. They were targeted at people with an income of at least $250,000 and a college education, people who would be interested in the stock market. Their ads got a lot of likes, but...
LESSER: These people were not those it had asked to be targeted.
GARSD: Investor Village says at least 40 percent of them were from outside the target audience, people who just hit like on anything. The advertising industry has obsessed over reaching its target audience for decades. In the 1960s-based show "Mad Men," ad exec Don Draper racks his brains about how to sell cereal.
(SOUNDBITE OF TV SHOW, "MAD MEN")
JON HAMM: (As Don Draper) Kids see the giant bowl of cereal, and they smile because, you know, they'd eat a box of it if they could. And moms see it, and they get this twinge of how little their kid still is even though they have to deal with life. Get those two together in a market, and I think we're going to sell some cereal.
GARSD: OK, but he couldn't be sure how many people would see a billboard or read a magazine ad. And then Facebook happened, over 2 billion people offering information about what they love and what they hate, where they've been and where they'd like to go. It's Don Draper's wildest dream come true. But it turns out that even with all this information, Don Draper's job is not that much easier.
SALEEM ALHABASH: So there's a depth of data that is immeasurable now that is not matched with the types of insights that we know about consumers to make advertising more effective.
GARSD: Saleem Alhabash is an associate professor at Michigan State University's department of advertising. He says advertisers today have so much detailed information. It can actually make targeting the right audience difficult. Marcus Collins is an executive at Doner, an advertising agency.
MARCUS COLLINS: We put an undue pressure on these technology platforms that we don't put on traditional media. And it's not fair.
GARSD: He says Facebook is just a tool. Millions of advertisers are drawn to it. But sometimes, like in the case of Investor Village, it may not work.
COLLINS: Facebook isn't the magic potion to make presto change-o (ph), you reach everybody, and everyone will start buying your products.
GARSD: No matter how much data we have, Collins says convincing people to buy what you're selling is always going to be more than just a numbers game. Jasmine Garsd, NPR News, New York. Transcript provided by NPR, Copyright NPR.