Meta Platforms Projected to Earn Billions from Scam Ads in 2024, Internal Report Reveals

According to a Reuters report based on internal Meta Platforms documents spanning from 2021 to 2025, the social media giant projects that roughly 10% of its total advertising revenue in 2024, amounting to about $16 billion, will stem from advertisements associated with scams and prohibited items. The internal data reveals that users are exposed to approximately 15 billion 'higher risk' scam advertisements daily. These ads promote various illicit activities, including fraudulent e-commerce schemes, illegal online casinos, and banned medical products. The company identified that these higher-risk ads alone generate an estimated $7 billion in annualised revenue.

Meta Platforms asserts it is aggressively fighting fraud, but internal documents suggest otherwise. One document from early 2025 indicates that enforcement teams might not block advertisers if the fraudulent ads reduce overall company sales by less than 0.15%. This policy could allow advertisers to run numerous fraudulent campaigns without immediate suspension. The report also highlights issues with repeat offenders, with some flagged accounts remaining active for months. Meta has since introduced a 'penalty bid' system to charge suspected fraudsters more in ad auctions as a mitigation strategy.

Regulators are taking notice, with the U.S. Securities and Exchange Commission (SEC) reportedly investigating Meta for running financial scam ads. In the UK, a 2023 report indicated that 54% of payment-related scam losses occurred on Meta platforms. Meta's internal projections aim to reduce scam-related ad revenue from 10.1% in 2024 to 7.3% by the end of 2025, with a further target of 5.8% by 2027. A Meta spokesperson described the 10% figure as a "rough and overly-inclusive estimate" and stated that subsequent reviews found many ads in the calculation to be legitimate.

These revelations emerge as Meta invests heavily ($72 billion) in artificial intelligence, raising questions about balancing growth with platform integrity. Analysts suggest the company's internal tolerance for scam ad revenue underscores the scale of the problem and the financial stakes involved.

Impact: This news could lead to intensified regulatory scrutiny and potential fines for Meta Platforms, impacting its advertising policies and user trust. Investor confidence may waver due to concerns about platform integrity and risk management, potentially affecting its stock price. The revelations also put a spotlight on broader issues of advertising transparency and safety within the global tech industry, relevant for companies and advertisers worldwide. Rating: 7/10

Difficult Terms: Ad Revenue: Money earned by a company for displaying advertisements on its platforms. Scams: Fraudulent schemes designed to deceive people into giving money or personal information. Banned Products: Goods or services that are illegal or prohibited from being advertised or sold. Higher Risk Ads: Advertisements that have a greater potential to involve fraudulent activities or harmful content. Annualised Revenue: Revenue calculated for a full year, often by projecting shorter-term earnings. Enforcement Teams: Company departments responsible for ensuring policies and regulations are followed. Penalty Bid System: A strategy where suspected fraudulent advertisers pay more for ad placements to discourage them and limit exposure. Capital Expenditure (Capex): Funds used by a company to acquire, upgrade, and maintain physical assets. Platform Integrity: The reliability, security, and trustworthiness of an online platform.