A look at how companies try to reach potential customers.
Advertising
Facebook, Twitter Political Ads Should Mimic TV Rules
[Commentary] Some political TV advertising can be misleading, especially those super PAC (political action committee) commercials. You’re not sure where they come from or who is behind it. But what Facebook found out is worse: A Russian-backed "troll farm" bought $100,000 worth of advertising space on Facebook through fake accounts, according to the company. The shadowy entity had a history of pushing pro-Kremlin propaganda. The new state of media carries specific problems, such as how you can buy advertising. In particular, reports suggest the Russian “troll farm” was using Facebook’s automated, self-service ad-buying tool. All that means way less oversight. And in some cases, social media wants to take a big hands-off approach.
The Fake Americans Russia Created to Influence the Election
The Russian information attack on the election did not stop with the hacking and leaking of Democratic emails or the fire hose of stories, true, false and in between, that battered Hillary Clinton on Russian outlets like RT and Sputnik. Far less splashy, and far more difficult to trace, was Russia’s experimentation on Facebook and Twitter, the American companies that essentially invented the tools of social media and, in this case, did not stop them from being turned into engines of deception and propaganda.
Facebook’s Russian Ads Disclosure Opens A New Front That Could Lead To Regulation
Facebook is facing a new push to reveal how its vast power is being used after it disclosed that roughly $100,000 worth of political ads were purchased on its platform by fake accounts and pages connected to a Russian troll operation. Open government advocates and researchers who study political ads say that Facebook’s massive reach and lack of transparency about ads on its platform represent a risk to the democratic process. Alex Howard, deputy director of the Sunlight Foundation, which advocates for government transparency, said highly targeted online ads can be “weaponized against liberal democracies” because they do not meet the same levels of disclosure and visibility as traditional radio, TV, and print ads.
Senate Intelligence Committee Vice Chairman Mark Warner (D-WV) said, "An American can still figure out what content is being used on TV advertising. ... But in social media there's no such requirement. There may be a reform process here. I actually think the social media companies would not oppose, because I think Americans, particularly when it comes to elections, ought to be able to know if there is foreign-sponsored content coming into their electoral process."
Facebook says it sold political ads to Russian company during 2016 election
Apparently, representatives of Facebook told congressional investigators that it has discovered it sold ads during the US presidential election to a shadowy Russian company seeking to target voters. Facebook officials reported that they traced the ad sales, totaling $100,000, to a Russian “troll farm” with a history of pushing pro-Kremlin propaganda, apparently.
A small portion of the ads, which began in the summer of 2015, directly named Republican nominee Donald Trump and Democrat Hillary Clinton, the people said. Most of the ads focused on pumping politically divisive issues such as gun rights and immigration fears, as well as gay rights and racial discrimination. Even though the ad spending from Russia is tiny relative to overall campaign costs, the report from Facebook that a Russian firm was able to target political messages is likely to fuel pointed questions from investigators about whether the Russians received guidance from people in the United States — a question some Democrats have been asking for months.
Facebook’s Ad Metrics Come Under Scrutiny Yet Again
Facebook's advertising metrics have again been called into question, after Pivotal Research Group senior analyst Brian Wieser pointed out a large discrepancy between US census data and the potential reach that the social network promises advertisers. Wieser issued a note pointing out that Facebook's Adverts Manager tool promises a potential reach of 41 million 18-24 year-olds in the US, while recent census data said there only 31 million people living in the U.S. within that age range. For 25-34 year-olds, Facebook claims a potential reach of 60 million, versus the 45 million people counted in the census in 2016. Fortune's own experiments with the Adverts Manager backed up the figures Wieser quoted.
What's more, the problem does not seem to be confined to the U.S. For advertisers trying to target Facebook users in the U.K., the company promises it could potentially reach 5.8 million 20-24 year-olds, 6.4 million 25-29 year-olds, and 5.2 million 30-34 year olds. When the last census was conducted in 2011, the U.K. only had 4.3 million 20-24 year-olds, 4.3 million 25-29 year-olds, and 4.1 million 30-34 year olds.
Verizon Wants to Build an Advertising Juggernaut. It Needs Your Data First
A new Verizon rewards program, Verizon Up, provides credits that wireless subscribers can use for concert tickets, movie premieres and phone upgrades. But it comes with a catch: Customers must give the carrier access to their web-browsing history, app usage and location data, which Verizon says it uses to personalize the rewards and deliver targeted advertising as its customers browse the web.
The trade-off is part of Verizon’s effort to build a digital advertising business to compete with web giants Facebook and Alphabet’s Google, which often already possess much of the same customer information. Even though Congress earlier this year dismantled tough privacy regulations on telecommunications providers, Verizon still wants customers to opt-in to its most comprehensive advertising program, called Verizon Selects. Data collected under the program is shared with Oath, the digital-media unit Verizon created when it bought AOL and Yahoo.
Lenovo Settles FTC Charges it Harmed Consumers With Preinstalled Software on its Laptops that Compromised Online Security
Lenovo Inc., one of the world’s largest computer manufacturers, has agreed to settle charges by the Federal Trade Commission and 32 State Attorneys General that the company harmed consumers by pre-loading software on some laptops that compromised security protections in order to deliver ads to consumers. In its complaint, the FTC charged that beginning in August 2014 Lenovo began selling consumer laptops in the United States that came with a preinstalled “man-in-the-middle” software program called VisualDiscovery that interfered with how a user’s browser interacted with websites and created serious security vulnerabilities.
As part of the settlement with the FTC, Lenovo is prohibited from misrepresenting any features of software preloaded on laptops that will inject advertising into consumers’ Internet browsing sessions or transmit sensitive consumer information to third parties. The company must also get consumers’ affirmative consent before pre-installing this type of software. In addition, the company is required for 20 years to implement a comprehensive software security program for most consumer software preloaded on its laptops. The security program will also be subject to third-party audits.
Dark money, super PAC spending surges ahead of 2018 midterms
Outside groups, such as super PACs and their more secretive brethren politically active nonprofits, spent more money during the first eight months of the 2018 election cycle than over the same period in any previous cycle. Outside groups have spent nearly $48 million as of August 24 – or more than double the $20.7 million the groups spent at this point during the 2016 presidential elections and the $18 million doled out at this point in 2014, the last midterm cycle.
The record $48 million should be considered the minimum total, however, given the FEC doesn’t require groups to disclose spending on ads discussing issues and those mentioning candidates for office outside of the agency’s reporting windows (30 days before a primary election; 60 days before a general election). Some of the usual suspects are fueling the record spending. Super PACs, which can raise and spend unlimited contributions from wealthy donors, contributed $22.3 million – nearly doubling the $11.8 million they had spent at this point in 2014. Similarly, the $7.4 million spent by politically active nonprofits is nearly four times the roughly $2 million spent by those groups at this point in 2014.
Complaints Filed Against TV Stations for Public File Violations on Political Issue Ads
The Campaign Legal Center and Issue One, two political “watchdog” organizations, filed Federal Communications Commission complaints against two Georgia TV stations, alleging violations of the rules that govern the documents that need to be placed into a station’s public inspection file regarding political “issue advertising".
FCC rules require that stations place into their public files information concerning any advertising dealing with controversial issues of public importance including the list of the sponsoring organization’s chief executive officers or directors. Section 315 of the Communications Act requires that, when those issues are “matters of national importance,” the station must put into their public file additional information similar to the information that they include in their file for candidate ads, including the specifics of the schedule for the ads including price information and an identification of the issue to which the ad is directed. The complaints allege that, while the stations included this additional information in their public file, the form that was in the public file stated that the sponsors of the ads did not consider the issues to be ads that addressed a matter of national importance, despite the fact that they addressed candidates involved in the recent highly contested election for an open Congressional seat in the Atlanta suburbs.
Why Tech Giants Like Google and Amazon Are Spending Big On TV Ads
In recent months, industry pundits sat up and took notice when online advertising giant Google started doubling down on its TV advertising investment. The tech company more than doubled its TV ad spend during the 2016 holiday quarter, laying out $109.8 million for ads promoting its Google Pixel mobile device. Launching Google Home meant a further $5 million for a single 30-second spot in January.
What’s remarkable is that Google is one of the most prominent TV spenders. The company built on digital advertising seems to know something about TV advertising that other brands don’t: In many cases, there’s just no substitute for it.