That disconnect was on display on Wednesday night, as Facebook advertising executives mingled with reporters at the upscale 1 Hotel Central Park over cocktails and passed snacks that included duck confit taquitos and salmon caviar pancakes. Just before the event started, Mr. Zuckerberg responded to a claim from President Trump that Facebook was “anti-Trump.” The event, which Facebook told reporters in late August would be on the record — meaning discussions there could be reported on — was made off the record last week, a few hours after Ms. Sandberg posted her response to the issue of racist ads.
As Facebook sought to polish its reputation, industry leaders were wrestling with the misuse of marketing tools that had been developed for their benefit. Facebook is seen as an unavoidable force, not only because it’s the second-biggest seller of online advertising after Google, but also because it provides companies with unprecedented methods for targeting ads to people based on their tastes and habits.
“Sometimes our industry gets so enamored with new things that we lose sight of unintended consequences,” said Sarah Hofstetter, chief executive of the ad agency 360i. “Data and personalization is one of those things. It can be used for phenomenal targeting of potential consumers to buy cookies, toys and book hotel rooms, but it also can be used to target hate groups and inspire nefarious outcomes.”
She added, “Whether they like it or not, media companies have a tremendous responsibility to protect the public from itself.”
But while the social concerns over such misuse are clear, brands are not responding by changing the way they spend their advertising budgets, as they did earlier this year when ads for brands like AT&T were discovered on YouTube videos promoting terrorism and hate speech.
“We haven’t seen any clients question their investments in Facebook in response to the news, and I think the main reason for that is that no brands were directly or indirectly harmed by this activity,” said Aaron Shapiro, chief executive of the digital ad agency Huge. “It’s definitely something the marketing community is monitoring very carefully, because certainly, if it becomes a big enough issue where public association with Facebook starts to become negative, that’s a totally different story where advertisers would have to pay attention.”
Raja Rajamannar, the chief marketing officer of Mastercard, said that although he was confident that digital platforms would do their best to fix their issues, their unparalleled size made the point essentially moot. “I cannot block them off and say I don’t want to deal with them anymore because they’ve got a huge reach and that reach matters to me and it is very economical reach, too,” he said of Facebook.
Still, it is very likely that Facebook — and Google — will need to do more to show advertisers that they are policing abuse and that their ads actually deliver.
“The burden of proof that they are effective rises with every misstep on the social or political spectrum,” said Rob Norman, the chief digital officer of GroupM, the media-buying arm of the ad giant WPP.
Google and Facebook are often referred to as the “duopoly” within the ad industry; the research firm eMarketer projects that the two companies will collectively take in 63 percent of all digital ad investments in the United States this year.
Mr. Norman raised regulation as a possibility that could affect the dominance of the companies. He mused about the possibility of regulators saying “that targeted advertising of cohorts of let’s say, less than a million people, is now illegal.” A regulator could potentially argue that “the moment you can get it down to incredibly granular population groups, that’s where the bad actions start to take place,” he said.
There are also questions around how Facebook will handle disclosure of ads, for political and nonpolitical causes, going forward.
While advertising has “perennially been misused in political campaigns,” the anonymity associated with the Russian ads on Facebook makes it newly dangerous, said Jeff Goodby, co-chairman and partner of the agency Goodby, Silverstein & Partners.
“What would stop any of our clients from going out and doing this now?” Mr. Goodby said. “It’s a possibility to just go out there and flood social media with things that are anonymous, seemingly innocent expressions of opinion, which is what we’re addicted to. But it’s interesting to think about what happens if we’re being manipulated by that — the very thing we’re addicted to suddenly becomes like a heroin, it hurts us suddenly, people use it against us.”
Source: New York Times – Technology