Back to the Future

Dear Reader,

Facebook has become a huge colossus in the advertising industry, sucking the air out of the ad market and seizing a gigantic market share with their low prices and fine-tuned demographic targeting. This tremendous surge has led to large profits and millions of paying ad customers. One customer that might not be paying for long is Unilever, a vast consumer conglomerate with properties like Lipton and Ben & Jerry's. At the Interactive Advertising Bureau's annual leadership meeting in Palm Desert, California, Unilever spokesman Keith Weed denounced social media companies like Facebook for what he called an "erosion of trust" [1]. Although he had several comments about transparency and truthfulness, some of his strongest words were about what he called, "…an environment where our consumers can't trust what they see online." In what sounds like an ultimatum, he added, "Unilever will not invest in platforms that do not protect our children or which create division in our society."

The problem, of course, is the role Facebook and other big social media companies play in spreading false information. Many experts believe the fake news epidemic may have influenced the 2016 US election. Where did all this bad information come from? From shadowy, fake accounts, and it took months after the election to even sort out what the ads were and where they started.

For a little context on why this new phenomenon is so weird, it might be best to start with how ad buying used to work (and still does work) at conventional media companies. In the old model, ad sales occurred within an active relationship between an ad buyer rep, working for the company that is advertising, and an ad seller rep, working for the media company. After the deal is made, a creative team working for the ad buyer creates an ad and sends it to the media company. Someone within the production team of the media company receives the ad image and logs it, taking whatever steps are necessary to schedule it, or, in the case of a print publication, place it in an issue.

Along the way, the ad crosses the hands and eyes of several humans, and at any point, someone can raise a question if the ad is offensive or misleading. The media company doesn't want an offensive ad on their website or in their magazine because they have a reputation that is associated with the contents of the publication. The company buying the ad also has a reputation to protect. The ad buyer pays attention to where the ad goes and makes sure it appears in a place where it won't be associated with nefarious and creepy content.

In the new social media advertising model, however, ads are like water. You turn on the tap and they flow, more or less automatically, from the point they are envisioned, seeping out into the Internet according to the nuances of a predetermined demographic profile.

The popular conception is that Facebook and other social media companies have brought innovation to ad targeting through their command of personal profiling data, which is certainly true. But the other part of the story that receives far less information is that they have put themselves in black ink by automating the ad purchase and upload process, which allows them to operate at a massive scale without the need for human intervention. In other words, part of their "innovation" has nothing to do with technical brilliance and is simply that they operate without the traditional protections built into the system – like the manager of a swimming pool who "innovates" by laying off all the lifeguards.

In November 2017, Mark Zuckerberg told shareholders the company is serious about combating the perception that Facebook is a platform for false information [2]. He announced a new initiative that he warned could "…significantly impact our profitability going forward." The initiative will increase the total expenses for the company between 45% and 60% over 2017 levels, and much of the money will reportedly go to hiring thousands of new employees who will take some personal ownership of ads going on the site.

If Facebook follows through on their promise to wrangle some human judgment back into the ad process, they should be commended for taking the problem seriously. If they succeed, they will see their profits decline, and they will gradually start to look more like an everyday online company and less like a supernatural disrupter. They might even have to raise their ad prices, which might bring some competition back and make the other online advertising venues seem not-so-obsolete after all. But hey, that's progress.

Joe Casad, Editor in Chief