Mr. Facebook Goes to Washington

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Representatives from Twitter, Facebook and Google swear into a House Intelligence Committee hearing Thursday.
Representatives from Twitter, Facebook and Google swear into a House Intelligence Committee hearing Thursday. Credit: Andrew Harrer_Bloomberg

Marketers watching the postmortem of Facebook's role in last year's election mess are getting a new appreciation for the social network—and some new worries.

Facebook hasn't suffered financially since it said Russian front groups used it to sow discord and misinformation around the presidential election. Last week, it both sent its general counsel to testify before critical members of Congress and reported record ad revenue: more than $10 billion in just the third quarter. But advertisers are starting to wonder whether they're creating a monster.

"What we're seeing is a rare peek behind the curtain," says one executive at an agency holding company, speaking on condition of anonymity. "Whether you're pro-Trump or
anti-Trump, everyone in advertising has an opinion about the election."

While it's far from clear whether any of it tilted the outcome, the Russian meddling and its fallout has thrown the platforms' power into sharp relief. Dozens of people turned out last year for dueling rallies about a Houston mosque—encouraged on both sides by operatives of the Kremlin-backed Internet Research Agency, according to Facebook.

This was just one of the scenarios that drew the spotlight during the testimony by Facebook as well as Twitter and Google. Facebook has said 470 fake accounts, with names like United Muslims of America and the Heart of Texas, bought $100,000 in paid messages reaching more than 10 million people. One ad pictured Satan fighting Jesus Christ on behalf of Hillary Clinton. ("Press 'like' to help Jesus win!" it said.) After the vote, another ad called on people to protest the president-elect.

Brands and agencies are also starting to focus on Facebook's own modus operandi. Facebook staff consulted with Trump's campaign, fine-tuning messaging and targeting to maximize results. In itself, that's not shocking; the company says the Clinton campaign turned down offers of similar help. But the Trump team shelled out about $100 million on digital ads, mostly with Facebook, according to Trump's digital manager, Brad Parscale. Suddenly ad executives are wondering what Facebook is doing for their own rivals.

"What's bothersome is I've never seen that level of service," says a social media executive at a top digital agency. "What's preventing Facebook from doing the same thing with my competitor?"

Facebook declined to comment for this story, but a spokesman did point to the company's earnings call with analysts last week in which Chief Operating Officer Sheryl Sandberg noted Facebook now has 6 million advertisers. Sandberg made a point of saying that Facebook's data and targeting tools were open to all advertisers, especially small and medium-size businesses.

Marketing executives are skeptical. "They are arming the highest bidder," the social media agency exec insists.

It boils down to data. Brands upload their customer email lists and other consumer data directly to Facebook, Google and others to try to improve the targeting and measurement of their ads.

"How hard would it be for your competitor or even Facebook itself to make decisions that are not in your best interest, based on data you had once provided?" asks a digital specialist at a major media buying agency.

Charles Manning, CEO of Kochava, a mobile advertising data platform that works with brands to protect data, says brands have a hard time avoiding Facebook or Google: They either play in their private gardens or miss out on their large audiences.

"Marketing does work, and advertising is effective," he says. "Data is the new oil and if used effectively it can be quite meaningful."

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