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The crack at the heart of Facebook's advertising business

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The recent focus on security breaches and departed Instagram founders around here has prevented us fr
 
October 3 · Issue #219 · View online
The Interface
The recent focus on security breaches and departed Instagram founders around here has prevented us from asking us more mundane questions, such as: how is Facebook’s advertising business going? Today, two quick items on that front.
One, my people are mad at Facebook for requesting that they register as political advertisers in order to promote their gay cabaret shows. Eli Rosenberg reports in the Washington Post:
The Washington Post found dozens of advertisements mentioning LGBT themes and words that the company blocked for supposedly being political, according to a public database Facebook keeps.
The rejections, the majority of which Facebook told The Post were in error, underscore the company’s challenges in regulating the massive amount of information flowing through its service, an issue that burst into the fore after the disclosure that Russian-state actors used advertisements on Facebook to sow discord during the 2016 U.S. election. But they also touch on a deeper tension as the company seeks to better regulate political uses of its platform. Though Facebook has taken pains to appear neutral, the censorship of LGBT ads, however inadvertent, points to the company’s difficulty in finding a middle ground in a tense national climate where policy increasingly hinges on fundamental questions about race and identity.
It’s too much to say that these ads were “censored.” Registering as a political advertiser is certainly a hassle; it involves the US Mail. But Facebook didn’t reject the ads so much as it requested more information about the advertiser — which, as the Post notes, the company later admitted that it did in error. Securing the platform means hassling lots of people, some of whom will be hassled unfairly. This issue is not unique to Facebook; perhaps you have ever waited in a security line at the airport?
In any case, as I said, my people are mad:
Many of the groups’ administrators said their experience had given them a sour impression of the company, though most said there were few alternatives for getting their message out to wide groups of people.
“Why is this community considered a political community?” Bonner, the motivational speaker, said in an interview with The Post. “Immigrants are political. LGBT is now political. African Americans are political. Asian Americans are political. Where does this stop when all we’re trying to do is live our lives?”
Of course, much of the time, being a member of the LGBT community does feel like a political act, although one that should not require you to register with Facebook as a politician. A spokeswoman told the Post that it intends to require LGBT people to register as political advertisers only when they advocate for specific policies or political positions, which seems fair enough. Now Facebook’s content moderators just need to catch up to that policy.
As the Post illustrates, Facebook remains a critical tool for niche advertisers looking to reach their far-flung audiences. For big brand advertisers, though, Facebook can be a less certain proposition. That was my takeaway from Tim Peterson’s story in Digiday today about ad buyers’ apathy toward so-called premium programming on Watch, Facebook’s nascent video platform.
Peterson says the ads are selling so badly that the price of the ads has dropped by two-thirds this year:
Facebook has begun selling video ads through a program called In-Stream Reserve. Similar to YouTube’s Google Preferred program, In-Stream Reserve puts a velvet rope around Facebook’s most prized video inventory and sells it as a standalone package. However, what Facebook considers prized programming may not match with advertisers’ expectations, especially among TV ad buyers who are accustomed to buying individual programs on linear TV and may be unfamiliar with Facebook shows like “Fear Pong” and “Truth or Drink,” which along with MaxNoSleeves are also part of In-Stream Reserve.
When Facebook pitched the program as a test earlier this year, it asked advertisers to commit to spend $750,000 over three months. The price tag has since dropped to roughly $250,000 over three months, according to two agency execs with knowledge of the matter. A Facebook spokesperson declined to comment on pricing.
I don’t want to make too much of this; Facebook sees original video as a long game, and it seems likely to invest in Watch for years, even amid apathy from viewers and advertisers alike. The alternative — that it never becomes a destination for video consumption — is simply too chilling to contemplate.
But viewed together, these stories show the crack at the heart of Facebook’s advertising business. News Feed ads remain among the most lucrative digital products ever designed, but they’re also a legacy product for a company that increasingly must find its growth elsewhere. And the project to make them accountable to the public is expensive, frustrating, and far from complete.
Meanwhile, as Facebook attempts to promote newer advertising formats that will carry it into the future, it finds itself in much more competitive waters. The LGBT community only has so many places it can promote its cabaret shows. Television advertisers, on the other hand, can still afford to be quite picky.

Democracy
Facebook Briefs Lawmakers on Breach in Effort to Guard Against Backlash
Facebook's lead EU regulator opens probe into data breach
Facebook Faces Political Hurdle Over Banned Party in China
Fake Ad Claiming Iran’s President Endorsed Beto O’Rourke Is Pulled From Production
Shiva Ayyadurai’s Senate Campaign Was Being Promoted By Fake Facebook Accounts
South Korea Declares War on ‘Fake News,’ Worrying Government Critics
Tim Cook to talk consumer privacy and data ethics at European data protection conference later this month
Google is building a search engine for fact checks
Elsewhere
Facebook's Lead Board Member Backs Zuckerberg in Wake of Breach
Facebook starts Africa fact-checking but WhatsApp the problem
The Dangers of YouTube for Young Children
Reddit hits 1 billion video views per month a year after launching its own video player
Secret co-founder David Byttow joins Snap as director of engineering
Launches
Google’s cyber unit Jigsaw introduces Intra, a new security app dedicated to busting censorship
WhatsApp Beta 2.18.301 brings picture-in-picture video playback for YouTube, Facebook, and Instagram
Facebook adds A.I. to Marketplace for categorization, price suggestions and soon, visual search
Twitter adds Data Saver feature to its iOS and Android apps
Recommendations startup Likewise emerges from Bill Gates’ private office, letting friends track and share their favorite things
Takes
Russian Meddling Is a Symptom, Not the Disease
Some problems with reposting
All Of Your Presidential Alert Jokes Were Great. Good Job, Everyone.
And finally ...
Researchers: Selfie-related deaths on the rise, call for 'no selfie zones'
Talk to me
Send me tips, comments, questions, and your rejected gay Facebook ads: casey@theverge.com
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