Company / division: Facebook
Mark Zuckerberg has dropped plans to have Facebook create a new share class designed to allow him to retain voting control of the company even as he sells many of his shares to fund his philanthropic effort. The move had angered shareholders, who filed suit to prevent the change, and Zuckerberg appears to have caved rather than have to go to court to defend his actions (and potentially the broader issue of the special class of shares he already holds). His argument is that Facebook is doing so well that he can retain control while selling enough shares to fund his philanthropic efforts. The case would have been really awkward for Zuckerberg at a time when he’s been making significant changes and concessions to try to improve public perceptions of Facebook and him personally, so this was probably a smart move, and one which won’t have too many negative consequences for him (and none for Facebook as a company).
Facebook has announced that it’s partnering with Nielsen to provide advertisers with a combined measurement of brand lift for campaigns that run across both Facebook and TV. That provides a consistent set of metrics for advertisers that use both platforms, but more importantly it puts a big dent in the idea that Facebook and TV are at war, a narrative the media seems keen to perpetuate but which Facebook itself has repeatedly downplayed. While it’s certainly the case that Facebook is chasing some of the same ad dollars as TV, and Facebook has even made the case that TV ads are less effective than Facebook ads, it’s also pushed back against the idea that it’s trying to kill TV advertising. This partnership suggests that Facebook is realistic about the fact that most advertisers are going to continue to run ads both online (including on its platform) and on TV, and that it can best support those advertisers by making it easier to measure the performance of campaigns in both media. It’s also making the argument that campaigns that run in this way actually see better results than those which only run in one place.
A key part of the Advertising Sustainability narrative on the site is the issue of two companies’ dominance of online advertising in the US and to a lesser extent other western markets. New data from eMarketer is a useful checkpoint in measuring that dominance – it says that the two companies will suck up 63% of US online ad spend in 2017, an increase from its earlier forecast of 60%. Microsoft comes in third place way behind the top two, with Verizon in fourth for now and Amazon projected to take its place over the next couple of years. Google and Facebook’s dominance is neither surprise nor mystery at this point – the former has the unique combination of timeliness and relevance that search offers, while the latter has created the most powerful combination of audience and native advertising, dominating their respective categories and leaving the dregs for smaller competitors and less effective forms of advertising. Importantly, though, eMarketer doesn’t see the two companies’ share rising dramatically over the next couple of years – it projects just 68% share in 2019, meaning that other companies will still capture nearly a third of the market, and their dollar share of the total will actually rise since the market is still growing rapidly. eMarketer’s blog post with all the numbers is here.
Mark Zuckerberg’s first big action on returning from paternity leave today was to make a statement via his company’s live platform about the ongoing issue of Russian ad buying to influence last year’s US presidential election and related issues, the text of which has now been posted to Zuckerberg’s Facebook page. The key news from the statement is that Facebook will make the ads in question available to the US Congress, something that it had previously not done out of concern for violating privacy laws. But Zuckerberg also addressed the broader issue of Facebook’s use as a tool to meddle in elections. To my mind, he was refreshingly honest in conceding that Facebook was never going to be able to eliminate this behavior, and would focus instead on the more realistic goal of making it harder. He promised to continue investigating what happened during the election last year and share as much as possible about the findings. He announced a change to how political ads are displayed on Facebook, making it clear which entities are showing ads to which users at any given point in time, something it had previously resisted doing, ostensibly again out of privacy concerns.
There are several other elements to today’s statement which are worth reading in full, but the key takeaway is that Facebook is taking the issues seriously and responding to them in a variety of ways. One of the most notable lines in the statement, though, is this: “We don’t check what people say before they say it, and frankly, I don’t think our society shouldn’t want us to. Freedom means you don’t have to ask permission first, and that by default you can say what you want.” That’s always been Facebook’s default position, and I think it’s the right one – the minute it gets into policing which content is and isn’t acceptable ahead of time, it’s in an increasingly powerful and dangerous role, and it has a sometimes poor track record of making those calls. (A current example is its banning of the Rohingya insurgent group in Myanmar, which is at the very least a highly political decision in light of the ongoing actions of the Burmese government.) My feeling is that election meddling and many other issues facing Facebook – including the recent problems with ad targeting – are 99.9% problems: in other words, if Facebook can stop 99.9% (or some other very large percentage) of that activity from happening, that should be good enough, because trying to solve 100% of them is likely to involve far more work and cost both in financial and freedom of speech terms than it’s worth.
Facebook Announces Further Changes to Ad Targeting Options (Sep 20, 2017)
Facebook COO Sheryl Sandberg posted to the site today to address the issue of offensive terms appearing in the targeting options for would-be advertisers, a problem that emerged last week and which Facebook issued a temporary fix for later in the week. As I said in commenting on Facebook’s initial tweaks, those didn’t feel like a permanent solution and I predicted that it would slowly dial the temporary limits back as it found more long-term answers. Sandberg’s post today both serves as a mea culpa for not detecting and fixing the issues more proactively, and as a confirmation of my prediction: Facebook has begun allowing some of the most common user-specified interests back into its ad targeting tool and will continue broadening those that can be used over time with more human curation. It will also be clamping down more (though in unspecified ways) on ensuring the actual content served up through ads is appropriate. I’ve felt since this all first came to light that the response to it was overblown, and that the criticism Facebook has faced over it was far too harsh, and we discussed this in some depth on the Beyond Devices Podcast last week, in which my co-host Aaron Miller took the opposite view. A piece in Slate today is particularly hard on the company on this front, arguing that the company’s pursuit of profits has somehow blinded it to these issues. The reality here is that at Facebook’s scale almost any potential misuse of its platform will squeeze through somehow simply because Facebook can’t possibly police it thoroughly enough to eliminate it entirely without also generating lots of false positives. The scale of the problem identified last week and its likely impact were so minimal as to be almost insignificant, and in general Facebook is making good progress on this front and on others in taking more responsibility for policing its platform and minimizing its potential for harm. I’m therefore more inclined than others to cut it a break.
Facebook Opens AI Lab in Montreal (Sep 15, 2017)
Facebook has announced that it’s making changes to the type of content that can be monetized on its site, introducing some serious limitations to which content ads will run against. On the one hand, this is clearly an echo of changes YouTube made earlier this year in response to the boycott and broader backlash against ads showing up next to undesirable content, and therefore a sop to advertisers. But on the other hand, it means content creators who may in some cases have built businesses out of creating content in some of the now unmonetizable categories will understandably be upset. Some of the bans on monetization are entirely common sense in nature, while others are likely to be more controversial, notably a ban on monetizing content about highly controversial issues, seemingly including news coverage of those issues. That’s one that Facebook is definitely going to want to clarify to avoid charges of censorship.
Facebook is Testing its Houseparty Clone Bonfire in Denmark (Sep 13, 2017)
Facebook has been reported for a while to be working on a potential clone of popular video chat app Houseparty, and it has now officially launched the app in Denmark under the previously reported Bonfire name as a limited test. The features sound similar to those in the Houseparty app, which was recently reported to be achieving some impressive user metrics (though I noted some important caveats). The key to Facebook’s success here, as I also noted in that earlier piece on Houseparty, will be disconnecting this app to some extent from the Facebook social graph and allowing users to form more intimate circles of friends as they can in Instagram. That’s been a key part of the value proposition for both Snapchat and Houseparty, and it’s something that’s never come easy to Facebook, which still often seems to misunderstand its most effective competitors for users’ time.
via The Next Web