META Meta Platforms Inc

By Christopher Mims 

In a sometimes-heated hearing in Washington last April, 55 U.S. representatives questioned Facebook Inc. Chief Executive Mark Zuckerberg about privacy concerns and leaked user data. In the week before the U.S. midterm elections, about two-thirds of those same representatives are spending campaign dollars advertising on Facebook.

Politicians' enthusiasm for targeting potential voters and donors on Facebook cuts across party lines -- as did their criticisms. Paul Tonko, a Democrat, told Mr. Zuckerberg at the time, "Users trusted Facebook to prioritize user privacy and data security, and that trust has been shattered." Republican Tim Walberg expressed concern that Facebook was banning political content and advertising based on the views expressed in it.

Campaigns for both have subsequently sunk money into Facebook advertising, according to a tool Facebook recently released that allows anyone to look up ads for political campaigns and "issues of national importance." Neither congressman's campaign replied to requests for comment.

Rep. Greg Walden (R., Ore.), who ran the hearing before the House Energy and Commerce Committee, has placed hundreds of ads on Facebook since April, when Facebook's database of political advertising begins. "Greg Walden reaches voters in Oregon's Second District across all mediums. That includes connecting to voters online, on social-media platforms, and via radio, television, and print newspapers," says a spokesman for his campaign.

That few politicians feel they can escape the necessity of advertising on Facebook is precisely why we need to contemplate its ever-growing scale, revenue and power. The ramp-up in political spending across Facebook's social networks, which also include Instagram, is breathtaking: In 2014, digital ad spending was 1% of all political ad spending. Now it's 22%, or about $1.9 billion, according to the nonpartisan Center for Responsive Politics. Facebook says that politicians have spent nearly $300 million in the U.S. on Facebook ads since May. As of Oct. 30, Democrats were outspending Republicans on Facebook 3 to 1.

Politicians who want to reach the same voters their competitors are reaching on Facebook have little choice but to go there, too. That's despite mounting criticism that Facebook's algorithms are actually driving increased political polarization and concerns that the site serves as a vector for influence campaigns by Russia and now Iran. Facebook, a driver of our fractious political debate, can be seen as profiting from the fallout.

Giving Facebook money to target voters has become a collective-action problem, much like campaign-finance sore spots: Politicians on both sides of the aisle may wish to reduce the influence of Facebook in U.S. elections, but few are incentivized to act on that wish.

Targeting Voters

In the last midterm election season, sophisticated targeting with online ads was mostly limited to national campaigns, says Chris Massicotte, chief operating officer DSPolitical, an ad-targeting firm that works with progressive candidates and says it has targeted over 2.5 million ads since 2011. As such firms have proliferated, the cost of this kind of online advertising has dropped and the technology has moved down ballot. "Most of our clients are state legislative campaigns and city council races," he adds.

Facebook's targeting isn't just about its own huge trove of data -- although that helps. Campaigns and their consultants collect information about us from multiple data brokers, donor and mailing lists, voter registration logs and other sources of publicly available (or purchasable) information. Advertisers, political or not, can match their databases with our real identities to serve us a message.

"If I want Democrats who voted in the last two out of four general elections who are over the age of 55 and are women, that's something readily available in voter files," says Mr. Massicotte.

Facebook is also very useful for testing political messages. Campaigns can try out a message the way marketers float new brands on Instagram, getting near-instant feedback on what works and what doesn't. Those messages can subsequently be pushed out to other mediums, says Mr. Massicotte.

And as regional races gain national attention, candidates can leverage the power of Facebook to target donors outside of their district or state.

Tracking Voters

During the April House hearing, Rep. Debbie Dingell, (D., Mich.) told Mr. Zuckerberg, "You don't even know all the kinds of information Facebook is collecting from its own users." Pressing him further, she asked how many Facebook Pixels there are across the web. (Facebook Pixel is a piece of code that websites embed that lets Facebook track its users as they traverse the web.)

Her campaign website doesn't use Facebook Pixel. Instead, it uses a different tracking pixel, from technology company NGP VAN. The firm also allows campaigns to integrate data about voters with Facebook's ad network. And Rep. Dingell's campaign has purchased multiple ads on Facebook since April. Rep. Dingell's campaign didn't reply to a request for comment.

Among the House members who questioned Mr. Zuckerberg, four aren't currently running for office, and one doesn't have a campaign website. Among the remaining 50, 44 have at least one form of tracker on their campaign websites -- and 29 have the Facebook Pixel tracker, according to Chandler Givens, chief executive of data privacy firm TrackOff, which analyzed the sites for The Wall Street Journal.

"That's how they know who to track via Facebook ads -- by collecting our data without our knowledge and using it to influence the content we see, " he says.

Not on Facebook

While advertising on Facebook appears to be the norm this midterm season, there are those who have yet to buy ads on the service. It's not necessarily conscientious objection to Facebook: Perhaps an incumbent in a safe seat doesn't want to spend the money; perhaps a candidate still sees better results from TV or radio, or just isn't up-to-date on digital advertising.

Of House members who questioned Mr. Zuckerberg, Reps. Michael Burgess, Kathy Castor and Bobby Rush are all running for re-election this year but, according to Facebook's ad database, have not bought ads on the platform. All have overwhelming odds of winning their respective elections, according to the election-prediction site FiveThirtyEight.

Politicians who aren't on Facebook are ceding voters' attention to their opponents, says P.W. Singer, co-author of the book "LikeWar," which argues that Facebook has become another front in a global cyber conflict.

"It's both a battlespace and a marketplace," says Mr. Singer. The result is an arms race between politicians who must spend to get their message in front of potential voters and donors.

All of this lines up nicely with Facebook's profit motive. In the company's most recent quarterly report, the number of monthly active Facebook users in the U.S. and Europe was flat, but revenue per user went up significantly. As advertisers, be they politicians or merchants, become more sophisticated about using Facebook to micro-target shoppers and voters, Facebook will continue to profit.

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Write to Christopher Mims at christopher.mims@wsj.com

(END) Dow Jones Newswires

November 02, 2018 11:28 ET (15:28 GMT)

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