Facebook’s Path To Ad Dominance Comes With A Litany Of Allegations

Eric Lieberman | Deputy Editor

Facebook’s dominance in the digital advertising market has come with allegations of improprieties in recent months that show how far the company is apparently willing to go to for more ad revenue.

The social media company is currently being accused of targeting emotionally vulnerable youths, after The Australian published secret documents Monday from Facebook’s Australia office, according to News.com.au.

The confidential files allegedly show that Facebook tries to pinpoint potentially troubled people as young as fourteen by deciphering particular emotions like “defeated,” “overwhelmed,” “stressed,” “anxious,” “stupid,” “useless,” and feeling like a “failure.”

Other apparent insights Facebook allegedly seeks are if a teenager is showing interest in “working out and losing weight,” “looking good,” and achieving “body confidence,” reports Ars Technica.

Such information is gathered through an algorithm, which analyzes people’s sentiments with calculations. Marketers value such data — especially from the younger generation, which are not only consumers, but highly engaged social media users — because it lets ads reach the right people thereby making the process more cost-efficient.

The social media company turned tech conglomerate is capitalizing on this consumer knowledge. Facebook likely made $8 billion from digital advertising revenue in 2015, according to an estimate by analyst Brian Wieser.

Going forward, the company is expected to make $33.76 billion from ad revenues, according to eMarketer, a market research company, meaning the progression is likely to continue upwards.

Google (the only company that dominates more of the market) and Facebook combined account for 90 percent of the growth in ad revenue, essentially rendering it a duopoly, reports Jason Kint, the CEO of Digital Content Next, an advertising trade group.

Press Gazette, a British publication primarily focused on the news industry, launched a petition in April in hopes to stop the advertising duopoly, which it alleges destroys journalism because it “will lead smaller players to starve.” (RELATED: Facebook Continues Quest For World Dominance, Starts Hiring In Africa)

“By 2020 it has been estimated that 71 per cent of the money spent on digital advertising in the UK will go to Google and Facebook,” the Press Gazette’s official petition reads.

“We are concerned that your commercial dominance will drive news publishers who increasingly rely on digital advertising out of business,” the petition adds, directly addressing the two companies. “This will be bad for you (because you will no longer be able to use their content) and bad for society because we will all be less well informed.”

The latest youth targeting is not the first time Facebook’s advertising practices have become a contentious, even scandalous topic.

The tech giant was forced to apologize in September for inflating the average viewing time for video ads, consequently misleading and overcharging advertisers.

Facebook then promised in November that it would revamp how it measures advertisements on its website and bring in third-party assistance after it was discovered it made even more miscalculations.

The social media company was also accused of violating the 1964 Civil Rights Act since it has advertising features in which users can exclude based on demographics, specifically “ethnic affinity.”

Refuting allegations of illegality or immorality, Christian Martinez, Head of Multicultural (sic) at Facebook, said at the time that if the company finds something discriminatory in advertising, it “will take aggressive enforcement action.”

Martinez explained that such capabilities are important for advertisers because “for example, a nonprofit that’s hosting a career fair for the Hispanic community can use Facebook ads to reach people who have an interest in that community. And a merchant selling hair care products that are designed for black women can reach people who are most likely to want its products.”

Facebook also started doling out $15 checks to (mostly unsuspecting) users because it used their identifiable faces for advertisements on the site without permission. Facebook agreed to pay a total of $20 million in part of a class action lawsuit settlement. The criminal complaint also referenced that Facebook did not acquire consent from the parents of social media users under the age of eighteen.

A representative for Facebook Australia addressed the most recent findings of youth targeting, saying it will find out if and how such practices were allowed to occur.

“We have opened an investigation to understand the process failure and improve our oversight. We will undertake disciplinary and other processes as appropriate,” said the spokesperson, according to Ars Technica.

Facebook, though, officially stated that The Australian story alleging the targeting of troubled youths is “misleading.”

“Facebook does not offer tools to target people based on their emotional state,” the tech company wrote in an official blog post. “The analysis done by an Australian researcher was intended to help marketers understand how people express themselves on Facebook. It was never used to target ads and was based on data that was anonymous and aggregated.”

Like the original statement, though, Facebook says it will “review the research we perform” in order to “correct the oversight.”

While the leaked documents reportedly reveal that the data for youths is specific to Australia and New Zealand, it epitomizes Facebook’s assertive, even aggressive, advertisement schemes.

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