Are brands unwittingly financing fake news?

Are brands unwittingly financing fake news?
Stewart Morrison, managing director, MEA of FirmDecisions. (Supplied)
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Updated 07 October 2021

Are brands unwittingly financing fake news?

Are brands unwittingly financing fake news?
  • Over 4000 brands, including Pepsi, Starbucks, Nike & Amazon were found to have bought ads on misinformation websites

DUBAI: Last month, it was revealed that many of the world’s biggest brands have been found to advertise on digital sites containing COVID-19 misinformation.

An analysis of programmatic advertising data conducted by NewsGuard and Comscore found that nearly $2.6 billion in estimated advertising revenue is being sent to publishers of misinformation and disinformation each year by programmatic advertisers.

Over 4,000 brands, including Pepsi, Starbucks, Comcast, Verizon, Marriott, and even the CDC, were found to have bought ads on websites publishing misinformation about COVID-19, according to NewsGuard.

An analysis by the Bureau of Investigative Journalism also found that brands such as Nike, Amazon and Ted Baker, have been advertising on websites spreading COVID-19 misinformation. “These ads are placed through the ‘opaque by design’ digital advertising market, which is expected to be worth more than $455 billion this year,” the report stated.

The nature of programmatic advertising is what causes ads to be placed on misinformation websites because of the lack of transparency regarding where the ad is being placed.

Money flows to sites hosting harmful content because the system of bidding on ads means these sites get mixed in with other, more benign ones, Dr. Augustine Fou, an independent ad fraud researcher and former employee of advertising agency Omnicom said in the bureau’s report.

Arab News spoke to Stewart Morrison, managing director, MEA of FirmDecisions to better understand how brands and their agencies can prevent this from happening.

Firstly, how does something like this happen wherein a brand’s ad is placed on a site containing fake news and misinformation?

“In order to understand how brands end up advertising on fake or COVID conspiracy sites, it is first worth understanding how brands buy digital advertising. There are two ways in which digital inventory can be bought:

Directly with the publisher (non-biddable) where brands negotiate either themselves or via their agency to buy advertising space directly with the publisher or their representative in a private marketplace. This accounts for about one-third of digital ad spend.

“Using a trading platform called a DSP or demand-side platform by the brand or the media-buying agency to bid for media in online auctions. These work in a similar way to stock market trading platforms — the buyer logs in, sets criteria such as target demographic, interests, device, time of day, month, budget, etc. The DSP connects to the advertising inventory exchanges (where the publishers load their inventory to be purchased) and any time a person who fits the target criteria opens a publisher’s webpage, there is an instantaneous auction and the winning bidder serves an advert to an individual’s phone or desktop browser and the publisher gets paid. The aim of this type of advertising is better targeting and cost-effectiveness.

“Naturally, the websites in the exchange need to have legitimate visitors, which can be challenging, as there are millions of sites with fake or pointless content with no real people visiting, created with the sole purpose of essentially duping the DSPs into buying ads on their pages hereby earning them money. These are mixed in with legitimate websites in ad exchanges and because of the tools used by the fraudsters, the trading platforms can find it difficult to distinguish the difference.”

How similar or different is this issue from the brand safety issue that happened a few years ago?

“Brand safety issues have been ongoing for years as fraudsters and bad actors become more sophisticated. Digital media ad fraud cost the global marketing industry an estimated $19 billion in 2018 and is expected to reach $50 billion by 2025 — that’s between 5 to 10 percent of all ad digital spend.

“In the MENA region, the digital ad spend estimate is between $1.5 and $3 billion with 30 to 50 percent of digital ads being bought programmatically, such as via an online media inventory trading platform.

“With the latter, brands have three main challenges:

“The first challenge for brands is to make sure that their adverts are served on web pages that have real visitors. Fraudsters have sophisticated teams of people who create websites and then use bots to visit the sites thousands of times to make them look legitimate and popular. The ad inventory of these sites is then made available on ad exchanges.  

“Once the ads are served to a website with real visitors, the second challenge is to make sure their ads are ‘viewable.’ The Media Ratings Council considers an ad to have been ‘viewed’ if 50 percent of the pixels are in focus for 1 second or in the case of videos, 2 seconds is viewed. Additionally, advertisers also do not want their ads displayed off the bottom of the webpage where they are not seen.

“The third challenge is making sure the ads are shown in a brand-safe environment, which is to ensure the ads are not displayed alongside harmful content such as political propaganda or in this case COVID-19 conspiracy sites displaying false information that does not align with the brand’s values.”

What's the impact of such advertising on brand perception? 

“If ads are to have the desired impact on their consumers and drive meaningful customer conversion, they need to appear in the right context. Research by the Audience Project shows that one-third of consumers across multiple markets believe that ads appearing in a relevant context have a positive impact on brand perception. On the other hand, most consumers say that brands appearing in non-safe environments have a negative impact on perception.

“Customers may have little understanding of the complexities of buying digital advertising, and the websites that brands use to advertise help shape customers’ perceptions. This is becoming an even larger issue now with brands considering whether even legitimate publishers align to their values on sustainability, racism, and equality before spending money with them.”

How can brands and agencies prevent this from happening?

“Developing a list of preferred target ‘white list’ sites and ‘black list’ sites is a good starting point. This helps to guide the target media purchases and steer clear of sites that are fraudulent or do not align with the brand’s values. 

“The second is to audit the agencies and their media buying processes by reviewing the list of sites where the agency has spent the brand’s money and investigate. It is not uncommon during our contract compliance audits of agencies to uncover spend on sites that are defined as ‘unknown’ or ‘unpermissioned’ where we could not identify where the ads had actually run.  

“Brands should deploy technical tools to ensure sites can be identified by their tags and legitimacy established.”

What are the factors brands need to keep in mind when signing programmatic media contracts with their agencies?

“Brands need to make sure they have fully transparent contracts with their media agencies identifying all the intermediaries in the digital supply chain and what they cost and ensure this is defined in their agency agreements.

“All too often we see brand-agency contracts, which are ‘non-disclosed’ where the brand just pays a fee and has no visibility on any of the intermediaries or costs. This extends beyond their media agency or the programmatic platform used — they need to know what ad verification tools are used to mitigate fraud, what exchanges ads are being bought from, what data management platforms are used, and at what cost. 

“With everyone in the digital supply chain motivated by commissions or fees, they need to be held accountable if brands’ money is spent on fraudulent sites or sites that do not conform to their values. 

“Many advertisers now conduct media audits to ensure full transparency and performance of their media budgets and learn where the waste is in order to make sure every dollar reaches a real customer browsing a site that reflects the brand’s values.”


Snap’s stock drops as iPhone privacy controls pinch ad sales

In a statement, Snap CEO said the company has had to recalibrate its operations. (Twitter/AFP)
Updated 22 October 2021

Snap’s stock drops as iPhone privacy controls pinch ad sales

In a statement, Snap CEO said the company has had to recalibrate its operations. (Twitter/AFP)
  • Third-quarter earnings call reveals slump due to Apple’s privacy changes to iOS software on iPhones

SANTA MONICA: Snapchat’s corporate parent, Snap Inc., revealed during its third-quarter earnings call that its ad sales were being hit by a privacy crackdown rolled out on Apple’s iPhones earlier this year.

The disclosure raised investor fears that the app’s financial growth was going into tailspin, sparking a sell-off in after-hours trading that could foreshadow one of the biggest one-day drops in the company’s stock since it went public in 2017.

Snap’s shares plunged by nearly 22 percent in Thursday’s extended trading. If the decrease was mirrored in Friday’s regular trading session, it would approach the stock’s previous one-day nadir in May 2018 when its price also plummeted by nearly 22 percent — a decline which would wipe out nearly $30 billion in shareholder wealth.

The alarms set off by Snap’s disappointing performance could foreshadow troubles for other apps that may be having more problems tracking their users’ online activities because of an Apple update to the iPhone’s iOS software released in April.

The change blocks online tracking on iPhones unless a user grants explicit permission to do so, making it difficult for companies that sell ads based on the information they collect about people’s interests and location.

In a statement, Snap chief executive officer, Evan Spiegel, said the company has had to recalibrate its operations to “navigate significant headwinds, including changes to the iOS platform that impact the way advertising is targeted.”

Facebook, an outspoken critic of Apple’s new privacy controls, had already told investors that its ad sales could suffer because of the change, but Snap’s results indicated the blow may be even bigger than Wall Street anticipated. Facebook’s shares shed more than 4 percent in Thursday’s extending trading. The social networking company is scheduled to release its latest quarterly results on Monday.

Snap reported revenue of $1.07 billion for the July to September period, a 57 percent increase from the same time last year, but that was about $30 million below the projections of Wall Street analysts who steer investor expectations.

Perhaps even more troubling to investors, Snap predicted its revenue for the current quarter would range from $1.17 billion to $1.21 billion, whereas analysts had been forecasting revenue of $1.36 billion, according to FactSet.


Report: Advertising money on TV and social media is double daily consumption

Report: Advertising money on TV and social media is double daily consumption
Updated 22 October 2021

Report: Advertising money on TV and social media is double daily consumption

Report: Advertising money on TV and social media is double daily consumption
  • New report by WARC says social media spend would need to reduce by $94.3 billion to mirror global consumption levels next year

DUBAI: Advertiser spend on TV and social media is highly inflated in relation to daily consumption, according to a new WARC analysis of advertising spend forecasts for 100 markets worldwide and the results of a survey by GlobalWebIndex of more than 715,000 consumers.

“The study shines a light on divergences between media investment and consumption, two metrics which are rarely seen to be in lockstep with one another,” said James McDonald, managing editor, WARC Data, and author of the report.

The analysis finds that, as of the first quarter of 2021, social media attracts more investment from advertisers than linear TV for the first time— however, both media channels draw far more advertising budgets than the average consumer spends with these channels each day.

Social media, for example, is forecast to account for 39.1 percent of 2022 ad spend among the eight media studied in the report: Linear TV, online video, social media, print press, online press, podcasts, broadcast radio and online audio.

However, social media has a 21.4 percent share of daily media consumption— a discrepancy of 17.7 percentage points, which is valued at $94.3 billion.

Since Q2 2016, social media has accounted for more than two hours of daily media consumption and is expected to reach two and a half hours during the second half of next year.

Linear TV ad spend, on the other hand, is twice the daily consumption and is forecast to account for a 31.5 percent share of advertising spend next year, compared to a 16.1 percent share of daily media consumption. This would equate to an investment gap of $86.9 billion worldwide next year.

“The seemingly inflated investment gap actually speaks more to the enduring power of the medium — its vast reach combined with attentive audiences and the heightened impact of audiovisual creative. These traits allow it to command a premium in the media mix, one which is likely to sustain even as social media further grows its share of budgets,” McDonald said.

While linear TV spend is inflated in relation to its consumption, online video is now close to parity after years of underinvestment. It is worth noting that the world’s largest online video platform, Netflix, is predominantly ad-free, while platforms such as YouTube are prone to adblocking on desktop and mobile devices.

Still, advertisers are forecast to spend $71.9 billion on online video this year — a 13.6 percent share of the eight studied media, which compares to a 12.9 percent of media consumption.

The most heavily undervalued media channels are undeniably audio and online press. Podcasts are undervalued by a massive $40 billion. Even with one in three Internet users now listening to a podcast each month, the advertising rates are much higher than even TV, which is well known to be a premium medium with high advertising costs.

Online press also appears to be another heavy undervalued medium: Advertisers would need to spend $58 billion on online press ads globally next year to achieve parity with consumption levels. However, the forecast spend is only $12.8 billion.

Consumers already spend a fifth of their media day in social feeds and are forecast to spend twice as long with social media than with online press next year signaling a dire future for online press.

Print press investment is now on a par with daily consumption on a global level, but advertisers would need to spend $45.3 billion more on online press to mirror these levels. This has led to publishers diversifying their business models to counter the shortfall in advertising revenue with 76 percent of publishers prioritizing subscriptions this year.


Facebook’s oversight board seeks details on VIPs’ treatment

Facebook is generally not bound under the oversight board’s rules to follow its recommendations. (File/AFP)
Facebook is generally not bound under the oversight board’s rules to follow its recommendations. (File/AFP)
Updated 22 October 2021

Facebook’s oversight board seeks details on VIPs’ treatment

Facebook is generally not bound under the oversight board’s rules to follow its recommendations. (File/AFP)
  • Facebook's oversight board says the company has failed to fully disclose information on its VIP exemption rules
  • “XCheck,” or cross-check, is an internal system that exempts high-profile users from some or all of Facebook's content rules

WASHINGTON: Facebook’s semi-independent oversight board says the company has failed to fully disclose information on its internal system that exempts high-profile users from some or all of its content rules.
Facebook “has not been fully forthcoming” with the overseers about its “XCheck,” or cross-check, system the board said in a report Thursday. It also said it will review the system and recommend how the social network giant could change it.
The board started looking into the XCheck system last month after The Wall Street Journal reported that many VIP users abuse it, posting material that would cause ordinary users to be sanctioned — including for harassment and incitement of violence. For certain elite users, Facebook’s rules don’t seem to apply, according to the Journal article.
Facebook is generally not bound under the oversight board’s rules to follow its recommendations.
“We believe the board’s work has been impactful, which is why we asked the board for input into our cross-check system, and we will strive to be clearer in our explanations to them going forward,” Facebook said in a statement Thursday.
The report said Facebook wrongly failed to mention the XCheck system when it asked the board earlier this year to rule on its ban on former President Donald Trump’s accounts following the Jan. 6 assault on the Capitol.
“Facebook only mentioned cross-check to the board when we asked whether Mr. Trump’s page or account had been subject to ordinary content-moderation processes,” the report said.
In May, the board upheld Facebook’s suspension of Trump’s accounts, which came out of concern that he incited violence leading to the Jan. 6 riot. But the overseers told Facebook to specify how long the suspension would last. Facebook later announced that Trump’s accounts would be suspended for two years, freezing his presence on the social network until early 2023, to be followed by a reassessment.
The board said Thursday that for its review, Facebook agreed to provide the internal company documents on the XCheck system that were referenced in the Journal article. Facebook documents were leaked to the newspaper by Frances Haugen, a former product manager in the company’s civic integrity unit who also provided them to Congress and went public this month with a far-reaching condemnation of the company.
Haugen’s accusations of possible serious harm to some young people from Facebook’s Instagram photo-sharing platform raised outrage among lawmakers and the public.
The board said in its report that in some cases, “Facebook failed to provide relevant information to the board, while in other instances, the information it did provide was incomplete.”
In a briefing to the board, “Facebook admitted it should not have said that (XCheck) only applied to a ‘small number of decisions,’” the report said. “Facebook noted that for teams operating at the scale of millions of content decisions a day, the numbers involved ... seem relatively small, but recognized its phrasing could come across as misleading.”


Report: 71 percent of parents in Saudi Arabia use Snapchat

Report: 71 percent of parents in Saudi Arabia use Snapchat
Updated 21 October 2021

Report: 71 percent of parents in Saudi Arabia use Snapchat

Report: 71 percent of parents in Saudi Arabia use Snapchat
  • New study by Kantar and Snap reveals that Snapchat is popular among both parents and younger people
  • Snapchat plays major role in advertising, marketing for older audiences

DUBAI: Snapchat, which has a monthly addressable reach of 19.5 million in Saudi Arabia, is not only popular with younger audiences in the Kingdom, but also with parents, according to a recent study conducted by Kantar and Snap.

The study has found that 71 percent of parents in Saudi Arabia now use Snapchat and that advertising on the platform plays an influential role in their purchase decisions. 

Among these parents, almost 90 percent feel positive about the advertising they see on Snapchat across product categories, and over 80 percent said that this advertising influences their purchase decisions.

More than 90 percent take action after seeing an ad that interests them. The actions include clicking on an ad, reading product reviews online, or discussing with friends and family members.

Snapchat parents are also quite democratic in including other family members when making purchasing decisions. A majority (68 percent) of Snapchat parents claim that their children influence their purchase decisions in some way, and most parents with teenage or adult children rely on their kids to make purchases on behalf of the household.

Parents with teenage children allow the teens to shop for the family regularly for technology products (61 percent), mobile apps and streaming services (73 percent), and household goods (47 percent).

“Rather than a fragmented advertising model that caters to different age groups through different mediums, Snapchat delivers great value by reaching parents, alongside their teenage and adult children, on a single platform,” said Abdulla Alhammadi, regional business lead at Snap Inc.           

FAST FACTS

• 71 percent of parents in Saudi Arabia are on Snapchat.

• Over 80 percent of parents on Snapchat say that advertising on the platform influences their purchase decisions.

• Almost 90 percent of parents on Snapchat feel positive about the advertising that they see.

• More than 90 percent of parents on Snapchat take action after seeing an ad that interests them.

• Parents with teenage children allow the teens to shop for the family regularly for technology products (61 percent), mobile apps and streaming services (73 percent), and household goods (47 percent).


Senator asks Facebook CEO to testify on Instagram and kids

Senator asks Facebook CEO to testify on Instagram and kids
Updated 22 October 2021

Senator asks Facebook CEO to testify on Instagram and kids

Senator asks Facebook CEO to testify on Instagram and kids
  • US senator asks Facebook CEO Mark Zuckerberg to testify on Instagram’s effects on children
  • The Federal Trade Commission has also filed a major antitrust lawsuit against Facebook

WASHINGTON: The senator leading a probe of Facebook’s Instagram and its impact on young people is asking Facebook CEO Mark Zuckerberg to testify before the panel that has heard far-reaching criticisms from a former employee of the company.
Sen. Richard Blumenthal, D-Connecticut, who heads the Senate Commerce subcommittee on consumer protection, called in a sharply worded letter Wednesday for the Facebook founder to testify on Instagram’s effects on children.
“Parents across America are deeply disturbed by ongoing reports that Facebook knows that Instagram can cause destructive and lasting harms to many teens and children, especially to their mental health and wellbeing,” Blumenthal said in the letter addressed to Zuckerberg. “Those parents, and the twenty million teens that use your app, have a right to know the truth about the safety of Instagram.”
In the wake of former Facebook product manager Frances Haugen’s testimony early this month, Blumenthal told Zuckerberg, “Facebook representatives, including yourself, have doubled down on evasive answers, keeping hidden several reports on teen health, offering noncommittal and vague plans for action at an unspecified time down the road, and even turning to personal attacks on Ms. Haugen.”
Blumenthal did offer, however, that either Zuckerberg or the head of Instagram, Adam Mosseri, could appear before his committee.
“It is urgent and necessary for you or Mr. Adam Mosseri to testify to set the record straight and provide members of Congress and parents with a plan on how you are going to protect our kids,” he told Zuckerberg.
A spokesman for Facebook, based in Menlo Park, California, confirmed receipt of Blumenthal’s letter but declined any comment.
As public discomfort and scrutiny of the social network giant has grown in recent weeks, the focus has homed in on Zuckerberg, who controls more than 50 percent of Facebook’s voting shares.
Haugen, who buttressed her statements with tens of thousands of pages of internal research documents she secretly copied before leaving her job in the company’s civic integrity unit, accused Facebook of prioritizing profit over safety and being dishonest in its public fight against hate and misinformation.
“In the end, the buck stops with Mark,” Haugen said in her testimony. “There is no one currently holding Mark accountable but himself.”
On Tuesday, the attorney general of the District of Columbia added Zuckerberg as a defendant in a 2018 lawsuit he filed against Facebook on the privacy of users’ personal data. The action by Attorney General Karl Racine seeks to hold Zuckerberg personally liable in addition to Facebook in the case involving data-mining firm Cambridge Analytica, which gathered details on as many as 87 million Facebook users without their permission.
The Facebook users’ data is alleged to have been used to manipulate the 2016 presidential election.
“These allegations are as meritless today as they were more than three years ago, when the District filed its complaint. We will continue to defend ourselves vigorously and focus on the facts,” Facebook spokesman Andy Stone said.
Racine’s office said it was the first time a US regulator specifically named Zuckerberg in a legal action. He and the company could face millions of dollars in penalties if violations of law were found.
The Federal Trade Commission has filed a major antitrust lawsuit against Facebook, and various state attorneys general also have taken legal action against the company.
“Based on the evidence we gathered in this case over the past two years ... it’s clear Mr. Zuckerberg knowingly and actively participated in each decision that led to Cambridge Analytica’s mass collection of Facebook user data, and Facebook’s misrepresentations to users about how secure their data was,” Racine said in a statement. “The evidence further demonstrates that Mr. Zuckerberg also participated in misleading the public and government officials about Facebook’s role.”