Facebook sharpens political ad rules ahead of 2020

As political ad spending for 2020 ramps up, Facebook is tightening its rules to make sure that groups running political or issue ads are legitimate and aren't gaming the system.

Why it matters: With some high-profile examples of such evasion already emerging, the changes will make it harder for groups to dodge Facebook's political advertising review program.

Details: Facebook will require advertisers to supply more information about their organization, like their U.S. street address, phone number, business email and a business website matching the email, before Facebook reviews and approves their political advertising disclaimer. That information will become part of Facebook's public ad library.

• In addition, advertisers must provide a Tax ID number, Federal Election Commission (FEC) ID number, or a government website domain that matches an email ending in .gov or .mil, if they want to be labeled as a "Confirmed Organization."
• Smaller businesses without those credentials can also choose to provide an organization with a verifiable phone number, business email, mail-deliverable address, and a business website with a domain that matches the email or the legal name and and a personal ID of an individual who is buying ads for a Facebook Page.
• Groups that do not meet the standards by mid-October will have their ads blocked until they comply.
• Facebook will also update its list of acceptable social issues that advertisers can message about, bringing the U.S. list in line with issue lists in countries that have recently held elections.

Yes, but: So much money has already been spent on Facebook ads this presidential cycle that it's almost impossible to know how much money may have already been spent on ads with hidden purchasers.

• Case in point: Just this week Facebook banned ads from conservative news outlet The Epoch Times, after NBC News reported that in the last month the company had funneled its Facebook ads through other dummy sites to hide their connection to its $2 million pro-Trump campaign.
• By the numbers: Experts estimate that well over $1 billion will be spent on digital ads this campaign cycle, with the majority going to Facebook and Google. For context, that's about as much as analysts expect to be spent on local cable television ads this cycle.
• So far this year, the top 8 2020 contenders by Facebook ad spend — Donald Trump, Tom Steyer, Kirsten Gillibrand, Bernie Sanders, Elizabeth Warren, Joe Biden, Pete Buttigieg and Kamala Harris — have collectively spent over $25 million on Facebook ads, according to data from Bully Pulpit Interactive.
• The top 7 outside issue groups have collectively spent over $17 million this year.

The big picture: Facebook has become one of the most important marketing vehicles used in U.S. elections, but there are no laws that govern how online advertising should be bought or tracked. This means that federal election officials, lawmakers and the public have to rely on Facebook and other tech companies to police their own ads.

Our thought bubble: These requirements are a positive step towards transparency online. Since 2016, Facebook has taken the lead in building out a political advertising library. Its efforts requiring more scrutiny will likely be mimicked by other companies.

Be smart: Even though there are no legal requirements around online political advertising in the U.S., political ads on TV are regulated. But those requirements still leave room for organizations to hide their funding source.

• For example, just this week Bloomberg reported that a mystery group has poured $13 million into ads about health care bills. This is par for the course in broadcast advertising, which is regulated by the Federal Communications Commission.

What's next: Over the coming months, Facebook says it will make more enhancements to its ad library and will expand its policy to prohibit ads that expressly discourage people in the U.S. from voting.