Oct 18, 2018

Axios Login

By Ina Fried
Ina Fried

Huh. Facebook's in the news again...

1 big thing: Facebook's pre-election D.C. charm campaign

Photo: Facebook

As the midterm elections approach, Facebook has stepped up its efforts to assure a wary Washington, D.C., that it can protect the elections, Axios' David McCabe reports.

Why it matters: The outreach that Facebook detailed to Axios is part of a broader push by the company to convince policymakers, the media and the public that it won’t allow a recurrence of the kind of election meddling that occurred in 2016 and is still under investigation today.


  • The company held briefings for House and Senate staff members at the end of September, it said. A spokesperson added that it had met one-on-one with  “hundreds of Congressional offices to discuss election integrity and ads transparency.”
  • It also distributed a 6-page handout on its efforts to offices on Capitol Hill, detailing work like its crackdown on fake accounts, the hiring of additional security staffers, and the effort to limit the reach of false news stories — steps that are also outlined on the site Facebook uses to interface with political figures.
  • Multiple sections include the header “Facebook is taking action.”

Yes, but: Facebook's offensive comes as the company is still struggling to live up to its ideals. The New York Times' Kevin Roose revealed a flaw in Facebook's system: Those who had been verified to do political advertisements could put basically anything in the "paid for" field. What's worse, the flaw was exploited, including in a competitive House race in Virginia, NYT reported.

The issue of election security was on the agenda at 4 events the social giant held at its downtown Washington office over the past 2 months for the Senate press secretaries, congressional staff members, political operatives and outside groups.

  • Facebook also was involved with webinars for campaign staff on both sides of the aisle.

The social giant is working with officials outside Washington, as well. Announcing new policies on content aimed at suppressing voter turnout this month, it said it had “set up dedicated reporting channels for state election authorities.”

The big picture: The behind-the-scenes action mirrors a more public push to present the company as prepared for the coming elections. Reporters were invited this week to tour the company’s election “war room” at its Menlo Park, Calif., headquarters and executives have spoken publicly about the effort.

  • CEO Mark Zuckerberg penned a note in early September that argued the company was “better prepared” for misinformation campaigns of the kind Russian operatives used in the run-up to the 2016 election.
  • Facebook has also announced the removal of tranches of fake accounts it believes are engaged in coordinated activity, sometimes linked to politics.
  • So far this year, Facebook’s has spent almost $7 million on its federal lobbying operation.

The bottom line: The California social network has told its critics it can handle attempts to subvert the midterms. The ultimate proof, however, will be in the coming weeks, on Election Night and afterwards, when experts say there’s a risk of misinformation campaigns aimed at undermining the results.

2. The ad industry trust crisis

Illustration: Rebecca Zisser/Axios

The $220 billion U.S. advertising industry is facing an unprecedented wave of scandal and controversy, causing frustration amongst marketers, consumers and lawmakers, Axios' Sara Fischer reports.

Why it matters: Advertising was supposed to become more transparent in the digital era, but instead it's gotten murkier, leading to more fraud, shady business practices, discrimination and even national security issues.

Background: The advertising industry is loosely regulated by the FTC and FCC.

  • But regulators have struggled to enforce the broad "don't be deceptive" standard with digital marketing. This is particularly true with automated marketing, which has dramatically increased the number of advertisers and ads that are active.

A lack of government oversight in digital has largely left firms that sell ad space to be accountable for their services. But recent examples show that those companies don't always have the capacity to manage their own technology, and it's hard for marketers to prove that an apparent mistake on the part of a platform is actually a violation of the law.

  • On the tech side, Facebook, one of the world's largest ad companies, is facing a lawsuit for failing to disclose for more than a year a key error in how it measured video ad viewership. It's the latest in a long string of similar measurement fiascos for Facebook (and other Big Tech platforms), particularly around video.
  • On the publishing side, Newsweek has faced a year-long ad fraud probe, per WSJ.
  • On the agency side, many of the biggest holding groups are facing federal investigations over faulty ad practices, like bid-rigging and kickbacks.

As a result, everyone is losing trust in the ad industry. Roughly a quarter of U.S. internet users have ad blockers, per eMarketer. Multiple studies indicate that consumers find digital advertising to largely be a disruptive experience.

The industry is trying hard to win back trust from marketers, who are beginning to pull spending from digital platforms. On Wednesday, the CEOs of several major ad exchanges signed a letter pledging to take steps to increase quality assurance and transparency.

Go deeper: Read Sara's full story.

3. IBM's $240 million deal with Lenovo

IBM and Lenovo are announcing a deal today in which the Chinese electronics firm will use a variety of services from Big Blue to help aid its customer service efforts.

Why it matters: Once a hardware giant, IBM’s business today is mostly about technology services, like those it's providing to Lenovo. IBM and Lenovo have been frequent partners in the past, with IBM having sold both its PC and x86 server businesses to the Chinese tech firm.

4. Andy Rubin's Essential cuts 30% of staff

Photo: Essential

Essential, the consumer electronics startup run by Android co-founder Andy Rubin, has cut 30% of staff amid product cancellations and slow sales of its initial smartphone.

The bottom line: Essential's struggles show just how brutally competitive the phone business is, even for one of the industry's pioneers. The company said in a statement that the move to cut staff has been a difficult one:

We are very sorry for the impact on our colleagues who are leaving the company and are doing everything we can to help them with their future careers. We are confident that our sharpened product focus will help us deliver a truly game-changing consumer product.
5. Take Note

On Tap

Trading Places

  • Former Facebook executive Chris Kelly, who already served as the main investor and chairman of indie film streaming service Fandor, will now be its CEO. Fandor has also hired ad industry exec John Zamoiski as chief marketing officer. (Variety)


6. After you Login

A Chinese city plans to launch an artificial moon into space in 2020 to act as a sort of municipal night light.

Ina Fried