Source Code: Your daily look at what matters in tech.

source-codesource codeauthorIssie LapowskyNoneWant your finger on the pulse of everything that's happening in tech? Sign up to get David Pierce's daily newsletter.64fd3cbe9f
×

Get access to Protocol

Your information will be used in accordance with our Privacy Policy

I’m already a subscriber
Power

Big tech’s ad rules leave plenty of room for dark money to hide

A new report shows that despite efforts by Facebook and Google to self-regulate, it's still a challenge to follow the money.

An image of Bernie Sanders

Bernie Sanders has been targeted by dark money groups in political ads on Facebook, but it's hard to account for all the spending.

Photo: Berniesanders.com via Getty Images

The ads began appearing on Facebook in English and Spanish in the run-up to Super Tuesday. "Bernie Sanders pushed for nuclear waste dumps at Sierra Blanca that threatened Latino communities. All while he was profiting off of it," the ads read.

They targeted people in states like California and Texas where voters would soon cast ballots in the Democratic presidential primary, and the ads were sponsored by a group called Big Tent Project. The Facebook page for the group was created in mid-February, and by March 10, it had spent $164,673 on anti-Sanders Facebook ads.

But those ads constituted a small sliver of the more than $4 million in anti-Sanders digital ads Big Tent Project told the U.S. Federal Election Commission it bought before Super Tuesday. So, where did the rest of that money go? It's impossible to say.

Nearly four years after the U.S. presidential election exposed how little Americans know about who's behind the political ads they see online, these ads remain almost completely unregulated. Facebook and Google have built massive ad archives that show who's targeting their users with political messages and how. Given that they account for more than 75 percent of political digital ad spending, that's a start. But those efforts are voluntary on the part of the companies, their requirements vary, and they reveal nothing about the ads appearing off their platforms.

This issue is the subject of a new report by the Campaign Legal Center, a Washington DC-based non-profit that advocates for government accountability. The report analyzes the difference between the amount of digital advertising that dark money groups like the Big Tent Project have reported to the FEC and the amount that appears in the few online ad archives that tech companies have created. The authors found that the vast majority of that money remains unaccounted for. This, they argue, suggests that despite tech giants' best attempts at self-regulation and transparency, plenty of loopholes remain, allowing political advertisers to hide their tracks.

"These organizations by design are trying to keep the public in the dark about the true sources of their funding, but it's also clear they're placing their digital ads in a manner that keeps the public in the dark about the content of many of the ads they're running online," said the Campaign Legal Center's director of federal reform, Brendan Fischer, who co-authored the report with senior researcher Maggie Christ.



Protocol Cloud, your weekly guide to the future of enterprise computing. Sign up now.



"There's every reason to expect we'll see similar patterns emerge as the 2020 campaign proceeds," Fischer said.

The Big Tent Project didn't respond to Protocol's request for comment.

The group was formed by West Virginia senator Joe Manchin's former communications director Jonathan Kott, and quickly became one of the top outside spending groups focused on the federal election. But the lack of transparency about the content and placement of its online ads is hardly unique. Unlike TV and radio, online companies are under no legal or regulatory obligation to keep a record of the political ads they run. And 501(c)(4) groups like Big Tent Project are only required to report their digital ad spending to the FEC for ads that expressly advocate voting for or against a specific candidate. Simply mentioning a candidate's name and targeting voters with an online ad before an election isn't enough to warrant a disclosure to the FEC. But it would be if the same ad ran on TV.

For years, lawmakers have tried to pass laws to modernize these rules, including one piece of legislation called the Honest Ads Act. But those efforts have gone nowhere, leaving it to tech companies to implement their own disclosure policies. That's created a patchwork system where Facebook's ad archive includes different information than, say, Google's or Snap's, while streaming services and platforms that sell programmatic ads share no information whatsoever.

"Whatever Facebook and Google do only applies to Facebook and Google," Fischer said. "It doesn't do anything to strengthen transparency on a platform like Hulu or Pandora, which both host a significant number of political ads."

Even the disclosures that do appear on Facebook and Google don't always tell the full story. In their research, Fischer and Christ stumbled across another group called United We Succeed, which describes itself as "a campaign in partnership with the Big Tent Project Fund." That group also purchased nearly $72,000 in anti-Sanders ads on Facebook, bearing similar messages about Sanders pushing for nuclear waste dumps. But the disclaimers on the ads, which read "Paid for by United We Succeed," give no indication of a connection to Big Tent Project Fund. The two entities list separate addresses and phone numbers and are categorized in Facebook's ad library as if they were purchased by two different entities entirely. Only the About section on the Facebook page for United We Succeed says anything about its affiliation to Big Tent Project Fund. (A woman who answered the phone at the number listed for United We Succeed hung up when contacted by Protocol.)

"It's not that Big Tent Project was entirely disguising its connection to United We Succeed, but it did take a fair amount of poking around to sort out these were the same group," Fischer said. What's more, because United We Succeed's ads don't specifically call on people to vote one way or another, United We Succeed doesn't appear in FEC records.

A Facebook spokesperson said that since United We Succeed lists its website and notes its affiliation to Big Tent Project on its Facebook page, that's sufficient disclosure. "Our authorization process in the United States is extensive, and we offer more transparency into political and issue advertising than TV, radio or any other digital ad platform," the spokesperson said. "Still, disclosure requirements are an area where we invite additional guidance and regulation from governments."

It's important to note that not all of the money that 501(c)(4) groups report to the FEC necessarily goes toward actually buying ads. Fischer and Christ note that some of the money covers the cost of creative agencies' commission fees and other overhead. That could help explain some of the spending discrepancies they found in their research on another group called Fellow Americans.

In its FEC filings, that group reported spending around $140,000 on anti-Trump ads this cycle, but only about $6,000 of it was visible in Facebook and Google's online ad archives. In the FEC reports, these payments were made to a company called Incite Studio, which is located at an address that New York state tax records show is associated with Nathaniel Lubin, former White House digital director under President Obama.

Lubin told Protocol that there are no ads that are unaccounted for and that the only ads Fellow Americans has bought are the ones in the Facebook and Google ad archives. He attributed the discrepancy between those reports and the FEC data to the fact that Fellow Americans both creates ad content and conducts tests to see how well they perform on behalf of other progressive groups like the Democratic Super PAC Priorities USA. As Fischer and Christ note in their report, Priorities did pick up on Fellow Americans' ads about President Trump's coronavirus response after Fellow Americans ran a small test.

"We are working with a network of progressive groups to test and share the results of ads that we're creating, including that ad," Lubin said. He conducted similar experiments on digital content in the lead up to the 2018 midterm elections.

While it's possible that smaller spending discrepancies can be explained this way, experts say that wouldn't explain a multi-million dollar difference, like the one the researchers found in Big Tent Project's reports. "It's pretty unlikely. That would be an all-time rip off job," said Jason Rosenbaum, vice president of the public affairs firm SKDKnickerbocker's digital arm. Rosenbaum was Hillary Clinton's director of digital advertising in 2016, and led Google's election and advocacy work before that.



Get in touch with us: Share information securely with Protocol via encrypted Signal or WhatsApp message, at 415-214-4715 or through our anonymous SecureDrop.




Wherever the money went, Rosenbaum said the system shouldn't force people to guess. "We have no idea where that money's going," he said. "The only funds that are accounted for are on the platforms that have chosen or were forced to self-regulate."

Lubin agrees. "Because Google and Facebook have created their own databases in lieu of the FEC doing it, we see gaps in the reporting that create misunderstanding and difficulty in understanding what is being done and why, in a context where those buys are only part of a larger strategy," he said.

Fischer, Christ, Rosenbaum and Lubin all say it's up to Congress to change the laws that govern platforms running political ads. But attempts to do that have, so far, been unsuccessful. After all, if there's anyone who stands to benefit from dark money groups' ability to stay in the dark, it's the people those groups help get elected.

Protocol | Workplace

In Silicon Valley, it’s February 2020 all over again

"We'll reopen when it's right, but right now the world is changing too much."

Tech companies are handling the delta variant in differing ways.

Photo: alvarez/Getty Images

It's still 2021, right? Because frankly, it's starting to feel like March 2020 all over again.

Google, Apple, Uber and Lyft have now all told employees they won't have to come back to the office before October as COVID-19 case counts continue to tick back up. Facebook, Google and Uber are now requiring workers to get vaccinated before coming to the office, and Twitter — also requiring vaccines — went so far as to shut down its reopened offices on Wednesday, and put future office reopenings on hold.

Keep Reading Show less
Allison Levitsky
Allison Levitsky is a reporter at Protocol covering workplace issues in tech. She previously covered big tech companies and the tech workforce for the Silicon Valley Business Journal. Allison grew up in the Bay Area and graduated from UC Berkeley.

After a year and a half of living and working through a pandemic, it's no surprise that employees are sending out stress signals at record rates. According to a 2021 study by Indeed, 52% of employees today say they feel burnt out. Over half of employees report working longer hours, and a quarter say they're unable to unplug from work.

The continued swell of reported burnout is a concerning trend for employers everywhere. Not only does it harm mental health and well-being, but it can also impact absenteeism, employee retention and — between the drain on morale and high turnover — your company culture.

Crisis management is one thing, but how do you permanently lower the temperature so your teams can recover sustainably? Companies around the world are now taking larger steps to curb burnout, with industry leaders like LinkedIn, Hootsuite and Bumble shutting down their offices for a full week to allow all employees extra time off. The CEO of Okta, worried about burnout, asked all employees to email him their vacation plans in 2021.

Keep Reading Show less
Stella Garber
Stella Garber is Trello's Head of Marketing. Stella has led Marketing at Trello for the last seven years from early stage startup all the way through its acquisition by Atlassian in 2017 and beyond. Stella was an early champion of remote work, having led remote teams for the last decade plus.
Protocol | China

Livestreaming ecommerce next battleground for China’s nationalists

Vendors for Nike and even Chinese brands were harassed for not donating enough to Henan.

Nationalists were trolling in the comment sections of livestream sessions selling products by Li-Ning, Adidas and other brands.

Collage: Weibo, Bilibili

The No. 1 rule of sales: Don't praise your competitor's product. Rule No. 2: When you are put to a loyalty test by nationalist trolls, forget the first rule.

While China continues to respond to the catastrophic flooding that has killed 99 and displaced 1.4 million people in the central province of Henan, a large group of trolls was busy doing something else: harassing ordinary sportswear sellers on China's livestream ecommerce platforms. Why? Because they determined that the brands being sold had donated too little, or too late, to the people impacted by floods.

Keep Reading Show less
Zeyi Yang
Zeyi Yang is a reporter with Protocol | China. Previously, he worked as a reporting fellow for the digital magazine Rest of World, covering the intersection of technology and culture in China and neighboring countries. He has also contributed to the South China Morning Post, Nikkei Asia, Columbia Journalism Review, among other publications. In his spare time, Zeyi co-founded a Mandarin podcast that tells LGBTQ stories in China. He has been playing Pokemon for 14 years and has a weird favorite pick.
Power

The video game industry is bracing for its Netflix and Spotify moment

Subscription gaming promises to upend gaming. The jury's out on whether that's a good thing.

It's not clear what might fall through the cracks if most of the biggest game studios transition away from selling individual games and instead embrace a mix of free-to-play and subscription bundling.

Image: Christopher T. Fong/Protocol

Subscription services are coming for the game industry, and the shift could shake up the largest and most lucrative entertainment sector in the world. These services started as small, closed offerings typically available on only a handful of hardware platforms. Now, they're expanding to mobile phones and smart TVs, and promising to radically change the economics of how games are funded, developed and distributed.

Of the biggest companies in gaming today, Amazon, Apple, Electronic Arts, Google, Microsoft, Nintendo, Nvidia, Sony and Ubisoft all operate some form of game subscription. Far and away the most ambitious of them is Microsoft's Xbox Game Pass, featuring more than 100 games for $9.99 a month and including even brand-new titles the day they release. As of January, Game Pass had more than 18 million subscribers, and Microsoft's aggressive investment in a subscription future has become a catalyst for an industrywide reckoning on the likelihood and viability of such a model becoming standard.

Keep Reading Show less
Nick Statt
Nick Statt is Protocol's video game reporter. Prior to joining Protocol, he was news editor at The Verge covering the gaming industry, mobile apps and antitrust out of San Francisco, in addition to managing coverage of Silicon Valley tech giants and startups. He now resides in Rochester, New York, home of the garbage plate and, completely coincidentally, the World Video Game Hall of Fame. He can be reached at nstatt@protocol.com.
Protocol | Policy

Lina Khan wants to hear from you

The new FTC chair is trying to get herself, and the sometimes timid tech-regulating agency she oversees, up to speed while she still can.

Lina Khan is trying to push the FTC to corral tech companies

Photo: Graeme Jennings/AFP via Getty Images

"When you're in D.C., it's very easy to lose connection with the very real issues that people are facing," said Lina Khan, the FTC's new chair.

Khan made her debut as chair before the press on Wednesday, showing up to a media event carrying an old maroon book from the agency's library and calling herself a "huge nerd" on FTC history. She launched into explaining how much she enjoys the open commission meetings she's pioneered since taking over in June. That's especially true of the marathon public comment sessions that have wrapped up each of the two meetings so far.

Keep Reading Show less
Ben Brody

Ben Brody (@ BenBrodyDC) is a senior reporter at Protocol focusing on how Congress, courts and agencies affect the online world we live in. He formerly covered tech policy and lobbying (including antitrust, Section 230 and privacy) at Bloomberg News, where he previously reported on the influence industry, government ethics and the 2016 presidential election. Before that, Ben covered business news at CNNMoney and AdAge, and all manner of stories in and around New York. He still loves appearing on the New York news radio he grew up with.

Latest Stories