FB has said that it will lose money on political ads this cycle, which means that enforcing stricter rules and hiring additional reviewers is going to cost *more than $256 million*, somehow.https://twitter.com/David_Ingram/status/1054787689243766784 …
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Replying to @kevinroose
Unless they penalize political ads in the auction, then winning political ads are displacing other ads that would be shown and would not have incurred those costs.
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Replying to @deaneckles @kevinroose
I'd be surprised if they're not now (or some day soon) applying a haircut to political ad bids in the auction, to raise their net clearing price, and pay for the compliance cost. Net, politicians will pay more for ads, and the fraction of campaign budgets going to FB will rise.
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Replying to @antoniogm @kevinroose
More likely implicit via action rates given negative coefficients (eg reporting ad)
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Replying to @deaneckles @kevinroose
That assumes the reporting penalty and its resulting economic cost to the advertiser in the auction mirrors the compliance cost to FB, no?
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Replying to @antoniogm @kevinroose
Didn't mean to suggest it would. Facebook may also want to avoid regulation demanding they run ads by candidates for federal offices.
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The thought of bailing on the politics vertical must be tempting now. I suspect part of why they keep an unprofitable business going is the leverage it gives them over politicians and regulators. How much are you going to regulate the ads business that put you in power?
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