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Twitter: Why Banning Political Ads is a Bad Idea

Jack Dorsey's strange decision may not achieve the goals he desires Continue reading... Read More...
<p class="canvas-atom canvas-text Mb(1.0em) Mb(0)–sm Mt(0.8em)–sm" type="text" content="On Oct. 30, Twitter Inc. (NYSE:TWTR) CEO Jack Dorsey announced ” data-reactid=”11″>On Oct. 30, Twitter Inc. (NYSE:TWTR) CEO Jack Dorsey announced

<p class="canvas-atom canvas-text Mb(1.0em) Mb(0)–sm Mt(0.8em)–sm" type="text" content="that his company would no longer sell political advertisements:” data-reactid=”12″>that his company would no longer sell political advertisements:

We’ve made the decision to stop all political advertising on Twitter globally. We believe political message reach should be earned, not bought. Why? A few reasons. A political message earns reach when people decide to follow an account or retweet. Paying for reach removes that decision, forcing highly optimized and targeted political messages on people. We believe this decision should not be compromised by money. While internet advertising is incredibly powerful and very effective for commercial advertisers, that power brings significant risks to politics, where it can be used to influence votes to affect the lives of millions.

<p class="canvas-atom canvas-text Mb(1.0em) Mb(0)–sm Mt(0.8em)–sm" type="text" content="The move sent ripples across financial markets and financial media alike.” data-reactid=”22″>The move sent ripples across financial markets and financial media alike.

<p class="canvas-atom canvas-text Mb(1.0em) Mb(0)–sm Mt(0.8em)–sm" type="text" content="Dorsey takes a stand” data-reactid=”23″>Dorsey takes a stand

<p class="canvas-atom canvas-text Mb(1.0em) Mb(0)–sm Mt(0.8em)–sm" type="text" content="Though Facebook Inc. (NASDAQ:FB) has suffered the brunt of public and political scrutiny concerning the spread of misinformation, disinformation and manipulative reporting on the internet, all social media platforms have been feeling the heat of late. According to Dorsey, the only fair thing for Twitter to do is to remove paid political advertising from its ecosystem entirely:” data-reactid=”24″>Though Facebook Inc. (NASDAQ:FB) has suffered the brunt of public and political scrutiny concerning the spread of misinformation, disinformation and manipulative reporting on the internet, all social media platforms have been feeling the heat of late. According to Dorsey, the only fair thing for Twitter to do is to remove paid political advertising from its ecosystem entirely:

Internet political ads present entirely new challenges to civic discourse: machine learning-based optimization of messaging and micro-targeting, unchecked misleading information, and deep fakes. All at increasing velocity, sophistication, and overwhelming scale. These challenges will affect ALL internet communication, not just political ads. Best to focus our efforts on the root problems, without the additional burden and complexity taking money brings. Trying to fix both means fixing neither well, and harms our credibility. We considered stopping only candidate ads, but issue ads present a way to circumvent. Additionally, it isn’t fair for everyone but candidates to buy ads for issues they want to push. So we’re stopping these too. We’re well aware we’re a small part of a much larger political advertising ecosystem. Some might argue our actions today could favor incumbents. But we have witnessed many social movements reach massive scale without any political advertising. I trust this will only grow.

<p class="canvas-atom canvas-text Mb(1.0em) Mb(0)–sm Mt(0.8em)–sm" type="text" content="Twitter’s decision to eliminate political advertising from its platform is meant to address the rising tide of disinformation and questionable advertising that has emerged in recent election cycles. The sheer pace of technological change and improvement has further complicated matters for social media platforms. Contending with deep-fakes and other deliberately false advertising schemes will become increasingly difficult for companies to manage effectively. Hence, Dorsey has decided to cede the field until better regulations are put into place:” data-reactid=”28″>Twitter’s decision to eliminate political advertising from its platform is meant to address the rising tide of disinformation and questionable advertising that has emerged in recent election cycles. The sheer pace of technological change and improvement has further complicated matters for social media platforms. Contending with deep-fakes and other deliberately false advertising schemes will become increasingly difficult for companies to manage effectively. Hence, Dorsey has decided to cede the field until better regulations are put into place:

We need more forward-looking political ad regulation (very difficult to do). Ad transparency requirements are progress, but not enough. The internet provides entirely new capabilities, and regulators need to think past the present day to ensure a level playing field…This isn’t about free expression. This is about paying for reach. And paying to increase the reach of political speech has significant ramifications that today’s democratic infrastructure may not be prepared to handle. It’s worth stepping back in order to address.

<p class="canvas-atom canvas-text Mb(1.0em) Mb(0)–sm Mt(0.8em)–sm" type="text" content="Unintentional results” data-reactid=”32″>Unintentional results

<p class="canvas-atom canvas-text Mb(1.0em) Mb(0)–sm Mt(0.8em)–sm" type="text" content="While securing election integrity – and the quality of political information reaching individuals – is a laudable goal, it is far from clear that banning all political advertisements from a social media platform like Twitter would actually help to make things better. Indeed, social media platforms have been found to be very effective in increasing the number of voices being heard.” data-reactid=”33″>While securing election integrity – and the quality of political information reaching individuals – is a laudable goal, it is far from clear that banning all political advertisements from a social media platform like Twitter would actually help to make things better. Indeed, social media platforms have been found to be very effective in increasing the number of voices being heard.

<p class="canvas-atom canvas-text Mb(1.0em) Mb(0)–sm Mt(0.8em)–sm" type="text" content="Facebook, for example, has opened the political advertising landscape for more candidates and action groups to voice their views, and to use more cost-effective and granular targeting, according to a new working paper by Stanford political economist Greg Martin:” data-reactid=”34″>Facebook, for example, has opened the political advertising landscape for more candidates and action groups to voice their views, and to use more cost-effective and granular targeting, according to a new working paper by Stanford political economist Greg Martin:

The relatively low cost of creating and deploying online advertisements and the ability to target online advertisements more precisely may broaden the set of candidates who advertise and allow candidates to craft messages to more narrow audiences than on television. Drawing on data from the newly-released Facebook Ad Library API and television data from the Wesleyan Media Project, we find that a much broader set of candidates advertise on Facebook than television, particularly in down-ballot races. We then examine within-candidate variation in the strategic use and content of advertising on television relative to Facebook for all federal, gubernatorial, and state legislative candidates in the 2018 election. Among candidates who use both advertising media, Facebook advertising occurs earlier in the campaign, is less negative, less issue focused, and more partisan than television advertising.

<p class="canvas-atom canvas-text Mb(1.0em) Mb(0)–sm Mt(0.8em)–sm" type="text" content="Martin took to Twitter to further explain the findings of his team’s working paper:” data-reactid=”42″>Martin took to Twitter to further explain the findings of his team’s working paper:

Some aggregate patterns: TV still dominates in dollars / impressions terms, by a ratio of about 10:1. But Facebook massively expands the number of candidates who do any advertising, particularly down-ballot. We also run a number of regressions with candidate (or candidate-week) FE to compare within candidate messaging on TV versus FB. The same candidate’s Facebook advertising on average 1) is less negative 2) contains less issue content and 3) is more partisan than their TV ads.

<p class="canvas-atom canvas-text Mb(1.0em) Mb(0)–sm Mt(0.8em)–sm" type="text" content="Dorsey acknowledged that eliminating political ads might improve incumbents’ positions, but then obfuscated the issue by suggesting that any paid reach – especially reach powered by machine-learning and other sophisticated targeting on social media platforms – is somehow illegitimate. This line of reasoning makes little sense, since all advertising is fundamentally competitive.” data-reactid=”46″>Dorsey acknowledged that eliminating political ads might improve incumbents’ positions, but then obfuscated the issue by suggesting that any paid reach – especially reach powered by machine-learning and other sophisticated targeting on social media platforms – is somehow illegitimate. This line of reasoning makes little sense, since all advertising is fundamentally competitive.

<p class="canvas-atom canvas-text Mb(1.0em) Mb(0)–sm Mt(0.8em)–sm" type="text" content="A case of flawed reasoning” data-reactid=”47″>A case of flawed reasoning

<p class="canvas-atom canvas-text Mb(1.0em) Mb(0)–sm Mt(0.8em)–sm" type="text" content="Eliminating social media as a channel for political advertising will – virtually of necessity – crowd out smaller and less well-heeled voices. That can hardly be said to be a good thing for the widening of political discourse or the free marketplace of ideas.” data-reactid=”48″>Eliminating social media as a channel for political advertising will – virtually of necessity – crowd out smaller and less well-heeled voices. That can hardly be said to be a good thing for the widening of political discourse or the free marketplace of ideas.

<p class="canvas-atom canvas-text Mb(1.0em) Mb(0)–sm Mt(0.8em)–sm" type="text" content="Twitter’s decision to back away from political advertising may end up setting an example that other platforms could follow. However, they would be doing so for little social good – and at considerable economic cost.” data-reactid=”49″>Twitter’s decision to back away from political advertising may end up setting an example that other platforms could follow. However, they would be doing so for little social good – and at considerable economic cost.

<p class="canvas-atom canvas-text Mb(1.0em) Mb(0)–sm Mt(0.8em)–sm" type="text" content="Disclosure: No positions.” data-reactid=”50″>Disclosure: No positions.

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<p class="canvas-atom canvas-text Mb(1.0em) Mb(0)–sm Mt(0.8em)–sm" type="text" content="This article first appeared on GuruFocus.
” data-reactid=”58″>This article first appeared on GuruFocus.

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