Made You Click: How Facebook Fed You Political Ads for Less Than a Penny

By Deepa Seetharaman Features Dow Jones Newswires

On Facebook, a little ad spending goes a long way -- and the more contentious the ads are, the farther they may go.

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Facebook Inc. disclosed last week that Russian entities spent some $150,000 for ads about "divisive" topics during a two-year period that included the U.S. presidential race.

Compared with the $1.4 billion spent on digital ads in races during the 2016 election season, $150,000 is a drop in the bucket. But the Russian-backed messages may have had outsize reach, ad buyers say, because Facebook favors ads that grab users' attention and make them click, whether the content is political or otherwise, sensational or not.

In all, the Russians' ads could have reached 3 million to 20 million or more people on the social network, according to digital advertising experts including Joe Yakuel, founder and chief executive of Agency Within, a New York-based firm that manages more than $100 million a year in digital ad purchases, mainly for e-commerce companies.

Facebook has said little about the approximately 5,200 ads, which mostly centered on hot-button social and political issues like immigration and race relations. Facebook declined to say what the ads looked like, how many people they reached or who the targets were.

Depending on how they are presented, ads on such provocative topics can have wide reach at a low cost if the messages go viral or gain traction among their target audience, say ad buyers who work with companies and political candidates to create Facebook campaigns. Experts cautioned that it isn't clear how well the Russian-backed ads performed or whether they swayed the election.

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Facebook ads that appear in users' news feeds power the vast majority of its revenue, which amounted to more than $17 billion for the first half of 2017, according to company financial reports. In Facebook's internal ad-auction system, ads compete in billions of auctions a day for slots in users' news feeds. The system tends to reward ads that spark engagement -- by getting users to click, share or otherwise spend time viewing -- and sometimes it picks such ads over less-engaging ads that have a higher bid, advertisers say.

"When you put out an ad and Facebook sees that relative to other ads this is one is getting a lot of shares, that really seems to drive the cost down," said Anthony Astolfi, creative director at IVC Media, who led digital advertising for Gary Johnson's presidential campaign.

Mr. Yakuel said Agency Within once launched a video ad campaign that he would describe only as "controversial" for a corporate client that he wouldn't identify. The day before the campaign, 32,500 Facebook users had engaged with the client's ads. The client spent only a fraction of a penny, or 0.024 cent, for each user its ads were intended to reach. After the video launched, 55,000 users engaged, and the cost of reaching a single user dropped 30% to 0.017 cent, he said.

"If you have strong opinions on two sides of the same topic, those will typically be more engaging," Mr. Yakuel said. "Even inadvertent controversy can cause a lot of engagement."

Advertisers sometimes pay extra to reach Facebook users with specific interests, such as car buyers or spa enthusiasts, or who have conservative or liberal political views. The cost for reaching voters in an election year is around $5 per 1,000 impressions but can shoot up to $10 closer to Election Day, one buyer estimated.

Facebook's disclosure of Russian-bought ads has reignited questions about how much the company shaped political debate during the 2016 presidential campaign by enabling the spread of divisive advertising and free posts containing misinformation across the platform.

Both Donald Trump and Hillary Clinton bought Facebook ads to raise money and warn about the other candidate. A pro-Clinton super PAC ran a four-part animated series that painted a bleak future under Mr. Trump; other Clinton ads focused on signing up volunteers or registering voters. Some Trump ads hawked "Make American Great Again" hats and other gear, touted his debate performance or called Mrs. Clinton corrupt.

The Trump campaign's ads drew more engagement on Facebook, in the form of clicks and other signals, than those of the Clinton camp, according to people familiar with the internal figures. Representatives for the two campaigns' digital ad teams declined to comment. Facebook declined to comment on the candidates' relative performance.

The Trump campaign paid roughly $90 million for digital ads to Giles-Parscale, a San Antonio-based web-marketing company run by Brad Parscale, the campaign's digital director. The Clinton camp paid more than $100 million to Bully Pulpit Interactive, which led that team's digital marketing strategy.

During the Democratic primary, Bernie Sanders's campaign bought Facebook ads urging the U.S. to welcome Syrian refugees, said Keegan Goudiss, partner at Revolution Messaging and former director of digital advertising for the campaign. The ads were shown to Facebook users in mostly Republican states, such as Maryland, whose governors objected to the resettling Syrian refugees without more vetting, Mr. Goudiss said.

The most successful version of the ad campaign drew 75% of its impressions through organic sharing on Facebook, Mr. Goudiss added. This sharing lowered the campaign's effective cost of reaching every user.

About 3,000 of the Russian-bought ads were connected to accounts created by a single pro-Kremlin firm, the Internet Research Agency. The ads came to light less than two months after Facebook asserted it found no evidence of Russian purchases of ads on the platform. One of the Russian accounts that bought ads, Facebook has said, was Secured Borders, a page with more than 133,000 followers that promoted an anti-immigration rally planned for August 2016 in Twin Falls, Idaho. The rally, first reported by The Daily Beast, was canceled, according to an archived version of the event page.

This week, members of the Senate Intelligence Committee said they would likely hold a public hearing and ask Facebook representatives to detail Russian activity on the platform during the election season.

Write to Deepa Seetharaman at Deepa.Seetharaman@wsj.com

(END) Dow Jones Newswires

September 15, 2017 09:08 ET (13:08 GMT)