If you go back a little more than a year ago Facebook offered advertisers a wealth of targeting options, unmatched on any other platform. Using data acquired through third parties and merged with Facebook's user data, advertisers were able to target users based upon a plethora of demographic data including some predictive metrics - e.g. likely to buy a house. In addition, virtually any of a user's preferences could potentially become fair game for targeting.
But then came the Cambridge Analytica scandal, which triggered even broader privacy concerns, and Facebook decided to ditch the third party data. Advertisers could still acquire that data and attempt to merge it with Facebook's user data on their own but that process became much more complicated and out of the reach of smaller advertisers.
In roughly the same time period Facebook came under scrutiny for allowing advertisers to violate the Fair Housing Act in their ads by targeting or excluding protected classes of users based upon a variety of preferences/ affiliations. In response Facebook eliminated 5000 targeting options from their platform.
However, that did not put an end to Facebook's problems with Fair Housing laws. The lawsuits continued and were joined with a lawsuit from the ACLU and others that added Equal Employment Opportunity violations to the mix. Finally, on March 19 a settlement was reached.
Unfortunately, we only have a summary of the settlement available at this time but it outlines the steps that Facebook will take to prevent discrimination in housing, employment, and credit (HEC) advertising. It involves Facebook creating a separate portal for these kinds of ads and preventing them from targeting or excluding people based on any characteristic that can be associated with a protected class. It will also prevent the creation of Lookalike Audiences that might incorporate such characteristics and it will force these advertisers to expand their geographical targets to a minimum of a 15 mile radius.
Most of this most recent settlement makes ethical and legal sense and it's not even clear why a business savvy HEC advertiser would want to focus their ads along these soon-to-be-restricted dimensions in the first place. However, is this the end of the erosion or is more to come as privacy and Fair Housing concerns continue to mount? Just today the Trump administration inexplicably filed a HUD lawsuit against Facebook despite this recent settlement. And to what extent will the system changes inadvertently affect non-regulated advertising - or advertising assumed to be regulated but perhaps not?
Let me give you some concrete examples of how messy this gets. The most obvious problem is that it's not even clear from the summary settlement exactly what would qualify as a "housing" ad and what types of advertisers would be relegated to the separate portal. Obviously an advertisement to find a buyer or renter for a home would be covered and that shouldn't create a problem. However, there are a variety of other real estate related ads that might get similarly restricted and become worthless to realtors.
There are virtually no Chicago area realtors (and I'm sure it's the same in other large urban areas) that can effectively spread themselves over a 15 mile radius. They want to do a variety of Facebook advertising that is tightly geographically focused but is not intended to offer housing opportunities - you know...farming:
- Just sold
- Find the value of your home
- Your neighborhood expert
- Just listed - which actually has nothing to do with finding a buyer for a home and everything to do with reinforcing that the realtor is a player in the neighborhood.
I think it's a safe bet that these babies will be thrown out with the bathwater. Ironically, all these advertisements can still effectively be done with narrow geographic targeting through the US Postal Service, Zillow, outdoor advertising, the local grocery store, various print publications, and Realtor.com. These alternate channels were once threatened by Facebook's killer advertising platform but that threat is getting weaker and weaker by the month. Realtors who were investing in the Facebook platform may soon return to more traditional channels.