Meta Documents Indicate Protection for High Spending Advertisers

Recent internal documents from Meta Platforms, Inc. have surfaced, suggesting a policy meant to safeguard high-spending advertisers from being affected by automated content moderation.

What Happened: According to the documents revealed in 2023, Meta has established certain "guardrails" to shield its top advertisers. This information was reported by the Financial Times.

The measures implemented include reducing automated content detection based on the amount spent on advertising. This implies that for some accounts, reviews are conducted manually instead of relying solely on automated processes.

A particular group, referred to as "P95 spenders," which consists of advertisers who spend over $1,500 daily, seems to benefit from these exemptions from regular advertising restrictions.

In response to these revelations, Ryan Daniels, a spokesperson for Meta, denied the accuracy of the report. He indicated that it was based on a selective interpretation of the information available.

However, Meta did confirm that it employs "higher spend" as a guardrail. This precaution stems from concerns about the potential fallout from mistakenly flagging or removing high-reach advertisements.

Despite the claims of preferential treatment, Meta asserts that all advertisers are held to the same standards, indicating there are no exceptions to its advertising rules. The company has not yet provided feedback to recent inquiries regarding these matters.

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Why It Matters: Advertising plays a crucial role in revenue generation for Meta, contributing approximately $135 billion in 2023.

In its most recent report for the third quarter of 2024, Meta disclosed earnings of $40.59 billion, a figure that exceeded analyst expectations of $40.29 billion. Additionally, ad impressions increased by 7% from the previous year, while the average price per advertisement saw an increase of 11% year-over-year.

This information comes at a critical time, as Meta undergoes changes to its content moderation policies. Just recently, Meta CEO Mark Zuckerberg announced a transition towards a moderation style that resembles Elon Musk’s X, known as Community Notes.

This decision follows a report indicating that Meta's platforms were inadvertently promoting illegal content, such as advertising gun silencers—an issue that contradicts their stated advertising policies.

Price Action: On a recent Thursday, Meta’s stock experienced a decline of 1.16%, followed by an additional drop of 0.34% in after-hours trading, bringing the stock's price to $608.64. Nevertheless, despite this recent downturn, shares have appreciated by 3.58% year-to-date based on available data.

Image from Shutterstock

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Meta, advertising, moderation