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A woman walks past a polling station during early voting for the US midterm elections on October 28, 2022 in Silver Spring, Maryland.

Brendan Smialowski | AFP | Getty Images

In the 2020 election cycle, the Democratic Governors Association spent roughly 75% of its advertising budget on Facebook, taking advantage of the app’s ubiquity and its ability to deliver hyper-targeted ads to potential voters.

For the 2022 midterm elections, which include many key gubernatorial contests and will determine control of the House and Senate, the group has steered much of its money elsewhere. Ahead of Election Day on Nov. 8, just half of its spending is taking place on Facebook.

“I think the throughline that you’ll see overall is Facebook has become a much less effective platform over the past two years,” said Laura Carlson, digital director of the Democratic Governors Association.

Facebook has been mired in political controversy for over a half decade, since the platform was abused during the 2016 election campaign by foreign actors spreading disinformation. The 2020 season wasn’t much better, and ultimately led to Facebook’s banning of ex-President Donald Trump from the app following the Jan. 6, 2021, insurrection on the U.S. Capitol.

But none of that explains why political campaigns have been turning away from Facebook. Rather, Carlson said the changes that Apple made to iOS last year, which limited the targeting capabilities for advertisers, have made Facebook a less valuable tool for disseminating political messages to the correct audience.

“I think the real culprit that you see is the privacy changes on the iPhone,” Carlson said. She said her organization is pushing the other half of its $10 million budget to areas like traditional email and text campaigns as well as newer platforms like connected TV and streaming services.

The retreat from Facebook by political advertisers mirrors the broader challenge the company faces now that brands can no longer rely on key pieces of user data to promote their products and services. Facebook parent Meta just reported its second straight quarter of declining revenue and said another decline is coming in the fourth quarter. The stock has lost 72% of its value year to date and closed on Monday at its lowest point since early 2016.

Political ads have always been a small part of Facebook’s overall business. An analysis by CNBC ahead of the 2020 election, based on data from Facebook’s ad library and the Center for Responsive Politics, showed that at least 3% of the company’s estimated revenue for the third quarter of that year was from politicians and campaigns.

Protestors demonstrate with an art installation of body bags during a protest against Facebook and what they claim is disinformation regarding coronavirus disease (COVID-19) on the social media giant’s platform, outside the front doors of Facebook headquarters in Washington, U.S., July 28, 2021.

Jim Bourg | Reuters

For many campaigns, Facebook had become the go-to spot for ads because of the reach and the ability to both distribute messages and raise money from wide swaths of people. Representative Alexandria Ocasio-Cortez, D-N.Y., berated fellow Democratic nominees after the 2020 election, telling The New York Times that the party lost seats in Congress because candidates didn’t spend enough on Facebook.

The math has since changed.

Annie Levene, a partner for the democratic advertising firm Rising Tide Interactive, said her organization has slashed its Facebook budget for the midterms compared to the last cycle from around 10% to between 3% and 5%.

Levene said Facebook is still useful for running relatively simple fundraising ads where it’s easy to track return on investment. But for the more complicated persuasion ads, Levene said Facebook doesn’t offer a lot of value since the iOS change.

“We have to do what is best for our clients,” Levene said. She said she’ll use Facebook for raising money, because “it would be sort of malpractice to say here’s a channel that we could be really successful for you on fundraising, but we’re not going to do it.”

Ethan Eilon, the president of digital marketing firm IMGE, which works with Republicans, said the Apple iOS update is a major reason his group is “investing considerably less in Facebook advertising compared to other platforms and channels than we were last cycle.”

However, it’s not just about Apple. Advertisers told CNBC that they also learned an important lesson from a turbulent 2020 cycle, when platforms including Facebook banned new political ads from running the week before the election. Facebook said its ban, announced about two months before Election Day, was intended to “connect people with authoritative information” and to “fight misinformation.”

‘A big shake-up’

Grace Briscoe, senior vice president at marketing technology firm Basis Technologies, said the short notice was particularly concerning in tight races like the Georgia Senate runoff elections in January 2021.

“That was a big shake-up, I think, in a lot of our clients’ minds of being overly reliant on a platform that might sort of pull the rug out from under you,” Briscoe said. “That’s not helping with that sort of trust level between the political advertisers for sure and the platforms.”

Basis, whose technology is used by political campaigns, saw a 1,500% increase in spending on connected TV devices in the first half of 2022 compared to the first half of 2020, Briscoe said. That’s especially significant considering there’s no presidential contest this cycle, which typically means lower turnout.

Two years ago, streaming platforms made up a small share of overall political ad spending, though many experts predicted it would grow over time. The pandemic accelerated that trend since so many consumers turned to streaming platforms while stuck at home, and content for cord-cutters proliferated.

Total ad spending on connected TV platforms climbed 57% in 2021 to $15.2 billion and is expected to jump another 39% this year to $21.2 billion, according to the Interactive Advertising Bureau. Ad tracking firm AdImpact projected that of the $9.7 billion spent on political ads this cycle, $1.4 billion would go to connected TVs.

John Padua, vice president of media buying at Trilogy Interactive, said some of his agency’s spending that had been on Facebook has been redirected toward streaming.

That last week of ads before an election is so important, Padua said, because you’re “trying to find those last five, 10 thousand votes that could make the biggest difference in a congressional election, particularly in a potential wave year.”

He added that you get a last chance to respond to a “bit of polling that tells us that we need to shore up a certain demographic or people who have certain issues.”

Padua, whose agency has worked for the Democratic Congressional Campaign Committee, Senate Majority Leader Chuck Schumer, D-N.Y., and Sen. Raphael Warnock, D-Ga, said Trilogy is still going to do last-minute ads, but “we’re going to just put that message out on different platforms, and Facebook is just going to be cut out of buying.”

Sen. Warnock holds slight lead in tight Georgia race

Facebook parent company Meta declined to comment for this story.

Advertisers stressed that spending on Facebook and other social platforms is still valuable and an important part of the overall mix. Political groups and lawmakers spent around $84 million on Facebook ads during the third quarter of 2022, with around $58 million spent on direct response advertising, according to Ad Impact.

But every source who spoke on the topic to CNBC said Facebook is not as effective as in past cycles, leading many to search out other options like streaming.

Smart TVs provide a medium that’s already quite familiar to political advertisers: television. Advertisers said that TV ads tend to be more about persuasion and telling a story than ads on Facebook.

Interest in connected TV and over-the-top platforms has “skyrocketed” since the 2020 presidential elections, said Joe Marino, the head of client success at Madhive, which helps companies run and manage ad campaigns across streaming services. “Going into this cycle now, streaming is literally a part of every single buy, and it’s a big part of it,” Marino said.

He added that the platforms have matured dramatically and have made it much simpler to run campaigns than in the past, approaching Facebook-like ease.

“The beauty in digital is that budgets can be fluid,” Marino said, contrasting streaming with traditional linear television. “You can cancel them on a dime and move them on a dime.”

Briscoe said the targeting has gotten much better as well. Streaming services now have the type of location and behavioral click-through data that advertisers highly value in efficiently getting their message out.

“It is actually much easier for campaigns to scale connected TV, even down to like a state legislative district, which was not possible two years ago even,” Briscoe said. “Two years ago, we were excited if a connected-TV campaign could scale in a congressional district. Now, you’re getting much more narrow.”

Roku CEO Anthony Wood said after his company’s second-quarter earnings report in July that “political is a good vertical for us, a scenario that’s growing” even though was “not a huge business” at the time. Roku and Amazon lead the U.S. market for streaming devices.

‘Completely performative’

Just as new ad avenues are popping up, a persisting issue for Facebook, advertisers say, is that the restrictions the company put on political campaigns in 2020 haven’t been effective at slowing the spread of misinformation.

Hate speech and conspiracy theories have continued to run rampant on Facebook, despite community guidelines that ban such behavior. But much of that content comes from people who post it for free, rather than paid placements.

“I don’t think the problem on these platforms, whether it’s Facebook or Google, was ever advertising,” said Patrick McHugh, a partner at Gambit Strategies, which focuses on online mobilization for Democratic causes and candidates. He called Facebook’s policies “completely performative.”

“They’ve utilized political advertising as sort of the facade that they then use to put restrictions on because they like to claim that fixes the problem,” McHugh added. “The truth is, if they really did fix the actual problem, that is rooted in their algorithm that will cost them money.”

It doesn’t help that Facebook has turned into a punching bag on Capitol Hill by many of the same politicians who relied on the site for prior campaigning.

Facebook co-founder, Chairman and CEO Mark Zuckerberg testifies before the House Energy and Commerce Committee in the Rayburn House Office Building on Capitol Hill April 11, 2018 in Washington, DC.

Yasin Ozturk | Anadolu Agency | Getty Images

Facebook executives have been called to Washington numerous times in recent years to testify about the legal liability that protects social media, antitrust issues facing Big Tech and, most recently, the whistleblower revelations last year about the company’s unwillingness to make changes despite knowing some of the content it hosts is harming users.

Marino said that during past crises advertisers have shifted budgets away from Facebook, only to come back when the temperature cooled. That occurred after the Cambridge Analytica scandal of 2018, which was explosive at the time and eventually led the company to settle a lawsuit. Facebook’s business momentum quickly recovered, however.

“If you see any press about Facebook that’s negative, generally budgets flow out of that really quickly into other channels,” Marino said. “They’ll flow back once people pretend to forget.”

This cycle has a distinctly different tone, though. So many changes have taken place with Facebook’s business and the broad ad ecosystem that advertisers are suggesting the latest shift away to other platforms seems more permanent.

Republican political consultant Luke Thompson said that while Facebook is still “essential for fundraising and volunteer organizing,” it no longer has the tools necessary to attract broader campaigns.

Apple’s crackdown has indeed diminished Facebook’s position in political advertising. But Thompson said it started with the “reputational damage from the Cambridge Analytica scandal,” which he described as a cynical effort by lawmakers to try and convince the public of election interference.

“Since then, the platform has become much less open, more rigid, and less willing to share outcome data,” Thompson said.

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Nvidia positioned to weather Trump tariffs, chip demand ‘off the charts,’ says Altimeter’s Gerstner

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Nvidia positioned to weather Trump tariffs, chip demand 'off the charts,' says Altimeter's Gerstner

Altimeter CEO Brad Gerstner is buying Nvidia

Altimeter Capital CEO Brad Gerstner said Thursday that he’s moving out of the “bomb shelter” with Nvidia and into a position of safety, expecting that the chipmaker is positioned to withstand President Donald Trump’s widespread tariffs.

“The growth and the demand for GPUs is off the charts,” he told CNBC’s “Fast Money Halftime Report,” referring to Nvidia’s graphics processing units that are powering the artificial intelligence boom. He said investors just need to listen to commentary from OpenAI, Google and Elon Musk.

President Trump announced an expansive and aggressive “reciprocal tariff” policy in a ceremony at the White House on Wednesday. The plan established a 10% baseline tariff, though many countries like China, Vietnam and Taiwan are subject to steeper rates. The announcement sent stocks tumbling on Thursday, with the tech-heavy Nasdaq down more than 5%, headed for its worst day since 2022.

The big reason Nvidia may be better positioned to withstand Trump’s tariff hikes is because semiconductors are on the list of exceptions, which Gerstner called a “wise exception” due to the importance of AI.

Nvidia’s business has exploded since the release of OpenAI’s ChatGPT in 2022, and annual revenue has more than doubled in each of the past two fiscal years. After a massive rally, Nvidia’s stock price has dropped by more than 20% this year and was down almost 7% on Thursday.

Gerstner is concerned about the potential of a recession due to the tariffs, but is relatively bullish on Nvidia, and said the “negative impact from tariffs will be much less than in other areas.”

He said it’s key for the U.S. to stay competitive in AI. And while the company’s chips are designed domestically, they’re manufactured in Taiwan “because they can’t be fabricated in the U.S.” Higher tariffs would punish companies like Meta and Microsoft, he said.

“We’re in a global race in AI,” Gerstner said. “We can’t hamper our ability to win that race.”

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YouTube announces Shorts editing features amid potential TikTok ban

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YouTube announces Shorts editing features amid potential TikTok ban

Jaque Silva | Nurphoto | Getty Images

YouTube on Thursday announced new video creation tools for Shorts, its short-form video feed that competes against TikTok. 

The features come at a time when TikTok, which is owned by Chinese company ByteDance, is at risk of an effective ban in the U.S. if it’s not sold to an American owner by April 5.

Among the new tools is an updated video editor that allows creators to make precise adjustments and edits, a feature that automatically syncs video cuts to the beat of a song and AI stickers.

The creator tools will become available later this spring, said YouTube, which is owned by Google

Along with the new features, YouTube last week said it was changing the way view counts are tabulated on Shorts. Under the new guidelines, Shorts views will count the number of times the video is played or replayed with no minimum watch time requirement. 

Previously, views were only counted if a video was played for a certain number of seconds. This new tabulation method is similar to how views are counted on TikTok and Meta’s Reels, and will likely inflate view counts.

“We got this feedback from creators that this is what they wanted. It’s a way for them to better understand when their Shorts have been seen,” YouTube Chief Product Officer Johanna Voolich said in a YouTube video. “It’s useful for creators who post across multiple platforms.”

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Tech stocks sink after Trump tariff rollout — Apple heads for worst drop in 5 years

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Tech stocks sink after Trump tariff rollout — Apple heads for worst drop in 5 years

CEO of Meta and Facebook Mark Zuckerberg, Lauren Sanchez, Amazon founder Jeff Bezos, Google CEO Sundar Pichai, and Tesla and SpaceX CEO Elon Musk attend the inauguration ceremony before Donald Trump is sworn in as the 47th U.S. president in the U.S. Capitol Rotunda in Washington, Jan. 20, 2025.

Saul Loeb | Via Reuters

Technology stocks plummeted Thursday after President Donald Trump’s new tariff policies sparked widespread market panic.

Apple led the declines among the so-called “Magnificent Seven” group, dropping nearly 9%. The iPhone maker makes its devices in China and other Asian countries. The stock is on pace for its steepest drop since 2020.

Other megacaps also felt the pressure. Meta Platforms and Amazon fell more than 7% each, while Nvidia and Tesla slumped more than 5%. Nvidia builds its new chips in Taiwan and relies on Mexico for assembling its artificial intelligence systems. Microsoft and Alphabet both fell about 2%.

Semiconductor stocks also felt the pain, with Marvell Technology, Arm Holdings and Micron Technology falling more than 8% each. Broadcom and Lam Research dropped 6%, while Advanced Micro Devices declined more than 4% Software stocks ServiceNow and Fortinet fell more than 5% each.

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The drop in technology stocks came amid a broader market selloff spurred by fears of a global trade war after Trump unveiled a blanket 10% tariff on all imported goods and a range of higher duties targeting specific countries after the bell Wednesday. He said the new tariffs would be a “declaration of economic independence” for the U.S.

Companies and countries worldwide have already begun responding to the wide-sweeping policy, which included a 34% tariff on China stacked on a previous 20% tax, a 46% duty on Vietnam and a 20% levy on imports from the European Union.

China’s Ministry of Commerce urged the U.S. to “immediately cancel” the unilateral tariff measures and said it would take “resolute counter-measures.”

The tariffs come on the heels of a rough quarter for the tech-heavy Nasdaq and the worst period for the index since 2022. Stocks across the board have come under pressure over concerns of a weakening U.S. economy. The Nasdaq Composite dropped nearly 5% on Thursday, bringing its year-to-date loss to 13%.

Trump applauded some megacap technology companies for investing money into the U.S. during his speech, calling attention to Apple’s plan to spend $500 billion over the next four years.

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