Political advertisers shift spending from Facebook to streaming platforms ahead of midterms

Published

3 years ago

November 2, 2022

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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 it 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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Technology

Apple scores big victory with ‘F1,’ but AI is still a major problem in Cupertino

Published

10 hours ago

July 4, 2025

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Apple scores big victory with 'F1,' but AI is still a major problem in Cupertino

Formula One F1 – United States Grand Prix – Circuit of the Americas, Austin, Texas, U.S. – October 23, 2022 Tim Cook waves the chequered flag to the race winner Red Bull’s Max Verstappen

Mike Segar | Reuters

Apple had two major launches last month. They couldn’t have been more different.

First, Apple revealed some of the artificial intelligence advancements it had been working on in the past year when it released developer versions of its operating systems to muted applause at its annual developer’s conference, WWDC. Then, at the end of the month, Apple hit the red carpet as its first true blockbuster movie, “F1,” debuted to over $155 million — and glowing reviews — in its first weekend.

While “F1” was a victory lap for Apple, highlighting the strength of its long-term outlook, the growth of its services business and its ability to tap into culture, Wall Street’s reaction to the company’s AI announcements at WWDC suggest there’s some trouble underneath the hood.

“F1” showed Apple at its best — in particular, its ability to invest in new, long-term projects. When Apple TV+ launched in 2019, it had only a handful of original shows and one movie, a film festival darling called “Hala” that didn’t even share its box office revenue.

Despite Apple TV+ being written off as a costly side-project, Apple stuck with its plan over the years, expanding its staff and operation in Culver City, California. That allowed the company to build up Hollywood connections, especially for TV shows, and build an entertainment track record. Now, an Apple Original can lead the box office on a summer weekend, the prime season for blockbuster films.

The success of “F1” also highlights Apple’s significant marketing machine and ability to get big-name talent to appear with its leadership. Apple pulled out all the stops to market the movie, including using its Wallet app to send a push notification with a discount for tickets to the film. To promote “F1,” Cook appeared with movie star Brad Pitt at an Apple store in New York and posted a video with actual F1 racer Lewis Hamilton, who was one of the film’s producers.

(L-R) Brad Pitt, Lewis Hamilton, Tim Cook, and Damson Idris attend the World Premiere of “F1: The Movie” in Times Square on June 16, 2025 in New York City.

Jamie Mccarthy | Getty Images Entertainment | Getty Images

Although Apple services chief Eddy Cue said in a recent interview that Apple needs the its film business to be profitable to “continue to do great things,” “F1” isn’t just about the bottom line for the company.

Apple’s Hollywood productions are perhaps the most prominent face of the company’s services business, a profit engine that has been an investor favorite since the iPhone maker started highlighting the division in 2016.

Films will only ever be a small fraction of the services unit, which also includes payments, iCloud subscriptions, magazine bundles, Apple Music, game bundles, warranties, fees related to digital payments and ad sales. Plus, even the biggest box office smashes would be small on Apple’s scale — the company does over $1 billion in sales on average every day.

But movies are the only services component that can get celebrities like Pitt or George Clooney to appear next to an Apple logo — and the success of “F1” means that Apple could do more big popcorn films in the future.

“Nothing breeds success or inspires future investment like a current success,” said Comscore senior media analyst Paul Dergarabedian.

But if “F1” is a sign that Apple’s services business is in full throttle, the company’s AI struggles are a “check engine” light that won’t turn off.

Replacing Siri’s engine

At WWDC last month, Wall Street was eager to hear about the company’s plans for Apple Intelligence, its suite of AI features that it first revealed in 2024. Apple Intelligence, which is a key tenet of the company’s hardware products, had a rollout marred by delays and underwhelming features.

Apple spent most of WWDC going over smaller machine learning features, but did not reveal what investors and consumers increasingly want: A sophisticated Siri that can converse fluidly and get stuff done, like making a restaurant reservation. In the age of OpenAI’s ChatGPT, Anthropic’s Claude and Google’s Gemini, the expectation of AI assistants among consumers is growing beyond “Siri, how’s the weather?”

The company had previewed a significantly improved Siri in the summer of 2024, but earlier this year, those features were delayed to sometime in 2026. At WWDC, Apple didn’t offer any updates about the improved Siri beyond that the company was “continuing its work to deliver” the features in the “coming year.” Some observers reduced their expectations for Apple’s AI after the conference.

“Current expectations for Apple Intelligence to kickstart a super upgrade cycle are too high, in our view,” wrote Jefferies analysts this week.

Siri should be an example of how Apple’s ability to improve products and projects over the long-term makes it tough to compete with.

It beat nearly every other voice assistant to market when it first debuted on iPhones in 2011. Fourteen years later, Siri remains essentially the same one-off, rigid, question-and-answer system that struggles with open-ended questions and dates, even after the invention in recent years of sophisticated voice bots based on generative AI technology that can hold a conversation.

Apple’s strongest rivals, including Android parent Google, have done way more to integrate sophisticated AI assistants into their devices than Apple has. And Google doesn’t have the same reflex against collecting data and cloud processing as privacy-obsessed Apple.

Some analysts have said they believe Apple has a few years before the company’s lack of competitive AI features will start to show up in device sales, given the company’s large installed base and high customer loyalty. But Apple can’t get lapped before it re-enters the race, and its former design guru Jony Ive is now working on new hardware with OpenAI, ramping up the pressure in Cupertino.

“The three-year problem, which is within an investment time frame, is that Android is racing ahead,” Needham senior internet analyst Laura Martin said on CNBC this week.

Apple’s services success with projects like “F1” is an example of what the company can do when it sets clear goals in public and then executes them over extended time-frames.

Its AI strategy could use a similar long-term plan, as customers and investors wonder when Apple will fully embrace the technology that has captivated Silicon Valley.

Wall Street’s anxiety over Apple’s AI struggles was evident this week after Bloomberg reported that Apple was considering replacing Siri’s engine with Anthropic or OpenAI’s technology, as opposed to its own foundation models.

The move, if it were to happen, would contradict one of Apple’s most important strategies in the Cook era: Apple wants to own its core technologies, like the touchscreen, processor, modem and maps software, not buy them from suppliers.

Using external technology would be an admission that Apple Foundation Models aren’t good enough yet for what the company wants to do with Siri.

“They’ve fallen farther and farther behind, and they need to supercharge their generative AI efforts” Martin said. “They can’t do that internally.”

Apple might even pay billions for the use of Anthropic’s AI software, according to the Bloomberg report. If Apple were to pay for AI, it would be a reversal from current services deals, like the search deal with Alphabet where the Cupertino company gets paid $20 billion per year to push iPhone traffic to Google Search.

The company didn’t confirm the report and declined comment, but Wall Street welcomed the report and Apple shares rose.

In the world of AI in Silicon Valley, signing bonuses for the kinds of engineers that can develop new models can range up to $100 million, according to OpenAI CEO Sam Altman.

“I can’t see Apple doing that,” Martin said.

Earlier this week, Meta CEO Mark Zuckerberg sent a memo bragging about hiring 11 AI experts from companies such as OpenAI, Anthropic, and Google’s DeepMind. That came after Zuckerberg hired Scale AI CEO Alexandr Wang to lead a new AI division as part of a $14.3 billion deal.

Meta’s not the only company to spend hundreds of millions on AI celebrities to get them in the building. Google spent big to hire away the founders of Character.AI, Microsoft got its AI leader by striking a deal with Inflection and Amazon hired the executive team of Adept to bulk up its AI roster.

Apple, on the other hand, hasn’t announced any big AI hires in recent years. While Cook rubs shoulders with Pitt, the actual race may be passing Apple by.

WATCH: Jefferies upgrades Apple to ‘Hold’

Technology

Musk backs Sen. Paul’s criticism of Trump’s megabill in first comment since it passed

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10 hours ago

July 4, 2025

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Musk backs Sen. Paul's criticism of Trump's megabill in first comment since it passed

Tesla CEO Elon Musk speaks alongside U.S. President Donald Trump to reporters in the Oval Office of the White House on May 30, 2025 in Washington, DC.

Kevin Dietsch | Getty Images

Tesla CEO Elon Musk, who bombarded President Donald Trump‘s signature spending bill for weeks, on Friday made his first comments since the legislation passed.

Musk backed a post on X by Sen. Rand Paul, R-Ky., who said the bill’s budget “explodes the deficit” and continues a pattern of “short-term politicking over long-term sustainability.”

The House of Representatives narrowly passed the One Big Beautiful Bill Act on Thursday, sending it to Trump to sign into law.

Paul and Musk have been vocal opponents of Trump’s tax and spending bill, and repeatedly called out the potential for the spending package to increase the national debt.

On Monday, Musk called it the “DEBT SLAVERY bill.”

The independent Congressional Budget Office has said the bill could add $3.4 trillion to the $36.2 trillion of U.S. debt over the next decade. The White House has labeled the agency as “partisan” and continuously refuted the CBO’s estimates.

Microsoft layoffs hit 830 workers in home state of Washington

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1 day ago

July 3, 2025

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Microsoft layoffs hit 830 workers in home state of Washington

Microsoft CEO Satya Nadella speaks at the Axel Springer building in Berlin on Oct. 17, 2023. He received the annual Axel Springer Award.

Ben Kriemann | Getty Images

Among the thousands of Microsoft employees who lost their jobs in the cutbacks announced this week were 830 staffers in the company’s home state of Washington.

Nearly a dozen game design workers in the state were part of the layoffs, along with three audio designers, two mechanical engineers, one optical engineer and one lab technician, according to a document Microsoft submitted to Washington employment officials.

There were also five individual contributors and one manager at the Microsoft Research division in the cuts, as well as 10 lawyers and six hardware engineers, the document shows.

Microsoft announced plans on Wednesday to eliminate 9,000 jobs, as part of an effort to eliminate redundancy and to encourage employees to focus on more meaningful work by adopting new technologies, a person familiar with the matter told CNBC. The person asked not to be named while discussing private matters.

Scores of Microsoft salespeople and video game developers have since come forward on social media to announce their departure. In April, Microsoft said revenue from Xbox content and services grew 8%, trailing overall growth of 13%.

In sales, the company parted ways with 16 customer success account management staff members based in Washington, 28 in sales strategy enablement and another five in sales compensation. One Washington-based government affairs worker was also laid off.

Microsoft eliminated 17 jobs in cloud solution architecture in the state, according to the document. The company’s fastest revenue growth comes from Azure and other cloud services that customers buy based on usage.

CEO Satya Nadella has not publicly commented on the layoffs, and Microsoft didn’t immediately provide a comment about the cuts in Washington. On a conference call with analysts in April, Microsoft CFO Amy Hood said the company had a “focus on cost efficiencies” during the March quarter.

WATCH: Microsoft layoffs not performance-based, largely targeting middle managers