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Advertisers up scrutiny of social media fake activity

Thursday, June 20, 2019

Subject

Advertising on social media.

Significance

There is growing alignment between regulatory pressure on social media companies to suppress fake accounts and the firms' commercial interest in attracting advertisers. Advertisers, who provide the bulk of social media platforms’ revenue, are beginning to question whether they are getting value for money when their advertising budget is spent on fake clicks.

Impacts

  • Action against fake activity on social media will cause a short-term dip in the firms’ share price.
  • Demand will rise for 'influencers' who can show their following consists of genuine users.
  • Some advertisers will distance themselves from social media due to the latter’s failures on tackling hate speech and polarisation.
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