Honest Ads Act — Know Your Advertiser

To improve transparency and accountability for online political advertisements, the bipartisan Honest Ads Act proposed in the U.S. Congress aims to prohibit the purchase of political advertising by foreign nationals and reveal the true source of funding for political ads. This would put online advertising on the same footing as broadcast media in requiring disclosures on who is buying the ad and who or what issue is the ad supporting.

There are several big drivers behind the Honest Ads Act, including:

• The ubiquitous nature of the internet and its use as a source of political information. In the 2004 US election, 18 percent cited the internet as their primary source of information, while in 2016 that number grew to 65 percent.
• The broad reach of the internet as a platform now reaches significantly more people than traditional mass media. For example, the largest internet platform has 210 million US users, while the largest cable television provider has less than 23 million subscribers.
• The specificity of internet experiences and marketing. Broadcast media is public information and thus can be reviewed and analyzed by numerous parties, while internet ads are potentially micro-targeted to a small subset of users, so the information is difficult to discredit or fact-check.
• The ease for foreign or outside parties to distribute digital campaigns and messages. According to an Office of the Director of National Intelligence report, “Russian President Vladimir Putin ordered an influence campaign in 2016 aimed at the U.S. Presidential election” which included various digital strategies including the purchase of targeted digital advertising.

The existing Federal Election Campaign Act (FECA) was passed in 1971 and last amended in 1979 — well before the realities of modern-day internet use. The Honest Ads Act includes language to include paid internet or paid digital communications in the definitions of public communication. It also extends the news exemption to cover digital forms of communication.

Requirements for disclaimers and safe harbors that meet certain disclaimer requirements are also updated to reflect the nature of digital communications.

Political Record Requirements

The most extensive changes for operators of certain online platforms are the record keeping requirements for political ads. These platforms are public-facing websites and web or digital applications that have over 50 million unique monthly US visits and sell qualified political ads.

These platforms must keep a record for four years of any political ads bought by a person, if that person’s ad spend total is over $500 in that year. The record includes:

• A copy of the ad
• Audience targeting, number of ad views and ad campaign dates
• Average rate charged for the ad
• Name of the candidate, office, year or issue that the ad is supporting
• If the ad was bought on behalf of a candidate, the candidate’s name, purchaser, committee name and treasurer

The record must be publicly available.

Know Your Advertiser

Facebook recently announced that they are in favor of the proposed legislation. As CEO Mark Zuckerberg wrote, “election interference is a problem that’s bigger than any one platform, and that’s why we support the Honest Ads Act. This will help raise the bar for all political advertising online.”

Facebook has gone further and will now requires that “every advertiser who wants to run political or issue ads will need to be verified. To get verified, advertisers will need to confirm their identity and location.”

In addition, Facebook “will also require people who manage large pages to be verified as well. This will make it much harder for people to run pages using fake accounts, or to grow virally and spread misinformation or divisive content that way.”

While these steps aren’t explicitly required in the Honest Ads Act, it’s part of a trend toward effective third-party due diligence. After all, in today’s interconnected world a business’s compliance, reputation and profitability are deeply connected with all the intertwined relationships that business has.

Public acceptance of advertising might grow if they know that the advertiser has been properly vetted, which is good for the advertiser, the public and the advertising platform. Facebook, as they have been many times before, might be on to something with their know your advertiser due diligence requirement.