Facebook to Spend 30% of Political Ad Sales on Oversight Board



Facebook (FB) has set aside $130 million to fund its independent content oversight board. Notably, the board will start operations next year. The funding will cover the board’s operating costs for about six years.

The company has a team that reviews posts. Overall, the team ensures that the content people post on Facebook conforms to its regulations. The team can remove content that’s deemed bad. However, Facebook’s content removal has sometimes caused disputes between the company and its users. Facebook decided to create a content oversight board to help its content moderation decisions. As a result, the board will step in if Facebook’s content removal decisions cause a dispute.

Article continues below advertisement

Projected 2020 political ad revenues

The funding allocation for Facebook’s content oversight board is equivalent to 30% of the political advertising revenues that the company expects to generate in 2020.

While discussing the third-quarter results in October, Facebook estimated that political advertising sales will contribute about 0.5% of its total revenues in 2020. Analysts expect Facebook to generate $85.8 billion in revenues in 2020. The company’s political ad sales would be around $430 million. So, the $130 million funding pledge for the independent content oversight board is 30% of that amount.

Facebook cashes in on 2020 campaign

Facebook’s political ads business will likely benefit from the 2020 campaign. From President Trump to Mike Bloomberg, the former New York mayor, the 2020 presidential candidates are splurging on Facebook ads. Currently, President Trump’s re-election campaign has spent $17.5 million on Facebook ads this year. Also, the total includes spending on Facebook ads about President Trump’s impeachment.

Senators Elizabeth Warren and Bernie Sanders have both spent over $5.0 million on Facebook ads to push their political messages. Bloomberg, who made a late entry into the Democratic presidential race, has spent $3.3 million on political Facebook ads. Overall, he plans to run an expensive presidential campaign. His campaign, which could cost $500 million, will likely boost Facebook’s revenues.

Even though Facebook will likely cash in on the 2020 election, the company’s political ads business is under fire. Some politicians have faulted Facebook’s decision not to check for accurate information in political ads running on its platforms. However, the company hopes that its independent content oversight board will reduce the criticism.


More From Market Realist