HUD Files Complaint, Prompts Facebook Ad Changes
Facebook is updating its advertising policies, which could have far-reaching effects for companies that buy ads on the social-media platform – including manufactured housing retailers.
On Aug. 21, Facebook announced that it would remove more than 5,000 ad targeting options “to help prevent misuse”. Removal of the targeted options is a way to prevent advertisers from excluding audiences based on attributes like ethnicity and religion, according to the announcement.
Facebook’s announcement came four days after the U.S. Department of Housing and Urban Development (HUD) lodged a formal complaint against Facebook for violating the Fair Housing Act by allowing landlords and home sellers to engage in housing discrimination.
What the HUD Complaint Against Facebook Says
According to HUD, Facebook enabled advertisers to control the ads specific users receive based on race, color, religion, sex, familial status, national origin, disability and location. Facebook allowed advertisers to “effectively limit housing options for these protected classes under the guise of ‘targeted advertising’,” the complaint states.
HUD alleged that Facebook violated the Fair Housing Act, partly by allowing housing ads to men or women on a selective basis. And avoiding display of ads to users interested in terms that include…
Additionally, the complaint points to discrimination against users interested in a particular place of worship, religion or tenet. Also, for not showing ads to users interested in terms like “Latin America”, “Canada”, “Southeast Asia”, “China”, “Honduras” and “Somalia”. And for withholding ads for users who live in specific zip codes.
The Social Media Platform’s Response and Facebook Ad Changes
The Facebook announcement did not list any of the specific ad-targeting options that it would remove. It stated that, for more than a year now, Facebook has been requiring advertisers of housing, employment or credit services to certify their compliance with the platform’s non-discrimination policy. Gradually, Facebook will roll out that certification to all U.S. advertisers via its Ads Manager tool.
“Advertisers will be required to complete this certification in order to continue advertising on Facebook,” according to the announcement. “We’ve designed this … in consultation with outside experts to underscore the difference between acceptable ad targeting and ad discrimination.”
According to Rick Robinson, senior vice president of state and local affairs for the Manufactured Housing Institute (MHI), one of Facebook’s goals with the new rules is to prevent “online redlining” – targeting ads in a manner that would exclude protected classes of consumers.
“We expect to see more changes to the platform as the case continues,” Robinson said.
Robinson offered more perspective from MHI on the HUD/Facebook situation, along with some suggestions for best advertising practices.
Stay Nimble in Response to Facebook Ad Changes
So, what’s a manufactured-housing retailer who advertises on Facebook to make of the platform’s ever-changing and ambiguous rules?
Gary Adamek, owner of Texas-based Fayette Country Homes, said his company had not yet responded to the latest Facebook announcement, but one of his three retail locations is already decreasing its dependence on Facebook ads – mainly because they are not as effective as they used to be.
The Fayette Country Homes store in Sealy, Texas, was the first of its locations to advertise on Facebook. Before long, the store was running large ad campaigns on the site, which caused a noticeable bump in customer traffic, Adamek said. He added, two other stores in Schulenburg and Huntsville eventually followed suit.
However, the boost in customer traffic at the Sealy store was brief. Just a couple of years ago, the store put about 85 percent of its advertising budget on Facebook ads. Today it dedicates about 30 percent of its budget toward the platform. The store is now concentrating most of its ad dollars on strategically located billboards, he said.
“I’m not sure that’s the right answer,” Adamek said, but Facebook “didn’t seem to bring people in like it used to, so we decided to start trying something else.”
Furthermore, Adamek said he is uncertain why Facebook-generated traffic slowed down at the Sealy location, but he has a theory.
“I chalk it up to everybody using Facebook for ads now,” he said. “It used to be special, but now it’s just run of the mill.”
Still, Facebook remains a big part of his company’s advertising mix. The other two locations use it more than ever, Adamek said.