  Facebook and other advertising platforms exploit users data for marketing
purposes by allowing advertisers to select specific users and target them (the
practice is being called micro-targeting). However, advertisers such as
Cambridge Analytica have maliciously used these targeting features to
manipulate users in the context of elections. The European Commission plans to
restrict or ban some targeting functionalities in the new European Democracy
Action Plan act to protect users from such harms. The difficulty is that we do
not know the economic impact of these restrictions on regular advertisers. In
this paper, to inform the debate, we take a first step by understanding who is
advertising on Facebook and how they use the targeting functionalities. For
this, we asked 890 U.S. users to install a monitoring tool on their browsers to
collect the ads they receive on Facebook and information about how these ads
were targeted. By matching advertisers on Facebook with their LinkedIn
profiles, we could see that 71% of advertisers are small and medium-sized
businesses with 200 employees or less, and they are responsible for 61% of ads
and 57% of ad impressions. Regarding micro-targeting, we found that only 32% of
small and medium-sized businesses and 30% of large-sized businesses
micro-target at least one of their ads. These results should not be interpreted
as micro-targeting not being useful as a marketing strategy, but rather that
advertisers prefer to outsource the micro-targeting task to ad platforms.
Indeed, Facebook is employing optimization algorithms that exploit user data to
decide which users should see what ads; which means ad platforms are performing
an algorithmic-driven micro-targeting. Hence, when setting restrictions,
legislators should take into account both the traditional advertiser-driven
micro-targeting as well as algorithmic-driven micro-targeting performed by ad
platforms.
