The U.S. Department of Housing and Urban Development (HUD) formally announced charges against social media giant Facebook on Thursday for discrimination over its online advertising program.
Ben Carson | Credit: HUD
The official complaint details the depths of the alleged discriminatory practices during every phase of creating an ad. The charges are causing some companies to re-examine their marketing practices, while many in the industry are placing the blame on the individuals that took out these ads.
“Facebook is discriminating against people based upon who they are and where they live,” HUD Secretary Ben Carson said on Twitter. “Using a computer to limit a person’s housing choices can be just as discriminatory as slamming a door in someone’s face.”
How discriminatory were Facebook’s ad targeting practices?
During the ad targeting phase, advertisers were given tools to draw red lines around an area to exclude potential targets. The practice both figuratively and literally calls back to the days of redlining, a discriminatory practice where residents of certain areas were denied financial services like mortgages.
Advertisers were offered thousands of attributes to choose from to exclude based on user data collected by Facebook. Those attributes, according to the complaint, included, “women in the workforce,” “moms of grade school kids,” “foreigners,” “Puerto Rico Islanders,” or people interested in “parenting,” “accessibility,” “service animal,” “Hijab Fashion,” or “Hispanic Culture.”
They could also target specific groups with ads, like, “Christians,” or “child-free.”
When determining who to target with ads, there were actually price differentials between men and women, according to an archived Facebook page obtained by HUD.
“If there are more and cheaper opportunities among men than women, then we’d automatically spend more of your overall budget on the men in the larger target audience of your single ad set,” the page reads. “However, if you use two ad sets instead, you may spend all of the smaller budget of the ad set targeting men before you can take advantage of all the opportunities that otherwise would’ve been available. Instead, part of your overall budget will be spent less efficiently on fewer and more expensive opportunities with women.”
How can brokerages ensure they are compliant?
At least one real estate tech startup is making changes to their targeted marketing platform in the wake of the decision.
MoxiWorks CEO York Baur | Credit: MoxiWorks
MoxiWorks, a real estate tech startup that offers brokerages and agents with marketing solutions, a customer relationship management tool and other backend management services, confirmed to Inman it’s making some changes.
“With the newest rulings on social media advertising, MoxiWorks is implementing changes to our ad feature, Promote, to ensure our agents are not liable for any Fair Housing Act violations,” a spokesperson for the company told Inman. “The streamlined, three-step ad creation flow of Promote allows agents to select a limited number of audience options, while automation optimizes ads for the best possible reach – all within the acceptable use cases outlined by the FHA.”
Promote will soon enable agents to take advantage of specific sanctioned types of audience targeting, so an agent can’t even accidentally violate the Fair Housing Act (FHA) by targeting or not targeting demographics protected by the FHA.
“Whether state real estate law is passed, new MLS rules are put in place, or higher standards are placed on social media advertising, MoxiWorks will always evolve our products to protect our agents and their clients,” the spokesperson told Inman.
Compass, one of the biggest real estate brokerages in the country, also offers its own proprietary marketing tool.
Kim Ward Bacso | Credit: Zillow
A source at Compass told Inman that internally, the company has a marketing team which ensures that ads are compliant with FHA standards. Agents that come to Compass are usually doing so because of the services offered – like the marketing center – and the company encourages agents to use the tools.
Kim Ward Bacso, the broker-owner of River Valley Realty in New Jersey said she spot checks every agent’s targeted advertising and asks them to print out the criteria for their most recent posts.
“The only thing I tell them they can select criteria on is geography,” Basco said, on Inman Coast to Coast. “Everything else needs to be defaulted to 18 plus for age (when you can sign a legal contract in my state) and no other targets.”
Are agents and brokers at fault?
Despite Facebook giving agents and brokerages the options at one point in time to target their advertisements this way, many in the industry still believe the onus should fall on the individuals actually creating and sending the ads. Many believe Facebook is just the scapegoat for an industry issue.
“Someone, an actual person who works for or with a real estate entity actually has to choose those options to target,” Phil Osborne, the vice president of product at the branding firm Ruckus said, in a comment on the Inman News Facebook page. “It is the real estate brokerage that should be held liable.”
“You don’t charge the gun with murder,” Jennifer Gruber, director of digital strategy at HomeServices of Nebraska added. “You charge the person who fired it. Facebook is no different. It’s a platform. Hold those who use it illegally responsible.
Mario Deniz | Credit: realtor.com
Mario Deniz, a Realtor with Preferred Real Estate Brokers in Florida, believes Facebook should have been held at fault for their targeting preferences.
“Any licensed Agent would be held to a very high standard if we were found with a database based on the criteria outlined, agents should applaud the effort that sends a signal to [Silicon Valley] that if you want to play in the real estate world you have to do so with the same rules we all have,” Deniz said.
Leslie Ebersole
Leslie Ebersole, a real estate broker with Baird & Warner, shared an anecdote about just how “awful” Facebook’s targeting advertisement preferences can be on Inman Coast to Coast.
“A broker infuriated me when he showed me all the filters on his ads – by location, by age, by sex and marital status,” Ebersole wrote on Coast to Coast. “He was entirely sincere when he said ‘but I don’t want single women in their 50s to see the ad, why should I pay for it.’ Needless to say, I was beyond miffed.”
