Hulu, Roku have become hotbeds for political ads, revealing loopholes in federal election laws
The ad that interrupted some Hulu subscribers as they watched the NBC comedy “Brooklyn Nine-Nine” this month opened with a clip of President Trump speaking.
“The ‘deep state’ is trying to inject our health system with socialist price controls,” a narrator then interjected, before a banner flashed at the bottom of the screen: “TEXT ‘SOCIALISM SUCKS’ TO 41490.”
But neither FreedomWorks, the conservative group behind the ad, nor Hulu, a television-and-movie streaming giant, is required to reveal much more to the public about the 30-second spot or whom it targeted, leaving watchdogs and regulators fearful that federal election laws aren’t fit for the digital age — and that voters remain vulnerable to manipulation.
Four years after Russian agents exploited popular online platforms to push propaganda, sow unrest and promote the Trump candidacy, the U.S. government has made virtually no progress on bringing more transparency to paid political speech. The risks remain high that voters could be duped and deceived by foreign governments, U.S. candidates and advocacy groups — particularly online, where major regulatory gaps exist.
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Campaign finance experts say they are especially concerned about video-streaming services at a moment when more Americans are shifting their viewing habits from cable to the Web. Politicians have followed people online, and over the past year, their ads have appeared on popular platforms such as Roku, the maker of hardware and software that powers Internet-connected TVs, and lesser-known options like Tubi, which offers ad-supported movie streaming.
But nothing requires these fast-growing digital providers to disclose whom these ads targeted and who viewed them. The absence of federal transparency rules stands in stark contrast with traditional TV broadcasters, such as ABC, CBS, Fox and NBC, which for decades have been required to maintain limited public files about political ads.
“I’m really worried people are going to be bombarded, and not going to have the information they need to assess all of what’s coming at them,” said Meredith McGehee, the executive director of Issue One, which advocates for transparency in campaign spending.
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On Hulu, which boasts more than 30 million subscribers, political ads have become so prolific that its users have complained loudly — on the company’s public-facing forums. “I have Hulu for entertainment, not so I can be tortured with political ads,” wrote one user in January.
Beyond mere nuisance, the lack of transparency has also sparked criticism in Congress, where some lawmakers say it’s long past time to update federal laws to prevent potential abuse.
“At a time when our adversaries are using disinformation campaigns to undermine our democracy, we need to be pushing for more disclosure and transparency, not less,” Sen. Amy Klobuchar (D-Minn.), a White House hopeful, said in a statement.
Hulu declined to comment for this story, and Roku did not respond to a request for comment.
For many ethics watchdogs, the lack of visibility into online advertising reflects a broader election-year challenge: Campaigns are spending more than ever to try to reach voters and influence their decisions, armed with powerful digital tools — yet federal regulations haven’t kept pace.
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Political advertising could surpass $6 billion on television, search, social media and other digital platforms by November, according to the analytics firm eMarketer. Traditional television still captures the majority of these ad dollars, researchers said, but spending on myriad sites and services has grown exponentially as campaigns embrace fresh ways to target their messages based on a voter’s age, location or other personal traits.
The consequences of those new digital tactics became apparent in 2016, when “trolls” tied to the Russian government relied on narrowly targeted social media ads to inflame tensions around race, religion and other political fault lines. The prospect of foreign interference again looms over 2020 as voting begins, but digital experts say the more likely threat this cycle is homegrown — campaigns and their allies that peddle half-truths and outright falsehoods in ways people can’t easily discern.
Under pressure to prevent abuse, some companies have created their own ad archives. Facebook and Google-owned YouTube maintain public repositories of the posts, photos and videos that campaigns and their allies pay to promote, with limited information on whom those ads targeted and how much an advertiser spent. The archives, while often criticized for being incomplete, have still helped watchdogs identify potential wrongdoing — including efforts by Trump to pay to promote falsehoods on Facebook.
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But a wide range of other tech companies — including Hulu and similar video services — share much less about political ads, even as they reap big bucks and emerge as key battlegrounds in the presidential race.
Like much of the Web, these video portals allow political campaigns and their allies to target their messages at specific categories of viewers. A political candidate or group might create an ad buy calibrated to voters based on their geographic area, age, gender or likely socioeconomic status. The ads can be run on an individual streaming service or purchased through a third party to reach an audience that spans multiple streaming sites.
Companies such as Premion, an ad subsidiary of the Virginia-based TV conglomerate Tegna, claim to aid in such ad campaigns: It allows local and regional political advertisers to conduct “voter targeting” across more than 125 streaming services, including Tubi. Representatives for Tegna and Premion did not respond to a request for comment.
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Some streaming platforms appear to try to entice well-heeled political advertisers with the promise of near-pinpoint accuracy. Sling TV, a Web-based television offering from Dish Network, participates in an ad-selling consortium that grants campaigns “precise demographic or voter attribute targeting” on streaming and traditional television. The ad consortium, called D2 Media, did not respond to a request for comment.
Hulu, for its part, attracts advertisers with potential access to a “younger and more engaged audience” through “personalized and precise targeting,” though the company does not elaborate in materials it offers online. The FreedomWorks ad this month about the deep state, for example, was part of a “significant five-figure buy within the Beltway/DC Metro area targeting Republicans and some independents,” Peter Vicenzi, a spokesman for the group, said in an email.
Seeing an opportunity, Democratic presidential contenders also have ramped up their streaming offensive. Sen. Elizabeth Warren (D-Mass.) has spent at least $326,000 on political ads on Hulu between Nov. 1 and Dec. 31, according to a Washington Post analysis of Federal Election Commission records. A week before voters began to caucus in Iowa, former vice president Joe Biden’s campaign announced its own Hulu ad blitz. And Pete Buttigieg, the former mayor of South Bend, Ind., spent more than $100,000 to advertise on Roku in November, according to FEC spending records, along with additional ad spending on Hulu.
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Those few disclosed amounts represent only a fraction of all political ad spending on Hulu and its competitors, given the fact that many Democratic and Republican campaigns purchase ads through third parties. As a result, the total spent is not itemized fully in their FEC reports. Former New York mayor Mike Bloomberg, for example, appears to have bombarded movie-and-TV streaming sites with ads, much as he has on traditional television. His election spending reports don’t reflect his prolific approach — but frequent, loud complaints from social media users do. His campaign declined to comment.
Some portion of the $40 million digital ad campaign launched in January by Priorities USA, a Democratic super PAC, is focused on platforms including Hulu, the group previously announced. This cycle, Priorities USA expects to spend at least “seven” figures total on ads that appear on streaming services in addition to the group’s traditional television spending, according to Madeline Kriger, the group’s director of integrated media.
Still, she described the disclosure rules as a “mess,” citing the fact that the laws differ depending on where an ad actually runs.
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“It is on them entirely to make up their own rules because there’s so little regulation,” Kriger said. “The problem will not be solved until there’s an actual law to follow.”
Broadcast television, by comparison, is heavily regulated: The scarce but crucial airwaves that power radio and TV signals are government property. Decades-old rules mandate that broadcasters must keep public files indicating which candidates, campaigns and political groups run ads on their stations and the general topics those ads cover.
Members of Congress, led by Democrats Klobuchar and Sen. Mark R. Warner (Va.), have sought to transfer that approach to the Web, requiring all major websites to keep a running archive of political ads and their targets. But partisan squabbling — and at times lobbying from the tech industry — has stymied their bill, known as the Honest Ads Act, from coming to a vote. Broadcasters, meanwhile, have petitioned federal regulators in recent months for permission to disclose less about political ads, infuriating campaign finance watchdogs, who point out that voters would suffer if they knew less about who was trying to influence them.
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“It would immunize them from the disclosure requirement, which are pretty pitiful as they are,” said Angela Campbell, the co-director of the Institute for Public Representation at Georgetown Law School and a lawyer for campaign finance groups challenging the effort.
Some state lawmakers have sought to act in Washington’s place: Maryland, for one, adopted its own wide-ranging political ad law in 2018, hoping to shine more light on advertising about state and local candidates to disclose. But federal judges ruled the law unconstitutional in December, agreeing with plaintiffs in the news industry, including The Washington Post, that it violated the First Amendment by regulating speech.
The murky legal landscape even contributed to a decision by the music-streaming app Spotify earlier this year to halt all political ads. For the many services that still allow it, though, presidential candidates and their allies have found a major boon: Voters ages 18 to 29 watch less traditional television and generally distrust ads on social networking, yet take action 80 percent of the time after viewing a political ad video online, according to a study by Sling TV and Telaria, an ad tech company.
With spending on streaming increasing — and Washington seemingly sitting by idly — some lawmakers said it has resulted in serious loopholes that malicious actors could exploit.
“As we enter the full-swing of another presidential campaign,” Warner said in a statement, “greater transparency — including disclaimers on all political ads and a robust political file regime — is now more important than ever.”
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