Dive Brief:

• BuzzFeed News recently accrued data showing that many of the top performing Facebook news stories from this past election season were drawn from fake news sites that spread hoaxes or misinformation. 
• In a contributor report for Forbes, author Peter Cohen suggests that those fake news posts could've accounted for up to half of Facebook's ad revenue during that period. Cohen points to BuzzFeed data that show fake news attracted 54.2% of shares, comments and reactions on the social network during election season, while real news only received 45.8%.  
• The Forbes report didn’t provide any exact figures on how fake news engagement translated into ad revenues for Facebook, but indicated that the number was “considerable.”

Dive Insight:

Advertising is by and far Facebook's biggest source of revenue. For brands delivering ads on Facebook, fake news sites could impact the credibility of the company once a consumer realizes the site is bogus, throwing all content delivered, including advertising, into question.

As the social media site begins to take steps to restrict fake news, this is likely to impact ad revenues, although by how much probably won't be clear until Facebook next releases quarterly financial results in January. It is also not known what steps the company might take to try to make up any lost income if traffic declines as fake news drops off. 

The issue of misinformation spread through Facebook has become increasingly pressing in the post-election season, as some industry studies have shown up to 44% of U.S. adults turn to the social network as a primary news source. CEO Mark Zuckerberg at first firmly denied his company had any role to play in influencing the election, but even as he did so, an internal team at Facebook was figuring out ways to block bad news sites from generating revenue from its Audience ad network, following a lead set by Google.  

As Cohen points out, fake news has been a huge driver of traffic for Facebook of late, and Zuckerberg might've been hesitant to condemn bad news for fear of losing the ad revenues it potentially generates. 

But the media has been quick to catch on and question Zuckerberg's stance. The CEO ultimately addressed the fake news issue again last week, reneging on his earlier denial of influence with a post outlining steps that Facebook is taking to combat misinformation.

“We believe in giving people a voice, which means erring on the side of letting people share what they want whenever possible," Zuckerberg wrote at the time. "We need to be careful not to discourage sharing of opinions or to mistakenly restrict accurate content. We do not want to be arbiters of truth ourselves, but instead rely on our community and trusted third parties.”