Social Media Advertising Risk Assessment & Management 3 — Questions and Answers
Question 1: What is 'click fraud' in social media advertising and why is it a risk?
- Users clicking your ad but not converting, wasting budget
- Bots or competitors fraudulently clicking ads to drain your budget (Correct answer)
- Accidentally clicking your own ads during preview
- Clicking the wrong ad format in the campaign builder
Correct answer: Bots or competitors fraudulently clicking ads to drain your budget
Click fraud involves automated bots or malicious actors clicking ads to exhaust your budget without any genuine purchase intent.
Question 2: A social media ad campaign collects user data without proper consent disclosures. Which regulation is MOST likely violated in the US context?
- HIPAA
- CCPA (California Consumer Privacy Act) (Correct answer)
- OSHA
- FDIC regulations
Correct answer: CCPA (California Consumer Privacy Act)
The CCPA requires businesses to disclose data collection practices and give California consumers the right to opt out.
Question 3: What risk management strategy involves spreading ad spend across multiple social platforms?
- Concentration risk
- Diversification (Correct answer)
- Hedging
- Arbitrage
Correct answer: Diversification
Diversifying across platforms reduces dependence on any single channel, protecting campaigns from platform-specific outages or policy changes.
Question 4: An influencer your brand hired for a paid partnership fails to disclose the sponsorship. Who bears legal risk under FTC guidelines?
- Only the influencer
- Only the social media platform
- Both the brand and the influencer (Correct answer)
- The advertising agency exclusively
Correct answer: Both the brand and the influencer
FTC guidelines hold both the brand (advertiser) and the influencer responsible for proper sponsorship disclosure in paid partnerships.
Question 5: What is the purpose of a social media advertising 'kill switch' protocol?
- To automatically increase bids during peak hours
- To instantly pause all ads in a crisis or PR emergency (Correct answer)
- To delete underperforming ad sets
- To block competitor ads from appearing
Correct answer: To instantly pause all ads in a crisis or PR emergency
A kill switch protocol allows teams to immediately halt all advertising activity during emergencies to prevent reputational or financial damage.
Question 6: Which of the following is an example of supply chain risk in social media advertising?
- A target audience segment becoming too small
- A third-party ad tech vendor suffering a data breach (Correct answer)
- Your creative assets not rendering correctly
- Low organic reach on your brand page
Correct answer: A third-party ad tech vendor suffering a data breach
Relying on third-party ad tech vendors introduces supply chain risk, as their data breaches or outages directly impact your campaign operations.
Question 7: Why is it risky to use stock imagery of real-looking people in social ads without proper licensing?
- It increases CPC
- It may violate model release agreements and lead to lawsuits (Correct answer)
- It reduces ad quality score
- It triggers platform auto-rejection
Correct answer: It may violate model release agreements and lead to lawsuits
Using images of people without proper model release licenses can result in legal claims from the individuals depicted or stock image owners.
Social Media Advertising Risk Assessment & Management 3
What is 'click fraud' in social media advertising and why is it a risk?