Social Media Advertising Risk Assessment & Management 4 — Questions and Answers
Question 1: A social media platform suddenly changes its algorithm, causing your ad ROAS to drop 60%. This is an example of which type of risk?
- Credit risk
- Platform dependency risk (Correct answer)
- Liquidity risk
- Inflation risk
Correct answer: Platform dependency risk
Platform dependency risk occurs when algorithm or policy changes by a third-party platform significantly disrupt your advertising performance.
Question 2: What is 'audience overlap' risk in social media advertising?
- Targeting audiences in multiple countries simultaneously
- Multiple ad sets competing against each other for the same users, inflating costs (Correct answer)
- Retargeting users who already purchased
- Using similar audiences that don't convert
Correct answer: Multiple ad sets competing against each other for the same users, inflating costs
Audience overlap causes your own ad sets to bid against each other in the auction, artificially raising costs and reducing efficiency.
Question 3: A data breach exposes customer PII collected through your social media lead gen ads. What is the PRIMARY risk category?
- Market risk
- Data privacy and regulatory risk (Correct answer)
- Operational efficiency risk
- Currency exchange risk
Correct answer: Data privacy and regulatory risk
Exposure of PII triggers data privacy regulations like CCPA and GDPR, creating significant legal liability and regulatory penalties.
Question 4: What is 'dark post' risk in social media advertising?
- Ads shown only at night to specific audiences
- Unpublished targeted ads that bypass public brand scrutiny and may target protected groups discriminatorily (Correct answer)
- Posts that are shadowbanned by the platform
- Ads with dark color schemes that underperform
Correct answer: Unpublished targeted ads that bypass public brand scrutiny and may target protected groups discriminatorily
Dark posts (unpublished page posts used as ads) have been used for discriminatory micro-targeting, as seen in historic political advertising controversies.
Question 5: Which risk management approach involves setting maximum daily budget caps in social ad campaigns?
- Risk avoidance
- Risk acceptance
- Risk transfer
- Risk mitigation (Correct answer)
Correct answer: Risk mitigation
Setting budget caps directly reduces potential financial loss from overspending, making it a risk mitigation (reduction) strategy.
Question 6: A negative user-generated video about your brand goes viral on TikTok during your paid campaign. What is the BEST response strategy?
- Report the video to TikTok for removal
- Pause ads, monitor sentiment, and craft a transparent public response (Correct answer)
- Launch more ads to drown out the negative content
- Ignore it since UGC doesn't affect paid performance
Correct answer: Pause ads, monitor sentiment, and craft a transparent public response
Pausing ads prevents brand association with controversy while a transparent response shows accountability and can mitigate long-term reputational damage.
Question 7: What does 'viewability risk' mean in social media advertising?
- The risk that your ad creative is visually unappealing
- The risk that ads are served but never actually seen by a human user (Correct answer)
- The risk of ad blockers removing your ads entirely
- The risk of low video completion rates
Correct answer: The risk that ads are served but never actually seen by a human user
Viewability risk means you may be charged for impressions where the ad appeared below the fold or was never in the user's visible screen area.
Social Media Advertising Risk Assessment & Management 4
A social media platform suddenly changes its algorithm, causing your ad ROAS to drop 60%.
This is an example of which type of risk?