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How much are marketers still spending on Facebook?

Facebook Credit Christophe Morin:Bloomberg


How much are marketers still spending on Facebook?

Though marketers such as Mozilla and Pep Boys have said they’re pulling spending on Facebook ads at least for now, advertisers across the board are more likely to keep buying there. They’re giving the social network the benefit of the doubt, calculating that its problems won’t taint them or both.

“We at Clorox stand by Facebook as an essential partner in building our brands,” Clorox Co. Chief Marketing Officer Eric Reynolds said in a statement. “We feel good about the steps Facebook is taking to protect people’s privacy and security and are confident it will continue to be aggressive in honoring its commitments to the Facebook community of advertisers and users above all else.”

Facebook has done “soul-searching” both over the last year and since the Cambridge Analytica reports came out this month, Reynolds says. Clorox trusts this will “galvanize the company to increase security further and safeguard people’s information on the platform it built with great love and care so it can be a force for good.”

Johnson & Johnson, another major marketer, likewise says it will maintain its Facebook spending.

ALSO READ: Data privacy is not the only reason people are leaving Facebook

It’s a sharp contrast with the reaction last year when reporters discovered that YouTube was serving ads on offensive videos. Marketers including J&J, Procter & Gamble, AT&T, Verizon and PepsiCo quickly said they were freezing their ad spending on the platform. Part of the difference seems to be the unsettled nature of digital privacy.

It could have been anyone

Brad Jakeman, a consultant who was president of PepsiCo’s global beverage group during the YouTube ad revolt, says he believes what happened to Facebook could technically happen anywhere.

“A lot of what’s going on now has to do with the moment in time we’re at, where brands and consumers are learning a lot more about how the internet and how advertising on the internet works,” Jakeman says. “It feels like every month brings with it a new tranche of issues … Unfortunately, I think this is the time in which we live and the complexity of a world where we’re publishing data. I think it is terrific that these issues are being surfaced.”

Jakeman says he wishes there wasn’t such a huge rush to blame Facebook, suggesting that industry players should put collective energy into making sure consumer privacy is better protected.

The New York Times and others reported March 17 that Cambridge Analytica, a data marketing firm, had used improperly-obtained data on more than 50 million Facebook users to pursue its work. It got the data from a psychology professor who built a Facebook app for the purpose but disguised it as an academic effort, the Times reported.

READ: Is it too late for Facebook to start auditing developers?

“Facebook is getting critiqued and criticized for not taking a level of action that quite frankly may have gone beyond what was normally expected,” Jakeman says. “Rather than everybody pile on and demonize Facebook, can we all just as an industry say, if it happened to Facebook, it could happen to any platform. It could happen to any brand associated with that platform.”

Jason Kint, CEO of Digital Content Next, a trade group representing publishers, takes a harder line, arguing that Facebook continues to damage trust in digital media. Facebook should stop collecting data outside of its websites and apps, he says.

“Their actions harm advertising and publishing brands who do business with them and thereby consumers who come to their sites,” Kint said in an email to Ad Age. “We must work together to restore consumer and advertiser trust with transparency and real consumer choice.”

The Association of National Advertisers says it appreciates Facebook’s steps since the Cambridge Analytica news broke but that the industry as a whole needs to examine its direction.

“In truth, the Cambridge Analytica controversy is greater than Facebook alone,” the ANA said in a statement Thursday. “It’s a brand reputation and data security risk for every ANA member that advertises and monetizes brands on online and mobile outlets. The ANA and its members need to see the continued demonstrations of good faith that Facebook has put forward in recent days. Now is the time to earn back the trust of consumers and brands. There really is no other choice.”

ALSO READ: Facebook’s Carolyn Everson goes on the defensive

“Walled gardens,” as dominant platforms such as Facebook are often described, do need “greater sunlight,” according to the ANA. But rather than pulling ads from Facebook, the ANA suggests that the whole ad ecosystem should “systematically ‘report back’ to consumers what advertisers know and what choices consumers have to protect their privacy.”

What’s the alternative?

Some marketers are watching to see whether the “#deleteFacebook” movement gains steam or a Federal Trade Commission inquiry leads to anything. But for the foreseeable future, Facebook will remain so powerful that even marketers that might rather step away would be hard-pressed to find alternatives.

“As a marketer, when I’m weighing the downsides like this of working with Facebook versus the upsides, I can genuinely say the good far outweighs the bad,” Jakeman says.

Just a few days ago, Facebook said it would remove ad targeting options that relied on consumer data from outside companies such as Acxiom, Oracle Data Cloud and Epsilon, a move that it cast as shoring up user privacy. “This product enables third-party data providers to offer their targeting directly on Facebook,” a spokeswoman said. “While this is common industry practice, we believe this step, winding down over the next six months, will help improve people’s privacy on Facebook.”

While it may have been a necessary change, it won’t dent Facebook’s dominance, one agency executive said, speaking on condition of anonymity to discuss business partners. “Regarding advertising performance on FB, it will hurt a little in the short term as some advertiser ROIs may diminish and therefore their spends will too,” the agency executive said in an email, referring to advertisers’ return on their investment. “But longer term, FB will probably figure out how to replace it with their own data and find a way to not let third parties profit off of their audiences.”

“It is still the second biggest media platform in the world and a very hard spend to replace in a digital media plan,” the executive added.

Facebook’s own data and the use of areas like machine learning might be strong enough that the third-party data isn’t even necessary, agrees Ari Lightman, professor of digital media and marketing at Carnegie Mellon University’s Heinz College.

“Yeah, they’re pulling some of the partner programs associated with getting data from third-party brokers, but so what?” Lightman says. “A lot of advertisers want to have this holistic view of their consumer both offline and online, and that’s the holy grail capturing both of them together.”

REVEALED: Is Facebook reading your messages?

But “Facebook can mine its own internal data,” he says. “It doesn’t need other data brokers. It’s still a very valuable source of information for targeting for advertisers, even without the third-party data broker connections.”

Keeping watch

Marketers are nonetheless keeping an eye out for further fallout: Some say they’re watching the #deleteFacebook movement to see if it yields any meaningful drop in users. R/GA, using Crimson Hexagon, said this week it had seen about 450,000 #deleteFacebook posts on social media between March 17th and the 25th, primarily on Twitter. But those messages, of course, don’t necessarily correspond to how many people have actually deactivated their accounts. And the trend might be slowing down: Wednesday, March 21, saw 100,000 such posts; Sunday the 25th only had 28,000.

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