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Are Advertisers Doing an About-Face on Facebook?

Since the Facebook user data “scandal” broke last month, the PR storm has grown—heavily fueled by Zuckerberg’s congressional testimony—during which lawmakers grilled the 33-year-old executive on the increase of so-called fake news on Facebook, Russian interference during the 2016 presidential election and apparent censorship of conservative media. Things seemed to be reaching a breaking point for Facebook as talks of government regulation and questions about whether the network was getting too big were being broadcast from Congress, the media, and the public. The sky seemed to be falling for Facebook.

Then, exactly two weeks after Zuckerberg’s testimony, the social network reported a 49% annual increase in total revenue, with ad spend up 50% year over year. Okay, so the Cambridge Analytica story broke near the close of Q1, meaning the news didn’t have an opportunity to truly impact Facebook’s business yet. The real question though is, will it ever? Or, will this story eventually dissipate like the dozens of other high-profile “big data” and privacy infringement stories that hit mainstream media over the last few years.

The answer depends on how Facebook users react. Will they delete their accounts in droves? Doubtful. Despite the push for a #DeleteFacebook movement, Facebook users aren’t yet jumping overboard in protest of the company’s actions. Facebook has become ingrained in the social fabric of our society—it will take much more than the seemingly anonymous privacy violations before people let go of a tool that they rely on for convenience, connectivity and entertainment.

Marketers, on the other hand, are waiting to see if Facebook changes the way it uses data or how its ad products work before making decisions about how to spend marketing dollars on the platform in the future. The only real change so far—limiting access to third-party data sources on the platform—didn’t have much of an impact on more savvy marketers: We learned not to trust that data a long time ago.

As consumer trust in the practices of big tech continues to lessen and the demand for enhanced security of private user data increases, analyzing and reevaluating how a business acquires and processes personal data should be at the top of every marketer’s to-do list. That said, considering the global reach of companies like Facebook and Google, it’s unlikely that even the addition of regulation and data policy changes will drive advertising dollars elsewhere: Few platforms comes close to offering the in-depth, user-specific data they provide.

For our clients (and others like them), our recommendation is the same as it’s always been: Let results drive your media selection and allocations. However, keep in mind that results are more than just leads or sales—results can also be measured in how an ad (and its placement) influences your brand. We can’t overlook the fact that a company’s brand perception can be influenced by the public perception of the platforms and publishers where that company advertises. Facebook is obviously concerned about this issue; last month they launched the largest brand campaign in the company’s history. There’s no question Facebook is hedging their bet here—they know they need to do everything they can to protect ad revenue. While we haven’t even come close to reaching the point of measurable fallout, marketers would be wise to follow Facebook’s lead and keep a close eye on this situation—one that’s clearly focused on public perception.“

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Chief Digital Officer

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