Late Tuesday, the New York Times reported more details on the varying data access deals Facebook had struck with dozens of other large tech companies, such as Microsoft’s Bing, Netflix, Spotify and Apple.
Facebook’s response, from Director of Developer Platforms and Programs Konstantinos Papamiltiadis, didn’t address some of most sensitive details and said there’s nothing new here — that these have been public, that users gave permission when they signed in to partner services with their Facebook accounts (highly debatable) and that most of the features provided through the partnerships are “now gone” anyway. Another day, another Facebook privacy scandal.
There has been little indication that the seemingly endless stream of privacy scandals embroiling Facebook over the past two years has done anything to pushed advertisers away from the platform. Will this latest news cause advertisers to reconsider their ad spend on Facebook? We asked media buyers. The short answer is no.
Facebook ads continue to perform
“Our clients care more about performance marketing results than political and legal kerfuffles,” said Marty Weintraub, founder of digital agency Aimclear. “Decisions as to our media spend mix and Facebook have only to do with likely marketing results.”
Weintraub says Aimclear has yet to have a client push back on recommendations to advertise on Facebook amidst its series of scandals (going back to 2007) and that requests from brands to include Facebook in ad buys have increased, not waned.
Michelle Morgan, director of client services at digital agency Clix Marketing also doesn’t expect to see advertisers shifting budgets from Facebook in response to negative press around privacy scandals. “Although these scandals are bad for Facebook and incite a larger conversation about privacy and personal information on the internet, the bigger concern for advertisers is still around performance,” she said. “As long as Facebook Ads continue to perform well for companies, they’ll keep their advertising budgets in place.”
For most brands, Facebook has continued to deliver. “Facebook continues to be proven by performance that drives sales, conversions and engagement for brands,” said Justin Freid, executive vice president and managing director at WPP-owned CMI Media.
Loss of targeting, not scandals, is what resonates
“Reactions to scandal are much different creatures than the unnatural ebb and flow of Facebook capabilities, for advertising decisions,” said Weintraub.
In the wake of Cambridge Analytica investigations, the rollout of GDPR and other privacy scandals, Facebook made several changes to its ad platform this year. It removed audience reach estimates for custom audiences in March, for example. But the biggest change for advertisers has been the removal of third-party audience segments provided by data brokers such as Acxiom, Oracle Data Cloud (Datalogix), Epsilon and Experian.
Weintraub said the loss of targeting data, not bad publicity, has advertisers looking to other programmatic channels. “In reality,” he told me, “neutered targeting and the seemingly negative effects of third-party data lost for Facebook lookalike audiences algorithms,” are the most significant factors determining whether advertisers use Facebook, and for what purposes they use it.
“Loss of targeting is driving advertisers to greater use of programmatic platforms offering a full spectrum of third-party data partners,” explained Weintraub. “More and more we use Facebook for vertical retargeting, Custom audiences from email, engagement, etc. and zoomed out TOF [top of funnel] targeting for mass market video branding, not precision audiences. Yes, we still use Facebook some for fancy pants layered psychographic targeting. However, more and more the exact targeting we need simply doesn’t exist in Facebook. These issues are way more important than this week’s scandal.”
While there have been some high profile users who’ve left Facebook (veteran tech reporter Walt Mossberg quit earlier this week), there does not appear to be a mass user exodus yet. “I think this will continue the trend of advertisers largely ignoring Facebook’s missteps. After all, the scale is still there,” said Phillip Huynh, New York paid social lead and group media director at 360i. If users start leaving in droves, that audience loss would, of course, be felt by advertisers.
Negative brand sentiment hasn’t touched advertisers
Brands haven’t faced brand safety pressures from running ads on Facebook. And, as Weintraub said, “Also, it seems like some big companies who make a political statement by withdrawing their advertising dollars, quietly come back. Think GM.” (General Motors pulled its $10 million Facebook budget in 2012 saying the ads didn’t work, only to return less than a year later.)
Freid pointed out that the response from advertisers was very different last year when brands’ ads were reported running alongside offensive and extremist content on YouTube. “Brands took action on that almost immediately,” noted Fried. “But as long as there is an active user base on Facebook who responds to well targeted ads, the advertisers will continue to use it as a platform to engage their target audiences.”
(Several advertisers did complain publicly and pulled their budgets from YouTube — or shifted them elsewhere in Google’s portfolio — but even that was short-lived.)
Morgan said she has not seen the “negative sentiment toward Facebook’s brand trickling down to the companies on the platform,” and, with performance holding steady, there’s little incentive to retreat.
Fried touched on the separate hats marketers wear as both consumers and advertisers and echoed many of the conversations I’ve had with marketers over the past year. He said the New York Times’ latest report “needs to be looked at through two different lenses.”
As a user, Fried acknowledges there’s reason for concern. “When it comes to its user base, it is quite horrifying that a social network would allow advertisers this much access to their platform,” said Fried. “But when looking at it through an advertising lens, we are not yet at a place where brands are shutting down their campaigns, and it does not look like this issue will head that way.”
Facebook also appears to have a buffer in Instagram, where it’s seeing the fastest revenue growth. Huynh says they are keeping a close eye on usage and growth across the Facebook ecosystem and whether negative perceptions of Facebook will spread to its other properties. “We doubt this will be the case, since many people (as many as 57% according to CBS) don’t even know that Facebook owns Instagram.”
Huynh says his bigger concern is a potential government reaction to an environment in which “the negative optics surrounding the platform outweigh the actual opportunity for change.”