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Will Facebook chip away at its walled garden to restore advertiser trust?


By The Drum Reporters, Editorial team

January 31, 2017 | 11 min read

This article was originally published on 18 November, 2016. It has been republished in light of Procter & Gamble's chief brand officer Marc Pritchard's comments on the standard of transparency in the online media space.

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Will Facebook chip away at its walled garden to restore advertiser trust?

As trust in Facebook’s accountability to advertisers wobbles, the social network is learning to be more transparent but that doesn’t mean it will be less protective of its data and offer the cross-measurement with other ecosystems that most marketers crave.

Too much is at stake for the online behemoth to completely topple its walled garden. By erecting a closed marketpace around its user data, Facebook can funnel ad spend through its media networks, convincing advertisers to use its technology to purchase its inventory. Aside from the potential conflict of interest of such an arrangement - which Facebook disputes – there’s an argument from some parts of the industry that the grass is greener behind the social network’s walled garden because of the richness of data there.

It might not be what big brands like Nestle want to hear and yet it’s clear from Facebook’s public posturing of “increased third party measurement” where it sees the real threat. The miscalculations did not impact commercial transactions between Facebook and its partners, but they would have contributed to how the latter managed their resources with and around the social network. Indeed, most agencies The Drum interviewed for this article noted minimal discrepancies for the most part and added that when issues have arisen Facebook has responded quickly and in a transparent fashion.

Having the trust of advertisers is key for a business that shields its data behind a walled garden but something had to give once it became clear that the same protected data might not always be correctly reported. It’s why it started an audit to review its metrics as soon as the issue first came to light in September and its why it vowed to be more transparent about errors after that investigation unearthed more issues. Add to that the formation of a measurement council to give confidence to clients and it’s clear that Facebook has shifted from the initial stance it took upon first entering the ad tech market with the Atlas proposition in 2014.

For a company expected to earn $17bn this year, retaining the confidence of its advertisers is paramount to fulfilling its expected future position as the leader in attracting brand advertising dollars.

"Facebook's measurement glitches do not show malicious intent, nor do they undermine the legitimacy of the platform; they simply highlight that no one is perfect, not even Facebook,” explains Mel Stern, media communications director at creative shop Walrus

“But we knew this already, which is why independent, third party measurement is the rule, and Facebook’s first party “walled garden” has been the exception. While this had put Facebook at odds with agencies, their announcement today of ComScore and Nielsen partnerships for Q1’17 (in addition to existing partnerships with Moat and IAS) signals that marketers will finally get the type of measurement they've always wanted in Facebook's platform."

Whether that happens remains to be seen, but the initial reaction to Facebook clarifying metrics and seeking input from customers has been one of optimism. WPP boss Sir Martin Sorrell, a known critic of how protective of its data the social network has been, mused that its “dam has been breached”, while Danny Hopwood, vice president of solutions and platforms operations for EMEA at Publicis Media, says “Facebook is learning iteratively that it can’t prescribe the success metric”.

“They’re definitely more open to third-party measurement, but I still feel that they’re doing it to their own benefit, which is going to be pretty obvious,” he continued. Although, he did on to voice some doubt as to whether they represented 100 per cent transparency in terms of cross-measurement with advertising performance on other platforms.

“I doubt you’ll be able to take this data and match it to see it across Google and Facebook … For instance, I doubt you’ll be able to look through the lens of Nielsen Catalina at both Facebook and Google. I think you’ll only be able to look at Facebook … you unlikely to be able to compare them both.”

While having that holistic view is every marketer’s dream, Facebook’s metric miscalculations and subsequent reforms point to more pressing concerns around the viewability and verification of impressions. Most of the time an advertiser is buying an optimised CPM from the social network and so what little third party measurement it has allowed in the past has been used to see the marginalised differences between Facenook reports and own site activity and click actions.

Or as Darin Brown, chief executive for WPP digital outfit’s Possible’s EMEA business, puts it: “Facebook could stimulate greater demand for its advertising products by allowing advertisers to access more analytics, see the results and prove its monetary worth. ie increase cost per thousand. If I am in the market for buying shoes for my multiple appendages, I’d like to try them on first, no?”

It's a big part of why many brands are starting to ask whether they have overinvested in digital. Sorrell first posed the question in the wake of Procter & Gamble’s admission that it went too far in targeting consumers on Facebook and in the months since senior marketers from Royal Bank of Scotland (RBS), L’Oreal, Aviva and more have revealed similar concerns, which were all but proven when Facebook first admitted it had overstated its video views for two years in September.

But rather than spark a mass exodus in ad spend from Facebook – the social network is too big to be ignored – the threat to its coffers lies in how advertisers might change the way they use it due to the doubts they might have in its metrics. For example, organic reach metrics may have influenced what advertisers think is possible from paid campaigns should enough resources be expended; for publishers, the choice to prioritise working with Facebook for Instant Articles (which was also found to have misreported metrics) versus not could have been influenced; for app developers, a myriad of choices could be influenced by the data they work with.

Third party, independent measurement partners are the first line of defence in assuring standard measurement practices, but they are not enough, argues Yannis Kotziagkiaouridis, global chief analytics officer at Wunderman. He stresses the need for marketers to take more responsibility for their media and assume a “much deeper understanding of how metrics are collected and calculated”. There’s a fundamental disconnect between trying to measure everything versus truly understanding what drives ROI for the brand that too few marketers have a grip on.

"The trust surrounding viewability is more cut and dry for a performance marketer when the ultimate goal is a conversion," said James Shaw, mobile director at Roast. "That said, It's important for all marketers to scrutinise Facebook data in-line with internal numbers because, ultimately, that's what we are measured on."

This understanding (or lack of for many marketers) was for all too see from the discussion around Facebook’s initial revelations in the summer. Looking at the media coverage and discussions the issue caused, observers would be forgiven for thinking Facebook had been caught trying to deliberately mislead the industry. In short, the Average Duration of Video was defined as “total time spent watching a video divided by the total number of people who have played the video”, while in reality the metric actually tracked “the total time spent watching a video divided by only the number of people who have viewed a video for three or more seconds”. Given all the criticisms of Facebook’s apparent opaqueness, part of the issue is arguably that marketers did not actually know what it counted as a “view” in the first place.

As far the industry goes with digital media this year, “I think trust has been an overarching theme, right?,” asks Anne DiNapoli, director of paid social and digital media at 22squared.

“When we talk about viewability and when we talk about everything that's happened with the programmatic discussions, I think clients are demanding more and more transparency. I think that's one of the things that, obviously, us being independent, we've always kind of prided ourselves on, because we are so transparent. So in September when the initial video view discussion came up we were ahead of it for our clients. We put together an agency-wide POV. I think that again because we partner so closely with Facebook and I think we understand that space so much, it wasn't really a huge issue for our clients to date, because we were very transparent with them. Knowing that it was that three second view.”

For those brands that can scrutinise Facebook such as Nestle’s Nescafe, the social network is delivering value. Last month, Facebook emerged as the most popular platform – beating YouTube and Twitter’s Periscope – for a campaign that saw three million out of 15 million people watch it on its Live platform. Interestingly, the brand’s head of global integrated marketing, Michael Chrisment, plans to spend around a quarter of the campaign's total spend with Facebook on a retargeting ads directing them to purchase in a bid to tie the activity to sales growth.

For all those pragmatists that will look to exploit Facebook’s heightened appreciation for third party measurement, there will be some media experts who need more convincing.

Blaine Lifton, chief executive at agency Hyperbolous, commented, "It’s ironic that Facebook and other digital platforms were supposed to be the shining examples of excruciatingly precise metrics but, instead, seem to be suffering from the same deficiency as offline media. Advertisers in traditional media have forever bemoaned the fact that they don’t know exactly who is receiving their message and the impact it’s having. Apparently, the same mystery seems to be clouding the digital world. On the other hand, it probably was some kind of error, human or otherwise. Unfortunately, digital technology set the bar for accuracy in metrics pretty high. This looks like a classic case of “collateral damage”, with the victims being brands, advertisers and, of course, social media."

Discussions like this are happening at the worst possible time for Facebook; earlier this month, the social network warned growth in advertising revenues will slow “meaningfully” in the next few months as it nears the number of ads it can show in people’s timelines.

“As we slow ad load growth, we’re going to have a slowing on revenue as well,” said David Wehner, the company’s chief financial officer at the time. However, he assured that changes could be made to offset any expected knock to revenue. It’s easy to see how third party measurement could be part of a wider riposte. After all, brands will always pay more for better quality and better effectiveness.

Reporting by Seb Joseph, Doug Zanger, Minda Smiley and Ronan Shields.

The Drum's Programmatic Punch conference hosted in London on December 8 will address the disruption to traditional media models posed by the emergence of automated marketing technologies

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