How media buyers are reacting to Facebook's drama: 'spread your risks and ad dollars'
What a week already for Facebook. Its nearly six-hour outage of Facebook, Instagram and WhatsApp on Monday cost the company an estimated $79m in lost ad dollars. The blackout came on the tails of stinging accusations by whistleblower Frances Haugen on 60 Minutes and mere weeks after a Wall Street Journal story alleged that insider documents suggest Facebook knows about the negative effects of its platforms on mental health. Today, as Haugen testifies before the US Senate, The Drum checks in with media experts about the impact of these events on ad dollars.
On what media buyers should be thinking about today
“Spread your risks and advertising dollars. Facebook offers many attractive avenues for marketers and media buyers and there is still a difference between the popular resistance against Facebook here in North America and its global reach and value proposition. The latter is still very much intact and seeing Facebook as an immoral brand is also a privileged minority view exclusive to a select few observers in the global North — meaning: Facebook is still growing in many other countries. The real opportunities for growth these days still lie with Facebook and also elsewhere, with platforms and experiences that engage more organically and effectively including Snapchat and TikTok.” -Markus Giesler, consumer researcher and associate professor of marketing at the Schulich School of Business at York University
“Advertisers — buyers and planners — have long talked about their frustration with the walled gardens but have done little about moving their money. Might this finally be the moment we see a major shift of spending off of Facebook? The reality is that if the top 200+ brand advertisers shifted their money off of Facebook, while it would damage perception, it wouldn't ultimately meaningfully affect Facebook's bottom line.” -Val Bischak, general manager and head of growth at Amobee
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Media experts say it might be time to shift ad dollars to other platforms
“If I was a brand, I would be thinking about two things: one, do I want my brand on a platform and in an environment where the algorithms are optimizing toward strong negative content? Is that the context that I want to put my brand in? And two, is it true to my brand to take a larger position about the impact Facebook is having on society and how do I want to express that position?” -Kasha Cacy, chief executive officer at Engine
“Facebook represents a huge chunk of advertisers’ spend and the downstream effects for app advertisers directly will be pretty large for that time period. I don't think it makes sense to immediately shift budgets to another channel. Sure, there may have been a good number of bored people out there that decided to see what was on TikTok for instance today after six hours of not being able to access Facebook properties, but...it might make more sense to see what is happening on competing networks first and pull back budget for a few days to monitor what is going on.” -Levi Matkins, chief executive officer at LifeStreet
“Marketers should be taking a balanced and comprehensive approach to advertising. Not only in times of crisis, but as a general rule, you shouldn’t over-index too much on any one channel, publisher or app. Omnichannel planning and execution both protects against disruption from unforeseen events like platform outages and gives you the opportunity to continually identify and optimize areas of high performance. Likewise, while platforms can often constitute walled gardens to an extent, advertising technology can and should be independent of media ownership. Managing campaigns from a central point of control with insight into the various placements that your marketing efforts work across means that you can work with the broader ecosystem, even employing automation to maximize your returns, rather than feeling trapped by it.” -Aaron Goldman, chief marketing officer at Mediaocean
“Facebook is one of the primary weapons in an advertiser’s inventory due to its size, daily active users and the depth of its audience targeting. Advertisers will be understandably hesitant to reassign their budgets to other platforms entirely, as they will struggle to fully replace the engagement and reach they enjoy on the platform. However, there is no mistaking there is uncertainty on the horizon and good advertisers will be levelling up other channels in preparation for the unknown. This could be a massive blow to global ad spend on the platform.” -Josh Turbill, social and digital director at Hotwire Global
"Marketers are on a good path. They understand the growing importance of selecting partners who are committed to consumer privacy, brand safety and verified (not to mention incremental) return on investment. The events of this week only makes those smart decisions even more pressing. It's incumbent on [adtech companies]...to provide trusted, scaled, viable alternatives to spending more in the walled gardens, giving marketers the confidence of knowing their ad spend is making real, positive, impact.” -Ross McNab, president of North America advertising at Cardlytics
"Marketers should be assessing whether any given media owner is a partner they want to work with. Some may not particularly care about the partner because they don’t think they borrow any of that partner’s brand equity when they do, and only care about the audience wherever the audience chooses to be. Other marketers may run their businesses while constantly considering the broader social context in which they exist, and those marketers need to account for the impact their partners have on the world, and then decide to work with those partners or not based on whether or not they share values. Underpinning all of this, every marketers should always have a credible alternative to walk away from any given media owner — a next-best alternative for purposes of accomplishing the goals the marketer has. Marketers who don’t establish those alternatives will end up less satisfied with the partners they have if the partners end up making decisions the marketer is unhappy with." -Brian Wieser, global president of business intelligence at GroupM
On what all the drama means for Facebook’s future
“No organization is ever too big to fail, and in fact, Facebook is much more vulnerable than we might think. It has to do with the culture and organizational decision-making but also with public perceptions. Its dominance — and the dominance of its algorithm — is its curse. At the core of the problem is that Facebook needs to continue to grow and grow fast enough, which forces their management to explore ever-new avenues for market creation, all of this against growing public scrutiny. When you reach a certain status as an organization — and we’ve seen this with really large and influential organizations such as General Motors and Microsoft — criticism against you can become synergistic and various anti-Facebook mindsets (like lawmakers, advocacy groups, advertisers, consumers, etc.) can grow to what we in marketing call a doppelganger brand image — negative images and meanings about a brand that circulate in popular culture. That’s arguably what is currently happening, and this is not something that can be easily fixed.” -Markus Giesler, consumer researcher and associate professor of marketing at the Schulich School of Business at York University
“Crisis? Where? Are users leaving the platforms? Are employees leaving Facebook and giving up their stock options? No. The company is facing real issues and serious concerns regarding what it does with our data. But there is no one to confront Facebook.” -Cyril Coste, founder and chief digital officer at Digital and Growth
“Due to its size and scale, Facebook isn’t new to crisis. They have experienced worse when the organization weathered a major data and privacy crisis because of the Cambridge Analytica storm that ultimately led to the CEO appearing in front of Congress. What’s different here is just how many fronts Facebook is battling. Tech giants Apple and Google are threatening their main source of revenue with changes to how they handle third-party cookies and tracking, and they’re also facing heat from governments and policymakers around the world who are finally catching up with big tech and seeking to narrow the freedoms and powers Facebook has enjoyed to date. But Facebook has had an uncanny ability in the past to identify and navigate challenges that lay ahead of them. They are well-placed to face their current challenges head-on and become recognized as a force for good — championing mental health, privacy and security online. However, this has to date been in conflict with their source of income: data. Unfortunately, in a sea of political and moral challenges it is the threat to Facebook’s income that will be the biggest motivator for Facebook to shift and innovate. Now more than ever, that threat is real and will force their hand.” -Josh Turbill, social and digital director at Hotwire Global
"The drama is a continuation of a story that has been playing out since at least mid-2016 when measurement errors and awareness of interference in elections became evidence of problems. To the extent that problems have worsened — or awareness of problems have become more significant — the company has essentially been immersed in a permanent state of drama, if not occasional crisis. However, the company continues to rely on its users who mostly continue to come back to their platforms which is ultimately what sustains them." -Brian Wieser, global president of business intelligence at GroupM
“Facebook is a huge force in the market and marketers depend on its platforms for reach and for driving product demand, so it is unlikely that this is a terminal blow. I do think they will face increasing pressure to fix these issues. Right now, nobody is really holding them accountable, but that will change. And when brands and regulators start putting more pressure on them, they will be forced to fix this area of their business. The biggest threat [to Facebook’s success] right now is that brands start to pull back marketing spend until Facebook can demonstrate that they are taking this problem seriously and address it. This happened with YouTube when it came to light that brand ads were appearing in and around violent, extremist videos. To Google’s credit, they took it very seriously, they were very transparent with agencies and brands about how big the problem was. They implemented multiple, systemic changes to fix it and then were transparent about progress they were and were not making. Facebook is going to have to go down a similar road to earn back the trust of marketers and agencies.” -Kasha Cacy, chief executive officer at Engine
“The crisis that Facebook is currently facing is real. I don’t think many people would sincerely deny that and it’s clearly something that Facebook is conscious of, too. The business’s astonishing scale means that significant challenges come with the territory, though, and this wasn’t the first and won’t be the last problem Facebook needs to overcome. It’s important to remember that stakeholders, from businesses to users — and even those blowing the whistle inside the company — get value out of Facebook and don’t particularly want it to fail. What they do want is change. This, too, is something that Facebook has recognized, though it’s not clear that the business has pursued change with the speed and transparency that would be needed to satisfy its critics. That said, rather than calling for boycotts or celebrating outages, the path forward is to spotlight open, constructive conversations about the platform — and social media more broadly — with an understanding that there is no quick fix and progress will take real work.” -Aaron Goldman, chief marketing officer at Mediaocean