Why the ad industry believes Facebook is invincible

  • Facebook’s business is nearly 100% driven by advertising. SummerEven with all the negativity swirling around the company, advertisers say they have no plans to cut budgets.
  • This is because advertisers have virtually no alternative. Facebook is unprecedented in scale and its ability to deliver targeted ads using data.
  • This dynamic contrasts sharply with Google’s YouTube, where some advertisers have stayed away since some ads landed alongside hate videos on YouTube.
  • While marketers say they have other places to advertise besides video than on YouTube, cutting Facebook ads would directly hurt their business.

When the The Times of London published an article on ads from big marketers appearing alongside extremist content on YouTube earlier this year, more than 250 brands have removed their spending from Google’s video hub. Many industry executives jumped at the chance to berate Google for not doing enough to keep brands safe, with brands such as Walmart and JPMorgan Chase publicly voicing their concerns.

More than six months later, Facebook, the other half of the advertising duopoly, is drawn into a public maelstrom. Just a week after Facebook’s top lawyer testified before Congress about Russia-related ads, Facebook informed advertisers that the company discovered two new measurement errors. — the 11th and 12th such errors the company has disclosed in just over a year.

Yet even with all the negativity swirling around Facebook (including articles wondering if it’s actually good for society or not), its activity remains unscathed. Not only did the company exceed Wall Street expectations for the third quarter and report its best earnings to date, it also continues to attract advertisers, and most seem unfazed. And even those affected are not changing where they allocate their advertising budgets.

In essence, Facebook’s business is nearly invincible.

“I wouldn’t say they’re infallible, but they’re pretty insensitive to almost everything,” Kyle Bunch, general manager of social media at R/GA Austin, told Business Insider. “They’ve managed to create a remarkably effective advertising engine, and it’s hard for a marketer to exclude it from their marketing mix. »

“You just can’t shut down Facebook without hurting your brand”

Over the years, Facebook has cemented its position as an effective marketing vehicle for advertisers. Its unparalleled scale and reach have been huge draws for marketers of all sizes. So, despite the growing criticism the company is facing in the public arena, advertisers have poured even more money into it than before.

It is not difficult to understand why. With its 2 billion users, Facebook has a huge audience for advertisers to tap into. Add to that its targeting capabilities – many have argued that the very reason Russian ads and other problematic tags were possible in the first place was because Facebook is really good at hyper-targeting – and it becomes hard to ignore. .

Sheryl Sandberg shrugs on Facebook

Sheryl Sandberg

Philippe Wojazer/Reuters

“Facebook has some of the greatest minds on the planet creating tools for advertisers, which makes our money work harder,” said Laura Zhukovsky, senior vice president of media and analytics at the fashion conglomerate. online TechStyle, at Business Insider. “The reason advertisers don’t make money is because they find efficiency and scale in advertising on Facebook – that’s certainly the case for TechStyle brands.”

“Facebook is a dominant platform,” said a financial services marketing executive, who wished to remain anonymous. “You just can’t turn it off without damaging your brand.”

That’s because, for the most part, marketers have found Facebook ads to be very effective in driving business results.

“Facebook is a great tool for persuasion, period,” said an ad agency executive, speaking on condition of anonymity. “Whether you’re trying to influence people to vote a certain way or you’re selling a product, Facebook works at scale.”

“We don’t see our ads next to ISIS propaganda videos”

Advertisers believe that unlike the YouTube crisis, which directly endangered their brands’ reputations, Facebook’s role in the unexpected 2016 election outcome did not directly impact their business.

“With the Russia issue, it was something that was done with an entity that deliberately used Facebook and advertisers were not directly involved,” said Sherwin Su, director of social media activation at Essence. . “The difference with YouTube was that brands weren’t aware that their content was going to be flagged as inappropriate content.”

The financial services marketing manager agreed, saying marketers weren’t publicly connected to fake news and other harmful activities on Facebook.

“We don’t see our ads next to ISIS propaganda videos,” the executive said.

Plus, there are alternatives to YouTube, something that can’t always be said about Facebook. “Google acted as if it had the same monopoly on video with YouTube as it did on search.” says the executive. “And they don’t. You can put your videos in other places and not see the returns deteriorate.”

paw patrol youtube fake

An off-brand Paw Patrol video titled “Babies Pretend to Die Suicide” features several disturbing scenarios.


But it’s not like advertisers are letting Facebook off the hook. The holding company executive said senior publicity officials were pushing the company to turn the situation around, though it might not be out in the open.

“After the election, I called a senior Facebook executive and said they canceled the election,” the insider told Business Insider. “The response was ‘No way, we don’t have that kind of influence.’ It is clear now that they have to do better, but I am convinced that they will succeed.”

“We’re all cracking the whip,” agreed the financial services marketing manager. “Maybe it’s not as public.”

“There is no alternative”

Russia aside, Facebook has also been plagued with a slew of measurement errors, one after another. While a number of advertisers interviewed by Business Insider expressed concern over these errors, they said they had not been tough enough to change the allocation of their advertising budgets.

“It’s a concern when there have been inaccuracies or misrepresentations in the measurement,” an entertainment marketing executive said. “But it hasn’t significantly impacted how our campaigns have delivered their metrics, at least not yet.”

Some of the revelations made by Facebook include overestimating average viewing time for video ads on its platform, undercounting or overcounting a number of metrics including weekly and monthly reach of marketer posts, and more recently charge advertisers for out-of-sight video ads.

YouTube CEO Susan Wojcicki speaks on stage during the Google I/O annual developer conference in San Jose, California, U.S. May 17, 2017.

Susan Wojcicki, CEO of YouTube

Stephen Lam/Reuters

But none of these metrics are crucial to how marketers pay for Facebook ads or gauge the impact of their investments, according to Essence’s Su.

“Measurement mishaps to date are mostly vanity metrics,” he said. “If future trade-offs had a real impact on business results, it would have implications from an investment perspective.”

Marketers have also become accustomed to a certain level of risky advertising practices. “Even with the miscalculations, that’s really low compared to fraud rates on other platforms,” ​​the ad holding company executive said. “In digital advertising, you just learn to live with some ambiguity.”


advertising industry

is also pleased that Facebook has been more upfront about its mistakes while also committing to making things better.

The platform published a white paper on organized attempts to use Facebook to influence elections, for example, and agreed to an audit by the Media Rating Council. He has hired thousands of content moderators to manually report inappropriate posts and, more recently, he made disclosure necessary for all political advertisers and made advertising more transparent in general on its platform.

“They were very transparent and proactive,” Su said. “They’ve been good partners and have described what they’re doing to solve the problems they uncover.”

Ultimately, there’s simply no better alternative to Facebook — or at least the Duopoly — according to R/GA’s Bunch.

“Most marketers look at data in a closed loop — they know exactly what Facebook is driving in terms of actual sales,” he said. “Where are you going to invent this if you give up on Facebook? Google? That’s probably the only other alternative.”


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