Earlier this week $FB suffered a sharp drop to $150 before rallying, on news that several states and the FTC had initiated investigations into their role in the Cambridge Analytica affair. The #DeleteFacebook movement continues to remain visible, and Elon Musk famously deleted Tesla and SpaceX’s company pages. The litany of bad news is unrelenting, isn’t it? Advertisers must be leaving in droves, right?
Yet if you search for news on advertisers pulling out, as of today the media has managed to find only three names: Mozilla, a non-profit, auto parts dealer Pep Boys, and Germany’s Commerzbank. Of course if the news continues to get worse, more brands could still desert the social giant, but the slow trickle at this stage is indicative of how most advertisers are taking a wait-and-see attitude.
Truth is, Facebook’s wounds are self-inflicted. Any first-year PR pro will tell you never to threaten publications with lawsuits to silence them. Neither is trying to get in front of a story by banning accounts, yet not giving the full context. That’s the opposite of getting in front of the story. Waiting four days while a scandal brews before the world-famous CEO makes a public statement, not too clever either. Cavalierly allowing advertisers to access user data, that’s the biggest sin of all.
Yet why aren’t more advertisers deserting the platform?
Beyond Facebook, Instagram, Twitter and Google, there aren’t many online platforms for reaching consumers at the scale, accuracy and efficiency that digital advertisers demand today. Facebook already owns two of them, three if you believe ads will one day come to WhatsApp (I hope not). Doesn’t apply to China, of course, but that’s a different story.
Like it or not, Facebook today is an advertising platform more than it is a social network. The majority of our clients use it that way, with ad campaigns that often bypass their brand page. Fan count is already completely irrelevant as a performance metric, and engagement doesn’t resonate as much as conversion does, in this e-commerce age. Most importantly, Facebook allows you to target users precisely, track their user journeys including conversion, and offers the richest trove of insights and metrics.
But Facebook would be wrong to be complacent, and all signs point to them taking this as an existential threat. But I bet that in six months this will blow over, federal investigations notwithstanding, leaving a company that will have found a way to balance privacy concerns while satisfying advertisers’ insatiable demand for user data.
Besides, have you checked out MySpace lately? Don’t bet on there being a viable alternative to Facebook any time soon.