“Data-Driven Thinking” is written by members of the media neighborhood and includes fresh concepts on the digital transformation in media..
Todays column is composed by Allison Schiff, managing editor at AdExchanger. Its part of a series of viewpoints from AdExchangers editorial team.
A vortex of bad news is swirling around Facebook.
First, there was last months 10-part “Facebook Files” investigation in The Wall Street Journal based on a leak of details by a then-anonymous source and previous Facebook worker.
The whistleblower, Frances Haugen, revealed her identity on 60 Minutes in early October after submitting a grievance versus Facebook with the Securities and Exchange Commission.
However Haugen had more to share.
Over the past couple of weeks, she testified in front of Congress, flew to the UK to do the same before Parliament and shared tens of thousands of pages of redacted internal Facebook files– the exact same product she committed Congress and the SEC– with more than a lots news outlets in the US and a consortium of publishers in Europe.
Beginning on late Friday afternoon and into Monday, a semi-coordinated blitz of more than 50 negative stories based upon these documents, called “The Facebook Papers,” struck the home pages of CNN, the Financial Times, The New York Times, Le Monde, The Atlantic, NPR, Reuters and various other publications. The pieces contained new information about Facebooks inactiveness on the spread of false information throughout the months leading up to the US governmental election, its inefficient response to the January 6 Capitol riot and its ongoing failure to successfully moderate material in non-English speaking countries, typically with alarming effects.
Oh, and a second whistleblower and previous Facebook employee, still confidential for now, advance on Friday with allegations that seem to prove everything Haugen has actually been saying.
And yet, although Mark Zuckerberg began Facebooks 3rd quarter incomes call on Monday afternoon with an impassioned defense of his dorm-room creation, not one investor had a single question about any of this.
Almost every question was related to the measurement problems Facebook is grappling with as a result of Apples personal privacy changes on iOS.
The factor for Wall Streets particular focus is basic. Facebook makes money by selling targeted advertising, and Facebooks ability to target ads to users and precisely measure the outcomes is under risk.
Investors are alarmed not due to the fact that Facebooks credibility is sunk so deep in the mud itll need a compass (not an ethical one) to discover its escape, however since signal loss and attribution problems are the only things that will cause marketers to cut their costs on Facebook.
The fact is, its already been shown that ethical outrage has no effect on media purchasing. If it did, in 2015s marketer boycott of Facebook would not have actually ended the method the world likely will (based on T. S. Eliot, a minimum of), not with a bang but a whimper.
This is not to state that hard-hitting investigative journalism isnt essential, that the fourth estate cant hold power to speak and account truth to power– or that whistleblowers are just whistling in the wind.
But a business like Facebook can absorb abuse– and media dollars– so long as advertisers continue to spend. Possibly its an obvious point, but it bears duplicating.
Facebook is not encased in Teflon. Reputational damage from negative headings is genuine and brings in unwanted federal government attention.
However if Facebook can kludge together a measurement fix in the short-term to handle its attribution problem, advertisers will remain. Sheryl Sandberg told investors on Monday that Facebook will likely be able to address over half of its iOS-related underreporting by the end of the year. Facebook likewise has strategies to establish more robust measurement solutions next year and for the long term.
What about scale? The Facebook Papers reveal a company having a hard time to draw in and keep young users. According to reporting by The Verge, the variety of teenage users of the primary Facebook app in the US was down by 13% in between 2019 and 2020 with a forecasted drop of 45% over the next two years. And Facebooks own internal research study shows that although Instagram is still popular with young adults, theyre beginning to utilize the app less.
Still, Facebook reported a quarter-over-quarter boost across its family of apps (Facebook, Instagram, WhatsApp and Messenger) from 3.51 billion to 3.58 billion monthly users.
All of that is to state, if Facebook can tidy up its measurement mess, marketers will continue beginning, plain and easy.
And the rhetoric will remain just that. Rhetoric.
On phase at AdExchangers Programmatic IO occasion in New York City on Monday, InfoSum CEO Brian Lesser, for example, had much scorn for Facebook. Lesser is the previous CEO of both AT&Ts Xandr and the North America arm of GroupM, among the largest media purchasing agencies in the world.
His opinion matters, and he appeared to promote numerous when he stated, “I think Facebook is a catastrophe.” The audience instantly broke out in applause.
” At worst, its the most wicked company that is manipulating social networks to plant discord in our society,” Lesser said to yet more applause. “At finest, its a terribly run company.”.
Perhaps real. In reality, Facebook just made over $29 billion in profits in the 3rd quarter alone– more than $28 billion of which came from marketing– and created $9.2 billion in income, a 17% YoY boost.
As Gizmodos Shoshana Wodinsky noted, dripping with irony, in the headline of her story about Facebooks third quarter revenues: “Good job, everybody!”.
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If Facebook can kludge together a measurement fix in the short term to deal with its attribution problem, marketers will stick around. Sheryl Sandberg informed investors on Monday that Facebook will likely be able to address more than half of its iOS-related underreporting by the end of the year. Facebook also has plans to establish more robust measurement services next year and for the long term.
The Facebook Papers reveal a business struggling to bring in and keep young users. According to reporting by The Verge, the number of teenage users of the primary Facebook app in the United States was down by 13% between 2019 and 2020 with a predicted drop of 45% over the next two years.