Advertisers pull back on Facebook over privacy blunders
Advertisers are starting to punish Facebook for all its scandals, and it’s about time.
According to Deutsche Bank analysts, advertisers at a recent conference expressed concern about Facebook’s privacy blunders and indicated that they would reduce their purchases of ads on the site.
This shouldn’t surprise anyone. But what is a shock to me is that it has taken so long for them to react.
You may recall that years ago, when Facebook was still a privately owned company, I — and some of my readers — went after its advertisers because pedophiles were posting on the site. And the company didn’t seem to care until it lost advertising revenue.
Facebook eventually begged one of my more active readers to stop the calls to advertisers.
Data breaches at the company seem particularly bothersome to advertisers.
“It seems clear that Facebook is not in control of the narrative in the ad community but rather reacting to events happening to the company,” says the research team that follows Facebook at Deutsche Bank.
“We see heightened risk to [Wall] Street estimates for Facebook in 3Q, 4Q and 2019,” said the report — that’s the third and fourth quarter of 2018 as well as next year for those of you who don’t speak Wall Street’s lingo.
But there is some good news for Facebook. The ad dollars that aren’t going onto Facebook’s site are instead going to Instagram, according to Deutsche Bank. And Instagram is owned by Facebook.
“The way advertisers spend their money online is shifting,” says Barry Frey, president of DPAA, an organization that is running the Video Everywhere Summit in New York on Oct. 30. “We’re seeing more revenue flowing into video, programmatic, brand-safe and more-transparent data environments.”
In short, advertisers don’t want to put their brands into the middle of controversies.