Mediaradar Blog

Facebook: Are Advertisers Leaving the Social Network?

Facebook: Are Advertisers Leaving the Social Network?

To say the least, Facebook has been in the news quite a bit recently. And while that may not come as a surprise to many, the conversation surrounding the platform and its content is one that is still very important for publishers and their advertisers.

In recent months, Facebook has been roasting in the spotlight of the general public, as concerns surfaced over the platform’s user-privacy, data-leaking, and potential role in the 2016 U.S. Election. It’s proven to be the most intense scrutiny put on any platform in the relatively brief lifespan of social media.

A New News Feed

To deal with the evolving – or perhaps, more aptly described, changing – social media landscape, in January 2018, Facebook CEO, Mark Zuckerberg, announced that the company had changed its News Feed algorithm, as a way to prioritize the content that would lead to more “meaningful interactions.”

What does that mean? Well, from the perspective of Facebook users, it means that they would see more content from their friends and family, and less content from media companies, news sites, and brands. The idea was to prioritize the content that brings us together as people, instead of the content that could potentially divide us.

Among the content that could divide us, is “fake news,” and all of the other content that may have a strict agenda – i.e., the type of content that could potentially influence an election.

From a publisher and advertiser’s perspective, however, Facebook’s algorithm change was a bit troubling to hear at first, as many publishers rely on Facebook for heavy website traffic – that traffic then driving the value of their ad space.

Despite Facebook’s positive intentions, it seemed as though all editorial on the site would see negative effects, which naturally did not sit well with publishers and their advertisers.

Facebook seemed to be chasing impartiality by way of disengagement. Publishers were left to wonder what this could mean for their overall business, and whether or not they should look to other platforms that better support editorial.

 

Data Practices

Facebook’s most recent controversy further rose concerns among the site’s advertisers.

Recent news broke, stating that data from 50 million Facebook users was provided to an analytics company that had intentions of influencing voter behavior during the 2016 U.S. Election.

CEO Mark Zuckerberg sincerely expressed how unfortunate the events were and apologized, acknowledging that Facebook needed to make changes going forward.

Despite Zuckerberg’s apology, this was the point where the spotlight shone the brightest on the platform, as advertisers started to threaten to leave the platform.

And while we’ve yet to see this event’s true effects on Facebook’s ad landscape, the industry as a whole has been left wondering whether or not advertisers will leave, and if they do, where their Facebook ad dollars may be reallocated.

 

Where could advertisers be going?

MediaRadar CEO, Todd Krizelman was recently on Bloomberg Television to discuss Facebook’s ad business, whether or not advertisers are, in fact, leaving the social network, and if so, why Snapchat could be an ideal landing spot for them.

See the segment below:

Why would advertisers leave Facebook?

The issue with Facebook’s algorithm change was that it seemingly disassociated itself from all forms of editorial, “one side of the spectrum or the other.”

While there’s certainly positive intent in being a completely bipartisan platform, the move away from editorial is not something that sits well with publishers and their advertisers. As they lose traffic, the value of ad inventory decreases, minimizing the value of that space for advertisers, and thus minimizing potential ad revenue for publications.

 

Have any advertisers already left?

While it’s too early to see any hard evidence that new Snapchat ad spend is coming directly from Facebook, MediaRadar has undoubtedly seen a “big uptick in advertising on Snapchat.”

This is a preliminary sign that advertisers may, in fact, be reallocating their Facebook ad spend on Snapchat, to meet a similar audience without losing a great deal of web traffic.

 

Why Snapchat?

Snapchat has done a terrific job partnering their app with editorial. Snapchat Discover Channels offer these publications their own space to display content.

“As a result of them [Facebook] stepping back, you saw Snapchat and others stepping forward a little bit more, saying, ‘Hey, we can court these other types of publishers. And with that, advertisers follow.”

Here, Todd illustrates Snapchat’s willingness to step forward in the wake of Facebook’s apparent step backward. In fact, Snapchat has even continued to add Discover Channels, to further prove that they not only welcome, but desire a variety of publisher content on their platform.

 

What could the future of Facebook and Snapchat look like?

Mark Zuckerberg recently made comments stating that, “an ad supported model is the only rational model if you really want to reach everyone in the world.”

Whether he is right or wrong, one thing is for sure – he does want to reach everyone in the world, and currently, Facebook has over 2 billion monthly active users.

That makes the future of Facebook an interesting one. Many have suggested they move to a subscription-based service in order to serve less ads, while Zuckerberg suggests that Facebook would lose it’s mass connective abilities, as users would likely leave if asked to pay.

Snapchat stands in a very interesting position. The app offers a very innovative platform, providing video-heavy, highly-interactive space to publishers and advertisers. While its audience size may never reach the heights of Facebook’s, it’s interactive capabilities may prove to be enough to satiate the needs of content-providers.

In the end, Snapchat’s clear willingness to partner with publisher’s may drive their success to new levels.