Will Advertisers Pull Away from Facebook? We Don’t Think So.

Recently, Facebook has unfolded alterations to its advertising services in response to the Cambridge Analytica scandal. Read how these changes will impact brands marketing with Facebook ads. Note that these changes are ongoing and Facebook intends to roll out more updates in the coming months.

Two major changes have occurred since the scandal broke.

First, Facebook announced the exclusion of “Partner Categories”, a feature that allows advertisers on Facebook to use third-party data vendors like Experian and Acxiom to create more detailed audience targeting segments. This change is permanent, and the feature will be completely turned off by October 1st, 2018. The second major update is a “certification tool” that requires advertisers to obtain consent from users before using their emails for custom ad targeting.

How These Changes will Impact Advertisers:

The removal of “Partner Categories” led to rampant panic among brands, but note that the removal of this feature has little to no effect on targeting. What is changing is the way Facebook gathers data. Prior to 2014, Facebook allowed third-party apps to gain access to user data, and unfortunately, years of “data scraping” such as in the case of Cambridge Analytica’s app, caught up with them in 2018. Moving forward, the company will do a stringent review of all mobile apps and websites that integrated with Facebook. Any lower quality apps will shut down, and there will be a stronger barrier to entry for high-quality integrations. That way, data from “friends of friends” who don’t give third-party apps authorization, won’t have their data leaked. With the addition of a “certification tool” only custom targeting will be impacted, not “Lookalike” targeting. If you want to target a specific set of individuals, you will have to ensure that the individuals you are targeting gave consent. Katana recommends brands to create a disclaimer within their terms and conditions that states how they intend to use their information in a quick one-click checkbox for users. E.g. “Are you okay with receiving marketing messages?”

Will Advertisers Pull Away From Facebook Ads?

Despite the potential backlash of continuing the use of Facebook’s ad services, most brands aren’t going anywhere, not at least, if Facebook continues to deliver incredibly profitable results.

To put into perspective, think about the YouTube scandal last year: Google was accepting users with extremist content into their YouTube Partner Program, a program for advertisers to secure ad space on top influencer’s videos. This placed ads next to content by neo-nazis, shocking brands and plummeting Google’s share price down 5%. Advertisers threatened to remove YouTube ads, end partnerships and suspend campaigns. Eventually, with a quick algorithm fix and a better content filter, YouTube recovered, and brands had the cover to continue their ad partnerships with Google and YouTube.

Facebook has over 2.13 billion users. Its subsidiaries WhatsApp, Messenger and Instagram have a combined of 2.1 billion active users. As the largest social network worldwide, Facebook has a reach that is unmatched by any other social marketing channel. Without the third-party data vendors and a few new privacy tools to bolster trust, the social giant still has landmines of first-party data advertisers can leverage for targeted ads.

Our Take:

Much of the sentiment in marketing news has been that the removal of this feature means Facebook is losing their advertising prowess, and advertisers will want to look elsewhere, such as LinkedIn, Pinterest, Twitter, etc. for efficient ways to target users with ads. These recent changes are meant to reassure Facebook users that their data won’t be misused and their privacy is taken seriously. They will neither hurt the effectiveness of ads on Facebook nor will they reduce the capabilities of Facebook’s advertising services. From our perspective, we don’t see any indication that Facebook will lose dominance as the preferred social advertising channel anytime in the near future. What we do recommend brands do is reevaluate their current marketing strategy with Facebook. Here are some additional tips in the interim:

• If their targeting strategy includes Partner Categories, how much will the exclusion of third party data affect their current campaign performance and what supplemental data can be used to create more detailed audience segments? Ensure this is completed prior to October 1st, 2018
• Understand which audiences perform better on Facebook in order to maximize budget.
• Keep up-to-date on what app integrations are being removed from Facebook.
• Keep app users engaged, as inactive users of 3 months will not have accessible data, per Facebook’s new guidelines.