The past three days have not been Facebook’s finest but it will probably emerge unscathed, and unchallenged, as the global advertising and media sector’s “Teflon Queen”. That’s my hunch based on Facebook’s recent advertiser-defying history although I hope I’m wrong.
The industry debate has been frantic since The Wall Street Journal last Friday led a blistering run of international reports on the social media giant admitting to have inflated users’ time with video on the platform by 60% - for two years.
I’ve had a number of illuminating conversations since then, including one with the local CMO of a multinational consumer brand portfolio. The company has just completed an audit of its 12-month Facebook strategy and is now pulling dollars out of the platform. It hasn’t worked. Proctor & Gamble also said as much publicly a few weeks back about Facebook’s hyper targeting credentials – they don’t work and so it’s swinging back to broader and bigger audience and customer segments which are better hitting commercial targets.
But rather than P&G’s very public push back on hyper targeting starting robust industry debate about the fundamentals which underpin so much of the digital economy – led by the targeting lion, Facebook – meaningful industry discussion around the crucial hyper-targeting and personalisation themes have all but withered. The material shift for P&G – the world’s biggest advertiser - in how it uses Facebook should have resulted in much more in-depth industry debate. It hasn’t.
Let’s be clear here. We know Facebook can work as a media advertising channel – sometimes really well. But I’ve been bewildered for a long time about the market’s excessive enthusiasm to accept audience measurement standards and claims of advertising efficacy from Facebook itself without applying the same level of scepticism and rigour it does to other media channels.
The market – advertisers and their agencies and advisors of all creeds - is indiscriminately applying wildly conflicting compliance standards on the media sector for audience and advertising measurement. It seems more advertiser tolerance for home-baked data claims increases in direct proportion to how well you can convince people you’re a tech company, not a media company. Even though you are 100% a media company with tech there are some pretty interesting implications for advertising makegoods in this conversation too, just quietly.
It’s not just Facebook, by the way. The market at large also treats that other royal member of Teflon descent, Google, with the same impressive tolerance for fuzzy metrics.
Independent measurement and verification is the cornerstone on which to base large media investment decisions but somehow the market has convinced itself that cats trawling unregulated in the digital fish tank is a really sustainable business case.
We should be upfront about this - Facebook has form. It has already pulled off the one of the great bait-and-switch advertising strategies of the century when it all but dumped organic social a few years ago and forced brands to start paying for every conversation. That was after years of proselytising about business needing to be embedded in social conversations on Facebook for free.
For the 30 years I’ve been in the media and marketing industry I’ve not seen such market acquiescence to being rolled so profoundly.
So even when I read solid analysis by The Wall Street Journal today warning that Facebook investors might be jittery about the advertising revenue implications of its latest inflated video viewing numbers, I’m not entirely convinced - yet.
Facebook stock is trading at 37 times forward earnings estimates, based on what the WSJ says are “highly optimistic” assumptions to expand its global ad market share. For these reasons, along with other pervasive challenges in digital advertising, the WSJ argues it all “could bolster the case for traditional TV advertising”.
I’m clearly not going to argue with that fine observation but I would be happy with an even simpler outcome to start: that the industry – advertisers, media, social, creative and digital agencies and digital “transformation advisors” - demand the same level of independent, third party and robust public measurement data from media companies like Facebook and Google as they demand of sectors like TV. Then, at the very least, the cats are out of the fish tank and we can compare any data on a level pitch.
Anthony Fitzgerald
MCN CEO