By Judy Shapiro. Published on June 04,
2018.
When the Cambridge/Facebook scandal first
broke, financial analysts held their breath to see if ad dollars would flee as
the depth of the breach in trust became obvious.
This question seemed settled with
Facebook's crushingly impressive first-quarter financial results, which reassured analysts that
advertisers merely "shrugged" at this news, as they had to all
previous tracking glitches, algorithm misfires and feature failures. In fact,
there was growing consensus that as long as users stick with Facebook, advertisers
will stick with Facebook too. A shrug, many believed, was marketers' proverbial
white flag of surrender to the ad duopoly that dominates the marketer's
landscape.
Yet it is a mistake to take the
"Facebook shrug" at face value because there's a lot going on beneath
the surface that will significantly impact Facebook's financial future. In
fact, advertisers haven't capitulated but are quietly rethinking Facebook's
role as part of a new and dynamic trust-marketing architecture built on three
principles:
1. Reunification of media and creative functions under one
agency roof
Facebook became a mega media platform
precisely because it "re-bundled" media and creative, filling a void
left by the "Great Unbundling of the 1990s," in which clients sought
to manage lower media labor costs separately from high creative costs. Today,
though, the "unbundled" agency model is counter-productive because
media has become as labor-intensive as creative work (maybe more so). Beyond
that, trusted marketing relies on data to drive both creative and media,
requiring a unified execution plan—from messaging to media. As agencies become
re-integrated, they will re-allocate Facebook budgets by choosing newer
technologies to express their integrated brand marketing visions.
2. Emergence of "brand to demand" contextual marketing
The ability to link branded content
activities directly to sales or leads, sometimes called "brand to
demand" marketing, remains the gold standard but is elusive because ad
tech is so fragmented. Here, too, Facebook stepped in to give advertisers a
seamless single platform to run branded campaigns along with large audiences to
slice and dice at will. Yet since the Cambridge episode, hallmarks of Facebook
vitality such as time spent there have taken a hit.
Edison Research earlier this year found
that for the first time since 2008, the portion of Americans reporting they
currently ever use the service has declined to 62 percent from 67 percent among Americans at least 12
years old. New data from Nielsen also shows that, significantly,
Facebook's core platform lost 18% in time
spent last year. As Facebook's ubiquity erodes, advertisers
will adjust budgets and turn to new alternatives for "brand to
demand" acquisition marketing.
3) New priority on establishing trust with consumers
Brands understand creating trust is very
very tough but a critical competitive differentiating attribute. Facebook
helped advertisers establish trust through the Facebook "trust halo"
but this too is declining since the Cambridge Analytica scandal. Now 66 percent
of consumers have lost trust in Facebook, according to an
NBC poll. The financial consequences of this steep loss of trust are
significant for Facebook. Increasingly, advertisers will divert funds into new
communications tactics—i.e.—advocacy advertising that don't undermine brands'
trust efforts, visibly moving brands closer to consumers' evolving
"trust" demands and further from Facebook.
Whether Facebook can withstand any storm is
a hypothetical question, but what is not in doubt is that post-Cambridge,
advertisers will fundamentally change how they use Facebook. And in the
process, they will fundamentally change Facebook forever.
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