The Cambridge Analytica scandal has caused some serious
heartburn at Facebook over the last few weeks. Facebook is taking serious heat
for exposing the data of some 50 million users to Cambridge Analytica without
the users’ explicit consent, and the fallout thus far has been severe: the
company has lost around $100 billion in market capitalization, the FTC is
investigating the company and company leaders are being called to testify
before Congress. But at the end of the day, Facebook is an advertising company,
so the big question is… will advertisers up and leave Facebook?
Some news reports, such as the one from The Hill linked
above, began to float the idea over the weekend that brands and advertisers
were beginning the Facebook exodus. The report cites Mozilla, Pep Boys and
Sonos as three of the household names that have suspended all advertising on
Facebook. Of course, if a critical mass of companies followed suit and made the
move permanent, this could be catastrophic for Facebook… but that doesn’t
appear to be the case here.
As the article from Marketing Land states, advertisers
really don’t have a Facebook alternative to turn to. There just isn’t another
social media platform that can deliver the hyper-targeted audiences and
conversions that Facebook can – except perhaps for Instagram, which, you
guessed it… is owned by Facebook. And one thing that we have seen over and over
is that as long as ads are working, advertisers will stick around. As stated in
the MarketingLand article, “nothing makes advertisers stop buying successful
ads. As long as Facebook delivers results, advertisers aren’t going anywhere.”
So even the brands like Mozilla, Pep Boys and Sonos that have suspended their
advertising will almost certainly be back as soon as the dust settles. There is
a reason that they use the word “suspended” rather than “permanently ended.”
For a similar example, we have to look no further back than
March of 2017 when Google “admitted it accepted hate preachers, neo-Nazis and
other extremists into its YouTube Partner Program.” Brands were furious when
they found their ads appearing next to extremist content, thereby funding it.
The response was familiar: Google’s market cap dropped, regulators investigated,
and advertisers suspended their ads and threatened to leave. But in the end,
YouTube recovered quickly and the advertisers returned. After all, they didn’t
have a comparable alternative to turn to.
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