Facebook's $10 Billion Advertising Exodus

Small businesses once flocked to Facebook with their advertising budget to help them effectively target their customers. Times are changing. One small business owner, Martha, remarks “it was clear in early fall that Facebook had lost the ability to target my customer”. Her gift basket company used to spend $14 to acquire a new customer via Facebook, and it’s since risen to $100, with fewer results. Recent changes to default settings on iPhone are part of Facebook’s issue, in that 80% of users have enabled features that limit tracking beyond what was tracked previously. Advertisers like the small business owner mentioned above are feeling the effects of the trickle down changes and are ultimately pulling ad dollars from Facebook. Without the ability to track consumers as they previously could, Facebook’s targeting has become much less effective. It took some months for it to show up, but now collectively Facebook is seeing a huge drop in their share price. Facebook argued the privacy changes would hurt small businesses the most, but ultimately the small businesses can take their ad spend elsewhere, and Facebook is really the party feeling the sting. Business owners like Martha are turning to search, where users are defining their interest and Google can deliver. Since Google sells ads against a search query, they can provide better targeted results than Facebook could. https://www.wsj.com/podcasts/the-journal/facebook-10-billion-advertising-exodus/6e4feae3-9322-461c-825b-cfdf252f7a5e?page=1