Advertisers have started to question Facebook’s value as scandals increase

Facebook has suffered a near nonstop drip of bad news in 2018, and with each event advertisers have barely uttered a peep while continuing to spend.

Recently with yet another revelation about the company’s past data practices, one agency chief finally said enough is enough, while other ad agency senior executives say they are questioning how much consumers continue to trust Facebook and whether advertisements on the social network continue to be effective.

Mat Baxter, the global CEO of ad agency Initiative, said in a post on LinkedIn that he was advising clients not to advertise on Facebook.

“It’s about time we take a collective stand against the egregious behavior of Facebook,” Baxter wrote.

Baxter, who has head of Initiative oversees media buying and planning for Amazon, wrote that Facebook would need to feel pressure from advertisers to act.

“Hopefully, when they feel the pain of lost advertising dollars things might just change,” he wrote.

Baxter followed up with a second posting reflecting a more widely held belief among agencies.

“Effective at what cost? Ultimately brands want positive associations and Facebook looks anything but … ” Baxter wrote.

Jim Helberg, chief media officer at RPA Advertising, an agency which represents Honda, said he is watching closely to see how consumers respond to further disclosures about Facebook and whether the company has broken any laws — including a consent decree from the Federal Trade Commission.

Helberg added that for any other company, the recent scandals would have led to far greater advertiser backlash.

“If this was not Facebook but a standard bearer like a network, there would have been a much more rapid route to conclusion,” he said. “At a certain point, you get to a critical mass of smoke. I certainly hope there’s no fire. Credibility and trust are paramount.”

Helberg says there are many ad opportunities out there, and that Facebook could reach a tipping point where the value of its ad targeting can’t overcome its brand issues.

Leave a Reply

%d bloggers like this: