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This week, like most weeks, has been a good one for advertising on Facebook. Right this minute, Facebook is responsible for over 77% of growth overall in the ads for digital industry. That figure bears repeating: 77%. Ok you got it. Facebook continues to run neck and neck with Google in advertising revenue.
Like it or not, promoted posts and links on the social media giants has become completely integrated with our viewing and interactions online. People would begin to worry if they didn’t see ads on their screens — wondering if something were wrong with their internet reception.
But that doesn’t mean there hasn’t been bad news for Facebook and other social media monoliths. Especially in the area of advertising. First came Chief Brand Officer Marc Pritchard of Procter & Gamble virtually demanding that Facebook, among others, become completely transparent in its advertising department. Otherwise he has threatened to cut some or even all of his two billion dollar advertising budget out of the cyber loop and hand it to more traditional hard copy advertisers.
Next came the story of Russian interference via Facebook with the US presidential election, which claims that about three thousand polarizing ads directly from Russia were displayed during the entire election cycle. The final blow came when a statistician claimed that Facebook inflated its market share ad numbers by approximately ten million. This kind of negative publicity can damage even the hardiest Goliath in any kind of industry or for any kind of brand.
I recently talked to Matt Staton the founder of iOOMBA, a Facebook marketing and advertising agency, about the state of Facebook marketing. “The department store magnate John Wanamaker once quipped that the problem with advertising was that half the money spent on it was wasted, but nobody knew exactly which half that was,” he said. “This also holds true today for the arcane world of ad statistics and analysis on Facebook.”
He said even though there are experts who claim to know how to analyze every metric possible and seem to navigate all the razzle-dazzle of the most sophisticated dashboards for optimal targeting, the whole thing is still a major mystery to advertisers large and small. “All they really seem to know is that they don’t dare step out of the current, lest their competitors gain a disastrous edge. Advertisers may have their doubts about the transparency and billing operations of a media giant like Facebook, but right now results speak louder than doubts.”
“But as it stands today,” according to Fernando Azevedo, CEO of social marketing agency Ybus, “Facebook seems all but immune to criticism and downsizing. Advertising agencies and their clients just don’t care that much about number crunching, because no matter how you slice it, Facebook has got the edge on Millennial viewership.”
The Real Power of Facebook
And other demographics are not far behind. Their effective audience targeting abilities far outweigh any concerns about particular demographic fudging. The real power of Facebook, as far as advertisers are concerned, is that no matter what kind of an audience they are after, it’s on Facebook.
But that’s not to say that Facebook is not taking the bad PR seriously. With the CBO of P&G demanding better metric transparency and the United States Senate on the verge of calling in Facebook executives about the influence of Russian Facebook ads on the election, you can be sure the company will be more forthcoming with proactive transparency and the reporting of advertising metrics.
In today’s polarized and politicized media climate, every advertiser is aware and deeply concerned to see that their brand does not become associated with any kind of hate group or alarmist creed. This means that unless Facebook and other social media giants can give better assurances to advertising agencies and their clients about platform specifics and failsafe apps, there will be an inevitable drop in advertising revenue.
It may not be as precipitous as Pritchard threatens, but the blow to Facebook’s prestige, let alone its bottom line, if it does lose advertising income, are making company executives scramble for increased transparency about audience estimates and placement initiatives and algorithms.
This article originally appeared on Forbes.