Facebook’s big threat isn’t Cambridge Analytica, it’s advertisers questioning ROI
Seb Joseph | May 14, 2018
Advertisers are more concerned that they are wasting money on Facebook than they are about the platform’s privacy lapses. They are unhappy about how expensive it’s gotten to advertise on a platform that has openly admitted it hasn’t always charged the correct amount for ads. Combine that with lower-than-expected return on investment from pricey inventory like video, and some of those companies are starting to question why Facebook dominates so much of their media plans. Several advertisers have reported they are examining their media commitments to the platform. Radisson Hotel Group, Adidas, Booking.com and O2 are among those that have already told their marketers and agencies they need to hold Facebook accountable for how it helps drive business growth, and not just buy ads due to their claimed scale and broad reach, according to executives working with those companies. Each of those businesses has either made or is making changes to how they plan and buy their media, and that has inevitably pushed them to question the value of Facebook’s ads. Radisson Hotels Group will continue to spend on Facebook, albeit with a closer eye on how its ads compare against other platforms. The hotel chain wants the social network to play a key role in its efforts to go all-in on performance marketing, but accepts it may need to revert to a test-and-learn approach that could reduce certain media buys in future.