Facebook Measurement Mistakes Test Advertisers' Ardor
Facebook Measurement Mistakes Test Advertisers' Ardor
Four flubs since September have ad buyers calling for
more independent audits. Some consider shifting budgets elsewhere.
by Mark Bergen December 16, 2016, 4:58 PM PST
Facebook Inc. built a colossal business based on
measuring something older advertising methods cannot: the granular details
about people. Two months ago, the company copped to a flaw in that measurement.
Then Facebook did it again. And again.
On Friday, Facebook revealed faulty metrics with Instant
Articles, its mobile publishing system, the fourth disclosure of a measurement
error since September. The admission sharpened calls for more independent
organizations to monitor the performance of digital advertising. And some large
firms that buy a lot of ads said they will more closely scrutinize their
spending on the social networking giant and could shift marketing dollars
elsewhere.
"People will take a step back and certainly look
again where Facebook sits in their marketing mix," said Rob Norman, chief
digital officer for ad buyer GroupM. "My sense is that a more pragmatic
air will prevail," comparing the relationship between advertisers and the
company to a marriage moving beyond the honeymoon stage.
In recent years, Facebook has taken an increasingly
massive share of marketing budgets. Its revenue is growing by more than 50
percent, and with Alphabet Inc.'s Google now accounts for 68 percent of U.S.
digital ad spending, according to data from the Interactive Advertising Bureau
and Pivotal Research Group.
Facebook's torrid rate of expansion could slow if
advertisers are more cautious and users don't continue to increase the time
they spend on Instagram and its other services, Norman said. "There will
be much greater circumspection in the board room and the advertising
department," he added.
Indeed, company executives suggested in November that it
probably won’t be able to maintain its explosive growth much longer. Facebook
declined to comment on Friday.
In September, Facebook shared its first measurement
error: inflated viewership numbers for its video ads, a relatively new product.
Two months later, the company disclosed additional metric errors along with new
tools for third-party measurement companies, including ComScore and Nielsen, to
track its system more closely.
Problems persisted. Earlier this month, a report in
Marketing Land, an industry publication, spotted a discrepancy between
Facebook's internal metrics on how articles where shared and public
measurements. Facebook confirmed the error. "That shouldn't happen,"
said Brian Wieser, senior analyst, Pivotal Research Group. "If anyone was
concerned that Facebook's self-audit was not sufficient enough, they just
proved it."
Some in the ad world agree. Facebook's partners and
competitors see its disclosures as further proof that additional parties are
needed for these audits and uniform rules for how ads are counted, bought and
sold across the web. Ad buyers said these types of measurement errors existed
before, including with Google's YouTube. But Facebook has opted -- or been
pressured into -- disclosing them.
"It's a sign of maturity that Facebook is owning
this issue and embracing third-party measurement," said Joe Zawadzki,
chief executive officer of marketing technology firm MediaMath. "That's
good for brands, good for consumers, good for Facebook."
It may not be all good for Facebook, though. Marketers,
nervous about wasted spending, could shift budgets elsewhere. The wave of
disclosures are likely to turn some advertisers away, Wieser said. Google ad
sales staff were among the first to call media buyers when Facebook's initial
disclosure came, hoping to wrestle dollars away, the analyst noted. A Google
spokesperson declined to comment.
Yet Wieser expects any Facebook ad sale losses to be
small.
"Facebook is still the foundation of your digital
campaign," he said. "It will hurt. But we'll never be able to know
with certainty."
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