Pando

Facebook inadvertently screws over small publishers… again

By Sarah Lacy , written on August 10, 2016

From The Disruption Desk

When Facebook was only a few years old, the eventually ad proposition was clear. It would know so much about you that its ads would have more relevance than anything else.

That sell worked for a long time. According to the world’s largest advertiser, the schtick may have worked better than the ads.

The Journal is reporting that P&G is pivoting from Facebook ads that target specific customers, after pooh-poohing the limited effectiveness of the ads.

Wait! You are telling me continuing to show me ads of the same Nordstrom boots that I already bought or looked at and decided not to buy doesn’t work???

Score one for Evan Spiegel who called Facebook’s retargeted ads “creepy” and built his company a different way.

From the article:

For instance, P&G two years ago tried targeting ads for its Febreze air freshener at pet owners and households with large families. The brand found that sales stagnated during the effort, but rose when the campaign on Facebook and elsewhere was expanded last March to include anyone over 18. 

But that isn’t really bad news for Facebook. Because the whole targeting thing worked until it got to such massive scale that it and Google pretty much dominate more than 70% of digital ad sales. Facebook will still get just as much money from P&G, the source confirms in the piece. They’ll focus on reach and precision for certain products like diapers. Facebook is lucky it offers both.

Who it hurts are smaller publishers. Those who rode the coattails of Facebook’s thesis and created niche sites where advertisers employing that strategy could just sell direct. And this isn’t just speculation. The article stated that P&G would be cracking down on these:

One category the company is scaling back: smaller websites that lack the reach of sites such as Facebook, Google and YouTube.

It’s also an indictment of non-Google and non-Facebook digital ads generally:

P&G’s push to find broader reach with its advertising is also evident in the company’s recent increases in television spending. Toward the end of last year P&G began shifting money back into television, according to people familiar with the matter. During the first quarter of 2016, the company’s ad spending jumped 11% to $429 million from the year earlier, Kantar Media said.

Like vertical media needed another hit. Also this week, Marketing Land reported that Facebook’s organic reach is down 52% for publishers this year.

I don’t blame Facebook for any of this, just as I don’t blame Facebook for pushing back on ad blockers. It has built one of the most indispensable tools on the Web today. It has the right to be selfish and prioritize Facebook and Facebook’s users first. It has the right to change its algorithm to eliminate shitty link bait headlines. If it wants to be video first, it has the right to prioritize video on its platform.

And so too does it have the right to be an ad based platform whether users want those ads or not.

But Facebook is certainly making life harder for smaller publishers who are also hoping to have ad based businesses. There’s this news. The fact that Facebook (and Twitter and Snapchat for that matter) all push their own custom formats, making it costlier for advertisers to build additional campaigns that can work on non-Facebook sites. And there’s the fact that Facebook simply isn’t a reliable distribution engine.

And yet, everyone in media still needs Facebook.

And it may be in this context that Facebook truly fulfills the destiny of becoming “the next Google”: The biggest, most frustratingly un-game-able distributor of words.