(For those who say I just don’t get it…get this!)
(The FTWSIJDGIGT section came into being when things I was being criticized for “having no clue” over the years came back around showing maybe I knew a little bit more than some were giving me credit for. It was my way of tongue in cheek as to not use the old “I told you so” analogy. I’m saying this for the benefit of those who may be new or reading here for the first time (and there are a great many of you and thank you too all). I never want to seem like I was doing the “Nah, nah, nah, nah, nah” type of response to my detractors. I’d rather let the chips fall, good or bad – and let readers decide the credibility of either side. Occasionally there are times however they do need to be pointed out. i.e., something of significance per se that may have a direct impact on one’s business etc., etc.)
In a recent article I opined (or for some had the nerve to even question) that the latest quarterly results coming from Facebook™ weren’t as “crushing it” as many in the business/financial media were proclaiming. Yes, I did agree that the actual reported numbers were impressive “at first glance.” However, if you looked closer and applied some actual business acumen, rather than bandwagon cheering, the report could also show that there was far more “spin” to those numbers than many caught with just that glancing look.
As always I ran into the usual accusations such as “What do you know about social! After all, you profess all the time you don’t even use it, so maybe it’s just you that doesn’t get it.” and more. Some made valid arguments, some were just ridiculous. However, it was to the one’s that did make valid points the discussion needed to be left by both sides as, “Well, we’ll just have to wait and see for more evidence as to where this all might be headed.” And it’s too that point it seems we didn’t have to wait as long as any of us thought. As a matter of fact, it seems we now have a definite answer, or at least, the evidence to tilt it for one side or the other has just become ponderous in deed. To wit:
From the Wall Street Journal Aug. 9, 2016: “P&G to Scale Back Targeted Facebook Ads”
There are two points in this article that need to be paid attention to. For they tell far more if you ponder their reasoning than if you just glance over them. The first:
“We targeted too much, and we went too narrow,” he said in an interview, “and now we’re looking at: What is the best way to get the most reach but also the right precision?”
Read that sentence a few times, then ask yourself this question: Is that not precisely why the eyeballs for ads business models were championed? Wasn’t it because of that innate feature, for the ability to perfectly target “potential customers” via all that data gathered that made it a supposed superior form of advertising in the first place? Was that not “social’s” raison d’être? And here you have the #1 largest ad buyer in the world implying – Yeah, not so much.
As bad as that is for the whole “eye balls for ads” model. It’s the second point that puts this whole thing into some real context. A point I believe (for I have not seen it stated anywhere) seems to be missed, or, for a lot of Silicon Valley aficionados – purposely ignored. To wit:
“Cincinnati-based P&G spent roughly $7.2 billion on advertising globally in the year that ended in June, up about 1% from the previous year, according to company filings. P&G said it plans to increase it around 5% for the year that started July 1. Prior to last year’s increase, the company cut spending two years in a row.”
(Note: When I originally wrote this article I misinterpreted the “cutback” to mean pulling those ad dollars away from FB. I was wrong. Total ad dollars are not being cut, just the “targeted” campaign. With that said it does not change my opinion, or my assertion that this raises major red-flags for the entire social genre in general. For as I stated previously: “Is that not precisely why the eyeballs for ads business models were championed? Wasn’t it because of that innate feature, for the ability to perfectly target “potential customers” via all that data gathered that made it a supposed superior form of advertising in the first place? Was that not “social’s” raison d’être? And here you have the #1 largest ad buyer in the world implying – Yeah, not so much.” As always – draw your own conclusions.)
Why is that statement one you should focus on? It’s for this reason: If the cutback in ad spending at Facebook™ (FB) was coupled with an advertising cutback of some sort at P&G™ one could argue that FB was just a recipient of an overall trend of cutbacks happening across the economy because of lackluster overall economic growth. It would be a fair point – but it isn’t applicable, nor can it be spun anywhere close.
As stated by P&G they not only increased their ad budget by 1% previously. But as of the new year which started July – the plan is to increase it another 5% or so.
The reason that point should jump out at you is this: FB is not only going to see less ad revenue from the top ad buyer in the world – that ad buyer is taking that savings from FB and adding too it via an overall increase that is 5X’s larger than the previous increase. It’s not like they didn’t have the “money” to keep whatever ads they had at FB and add additional. No, they pulled from FB – and added even more to the budget to spend elsewhere. That is a distinction with a difference my friends, and one that should be sounding alarm-bells if you’re in that space.
But if you want even more, just like those late-night ads: But wait! There’s more!! Again from the WSJ™. To wit:
So now, people who can’t stand ads of any type in their feeds (especially the “free” crowd.) They are now going to have FB circumvent their wishes as to see no ads – and have them forced down their screens like it or not? Yeah, that’ll do it. As in – watch how many more stop using FB entirely just out of spite.
I wonder if the “click farms” will be as insulted when they get ads forced upon their users that need to keep up the pace to replace those that may drop off? Or maybe it will be another metric on the next earnings report that says “Ad impressions are now up 10,000,000,000%!!!
Or maybe this will be more the case: If an ad is forced upon a users screen, but that screen belongs to someone that is dead-set opposed to getting it – will it make a sale?
Let alone will an advertiser pay for it.
© 2016 Mark St.Cyr