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Advertisers are pulling money from Facebook and other social
media — but that probably won’t do much to benefit Facebook’s
competitors in the digital ad market. With numerous big-name
pause on social ad spending, inspired by the Stop Hate for Profit
boycott, where will those dollars go instead?
There are two reasons why we expect spending previously planned
for Facebook likely won’t be spent elsewhere:
- The brands pulling back on spending are generally not
performance advertisers, and Facebook is a performance advertising
platform. The advertisers pulling spend overwhelmingly fund brand
campaigns on Facebook â€” not performance ones â€” because their
businesses are not optimized for performance advertising.
Therefore, these brands were never overly reliant on Facebook or
any other performance platform for the kind of advertising they
need to do. For context, large CPG brands like Unilever generally
don’t maintain direct relationships with their customers and sell
their products through countless retailers â€” this makes
calculating ROI or ROAS incredibly difficult when a brand doesn’t
have access to granular purchase data.
- Brands are looking to save during a softer economy. The brands
boycotting also consist primarily of
companies that sell consumer goods, which have seen lower sales due
to the pandemic and the slower consumer spending. It’s likely,
then, that the pause on social media will serve as a continuation
of the broader pandemic-related pull back in ad spending as these
brands look to cut costs. This strategy likely implies that brands
will not reallocate their spend to other advertising channels but
instead shift that spend towards their savings or other
non-advertising aspects of their businesses.
With the spending that doesn’t get saved, who stands to benefit,
both on the buy and sell sides?
- Digital channels that can offer brand marketing without the
risk of user-generated content. It’s important to note that the
volume of spending being cut from Facebook is relatively small
compared to the spend that Facebook receives from SMBs. But of the
spending that gets cut, the portion that doesn’t get saved could
shift to places like CTV/OTT platforms like Roku and Hulu, or
ecommerce sites like Amazon that can serve similar purposes in
terms of national campaign objectives â€” but without the same
brand safety concerns. Some advertisers are also likely to
experiment with less scrutinized social platforms like Snapchat and
TikTok for similar reasons if they didn’t say they would pull back
all social media spending.
- Performance advertisers who continue spending on
Facebook. Companies who sell their products online and maintain a
direct consumer relationship spend most of their ad budgets on
performance marketing. With brand marketers pulling out, these
advertisers are likely to get
a better deal on CPMs if they remain on Facebook. Facebook had
said during its Q1 earnings call that brands pulling out of
spending on the platform helped lower prices, which raised the ROI
for some performance marketers â€” this in turn led them to
decrease their spend.
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Source: FS – All – Entertainment – News
How Facebook boycott participants will change their