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"The Days Of Giving Them A Pass Are Over" - Advertisers Demand More Transparency From Facebook, Google

Even before the New York Times and the Guardian published their bombshell exposes about Cambridge Analytica, data published by market observers showed that the advertising "duopoly" of Facebook and Google had seen its market share slip in 2017 for the first time ever.

And while some advertisers, including Mozilla and Commerzbank, have already pulled advertising campaigns from Facebook after the Cambridge Analytica scandal highlighted the fact that the company has for years aggressively marketed users' data with little transparency or agency, other large advertisers are taking advantage of an opportunity to squeeze better rates - or more bespoke service - from both of the ad behemoths, according to the Wall Street Journal.

Firms like Proctor & Gamble and Subway are cutting back on ad spending on one or both of the two platforms because data has allowed them to more efficiently allocate their ad spending dollars.


The demands for more accountability and better service started two years ago after Facebook revealed that its metric for the average time users spend watching videos was artificially inflated because the company was only counting views of more than three seconds. Then it continued last year following revelations that some advertisers content posted on YouTube appeared near video content that was deemed to be either racist or otherwise extreme.

Following this string of run ins and scandals, WSJ says large advertisers are fundamentally reshaping their relationship with the two advertising behemoths - even leveraging their rivalries with smaller firms like Twitter and Snapchat to further pressure the market leaders.

Madison Avenue’s increasing uneasiness with the platforms and its moves to push back aggressively are fundamentally reshaping the relationship. Advertisers’ broad push for changes has played out in behind-the-scenes dust-ups, veiled and overt threats and advertising boycotts, and has extracted some concessions from the tech giants. Among the leaders is P&G, the world’s largest advertiser.

Many companies are actively policing their ad purchases to ensure they avoid objectionable or irrelevant content. Some are cutting budgets. And they are demanding far more transparency from Google and Facebook about the performance of their ad campaigns to make sure they aren’t wasting money.

During a meeting of the Association of National Advertisers, companies staged a mini-revolt after Facebook tried to convince them that its video advertising remained effective even if customers only watched for a few seconds. Advertisers were miffed at what appeared to be Facebook trying to justify offering misleading data about its video ads. So Facebook relented and offered to provide more transparent data.

Facebook told advertising giant Publicis Groupe that average video viewing time was likely overestimated by 60% to 80%. Other miscues followed. Facebook fixed the problems as they arose and said they didn’t affect billing, but trust with advertisers had frayed.

"The days of giving digital a pass are over—it’s time to grow up," Mr. Pritchard said publicly at an industry trade group meeting in January 2017.

The following month, at a meeting of the Association of National Advertisers, the group wanted to know when Google and Facebook would allow the industry’s measurement watchdog, the Media Rating Council, to audit some of their metrics.

Instead, Facebook executives including Carolyn Everson, vice president for global marketing solutions, launched into a presentation about how video ads were effective on Facebook, even if users only watched them for a very short time, said people familiar with the meeting, frustrating some attendees.

"If our boards come to us and ask us, ‘Do you know where these dollars went’ and we cannot confirm it, we have a problem and therefore you do," said Deborah Wahl, who was then U.S. marketing chief of McDonald’s Corp. , according to one of those people.

Facebook executives got the message and laid out a plan to give more measurement data to third-party companies and promised to undergo an audit of its measurement processes.

Offering more precise metrics has allowed advertisers on both Facebook and Google's platforms to better measure engagement, allowing them to save money in the process.

P&G this month said it cut more than $200 million in digital ad spending in 2017, including 20% to 50% cuts at “several big digital players,” partly because better data showed it was wasting money. P&G found that the average view time for a mobile ad appearing in the news feed on platforms such as Facebook is only 1.7 seconds.

Restaurant chain Subway plans to cut back on Facebook spending this year because of concerns about whether its ads are being viewed sufficiently, according to a person familiar with the matter. One global beverage company is planning to cut its spending on Facebook ads by about 30% in the U.S. and the U.K. this year because of a decline in effectiveness, according to a person familiar with the matter.

But making sure - for example - that advertisements for Tide-branded products don't appear alongside videos of teenagers attempting "the Tide pod challenge' - is just the beginning. Both advertising behemoths have gotten the message that they can no longer take their customers for granted.

The question now is, with Facebook CEO Mark Zuckerberg and several of his peers likely headed for a Congressional hearing later this year, will we see more advertisers jump ship?

One thing's for sure: Media companies - which have suffered enormously as Facebook and Google have siphoned off the ad revenue on which they once depended - will be watching closely for even the slightest opening.