Charlie Ashe INside Performance Marketing Mon, 21 Sep 2020 10:11:20 +0000 en-US hourly 1 https://wordpress.org/?v=6.1.4 Will 2020 End Well for Facebook and Google? https://performancein.com/news/2020/09/22/will-2020-end-well-for-facebook-and-google/?utm_source=rss&utm_medium=rss&utm_campaign=will-2020-end-well-for-facebook-and-google Tue, 22 Sep 2020 08:00:00 +0000 https://performancein.com/?p=58833 Advertisers should be viewing the potential of their ad campaigns across the total media mix and planning spend based on two key criteria: desired outcome and the ability to react quickly to market changes.

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To most platforms, a very public advertising boycott by as many as 1000 brands – including Unilever, Diageo, Lego and Adidas – would have had a crushing impact. But when Facebook was on the receiving end of a major pause in ad spend over the summer, it was the financial equivalent of punching Superman in the stomach. Results posted in the midst of the boycott showed Facebook had seen a 10% growth in ad revenue to $18.3 billion over the second quarter of 2020, only 16% of which was generated by its top 100 advertisers. 

An ever-evolving business model

Facebook has not got where it is today by luck. By constantly adjusting its focus, diversifying its business model and making some strong decisions around the consolidation of media, price decisions and data into a single closed environment with a powerful algorithm, it is today able to weather the political storms in which it is swept up. By weighting its revenue stream towards SME businesses, Facebook has generated a huge volume of long-tail clients and consequently seen minimal impact from the big-name ad boycott. And now Google is taking note and pushing YouTube in a similar direction, though arguably the model is first created by Google within search. 

It is their move to consolidate that has allowed Facebook to open up a platform to more longtail budgets; they have actively closed off outside data, inventory and integrations to create a more uniform environment. This allows for simpler UIs and stronger algorithmic learning. Ultimately, with the overall move to online, big brands have to be used to seeing these challenger brands as competition in a much more real way.

Big brands should look to SMEs for social direction

Social is the playground of challenger brands, and they are well suited to it, being close to the data and quick to respond with content. For the large brands, however, it feels that this is a media owner in control who won’t make changes on their behalf, and over whom their budgets have little sway. They have been slower to adapt to this environment.

First steps, big brands need to get digital first, to push legacy content production processes to catch up, and embrace the steep change to media mix that Covid has brought about, to counter the smaller more agile brands who have proven they can also capitalise on a more consolidated media space online.

Major brands may hold less power when it comes to hurting the likes of Facebook, but they do have ample ability to make the tech giants work as efficiently as possible for them. A large part of this is the tactical use of independent tech stacks and close relationships to more traditional publishers.

Advertisers must avoid the one-size-fits-all approach

Consumer behaviour has driven a huge shift during COVID-19, from retail to online, and increased time available through digital channels over traditional. Brands with a strong online presence and an ecommerce approach have responded well, using this to push forward a transformation they have long been driving.

However, with pricing of traditional channels – particularly TV – very reasonable due to fluctuating spend, marketers shouldn’t dismiss offline out of hand as it can become much more cost-effective when used tactically. Advertisers should be viewing the potential of their ad campaigns across the total media mix and planning spend based on two key criteria: desired outcome and the ability to react quickly to market changes. 

Data is king – so long as it’s from a trusted source

And it is here we reach the nub of the issue. Any advertiser should be considering the role of their agency partners through a dual lens: Their ability to use data at scale to understand both macro and micro changes, and their ability to deliver an agile campaign to respond quickly to this information.

Marketers understand the value of the numbers and are becoming ever more confident when it comes to putting their faith in data. They know, too, how important it is to evaluate individual channels as a part of the whole picture of media success. The danger comes, however, when measurement is done by those media companies who also decide media price and optimisation. This is where brands have to be careful to have independent measurement based on numbers they trust.

Facebook and Google have nothing to fear when it comes to the loyalty of advertisers. They have shown they are immune to a global boycott, and are savvy enough to be adjusting their businesses to remove any reliance on one income stream. 

Technology and partners are best kept fluid

Personally, I favour more of an independent tech stack approach – the idea of media, price decisions and measurement all sitting within a closed algorithmic environment does not sit well. With the challenge of a reduction in cookies imminent, plus Apple’s restriction of the IDFA, we are getting ever closer to closed network models across owned and operated inventory for the big tech giants – something we are already seeing with Facebook. Now more than ever it is key to work closely with independent technology and partners to understand these numbers in a wider context.

The question currently is whether businesses of all sizes can adjust their own behaviour quickly to respond effectively to the challenges thrown up by 2020 and prove the age-old saying: If you can’t beat them, join them.

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