Navigating the Changing Facebook Ecosystem

April 11, 2018

Facebook was created with the purpose of making our world a more connected place. Its massive, unprecedented scale has enabled it to be successful in that mission. In many ways, that connectivity has been a positive force in our lives.

We’ve discovered meaningful content, we’ve shared our passions and creations, we’re reminded of special memories, and we are able to feel in touch with family and old friends.

This has been a difficult year for Facebook. Not only did it experience a decline in usership for the first time in its history, but the news cycle has also provided a consistent reminder of the downside of a more connected world, at times with consequences that have shaped our society. More connectivity has meant that Facebook can be used to influence public opinion, that misinformation is easier to disseminate, and that our own data is in more demand by those who may misuse it. As a direct result, many advertisers are asking if three recent announcements by Facebook are likely to, or should, impact their ad activities in the near term:

  1. Changes to the newsfeed algorithm are intended to connect us to each other instead of to content.
  2. British firm, Cambridge Analytica, gained access to user data that it should not have had.
  3. Facebook is disbanding its Data Partner Program that enabled use of 3rd party audience data for targeting.

Comprehensive coverage on each of these points is widely available in the press, so we will not rehash the stories here. Please feel free to reach out to your ForwardPMX teams for resources on each of these topics. That being said, we do wish to provide you with a brief POV on actions brands should or should not take based on these developments.

ForwardPMX has not observed any evidence since the Cambridge Analytica news broke and #deletefacebook began trending that indicates consumers are not engaging with advertisers on Facebook.

Over the past 30 days, ForwardPMX advertisers have continued to invest at normal levels, reach and costs have been stable, and engagement rates have not fluctuated significantly. However, ForwardPMX has observed significant increases in the cost of advertising on Facebook YoY. Across all advertisers, ForwardPMX has seen YTD (through mid-March) CPMs increase 61% YoY, while the industry has cited YoY increases of 122% in January alone.

The increases are tied to newsfeed algorithm changes that Mark Zuckerberg announced in January, which are expected to manifest in the following ways:

  • Organic reach in the Newsfeed reduced for all brands and publishers.
  • Content that creates engagement (i.e. conversation) between people will be prioritized.
  • Declining time spent on the platform.
  • Declining time spent watching videos in the Newsfeed.
  • New advertisers entering the Facebook ad auctions.
  • Fewer impressions available within the Facebook ad auctions.

These changes are creating a traditional supply and demand equation which, in turn, is driving costs up. To hold the increased competition and costs at bay, advertisers need to be incredibly sharp with their content, creative, landing page, and most importantly, audience targeting strategies.

ForwardPMX advertisers are having success putting 1st party data at the core of their strategies, in addition to Facebook audiences comprised of interests, demographics, behaviors and lookalikes that are available natively in platform. These 1st party and native audiences enable advertisers to apply a granular level of personalization to their content, creative and copy. When Facebook algorithms recognize that an advertiser is using a great ad that is targeted to the right audience, they prioritize that ad in the auction. Advertisers that focus on achieving this prioritization through creative personalization will continue to thrive with Facebook ads for the foreseeable future.

At the same time, Facebook is ending its Audience Data Provider partnership program, which made 3rd party data available from companies like Visa, Acxiom, Experian, Epsilon, DLX, and Oracle, either in-platform or via whitelisting. This is an interesting move in the wake of Cambridge Analytica, because 3rd party data was not the primary issue at hand (although Cambridge Analytica did merge Facebook data with 3rd party sources off-platform, which is explicitly against terms of service). It’s almost as if Facebook is saying “we aren’t the ones with your really sensitive data, and the ones who do have it are industry standard.” Your move, everyone else. 

Advertisers will still be allowed to use 3rd party data, but they will need to come into possession of the data outside of Facebook, and upload the lists as custom audiences. Facebook will require verification that the advertiser or agency has approval to use the data it is uploading, and has obtained the data through consumer opt-ins. Facebook has informed us that:

“In the next few months, Facebook will be launching a new Custom Audiences permissions tool to enable advertisers to work with service providers (such as agencies) to manage audiences on their behalf. In addition, Facebook will introduce restrictions for the sharing of Custom Audiences among different Business Managers to ensure advertisers have proper consent for use of the data.”

Most Facebook campaigns that ForwardPMX manage, including all Dynamic Product Ad campaigns, lookalike audiences, and interest and demo audiences will continue, uninterrupted. Your ForwardPMX teams will reach out to discuss alternatives in cases where 3rd party data is in use.

ForwardPMX views the security of our clients’ and their customers’ data as our highest obligation in the services that we provide. Based on all information that Facebook has provided to us, and that is publicly available, ForwardPMX does not consider your data to be at risk within Facebook. “Data” is a huge umbrella term. The data that Cambridge Analytical accessed is data that each user marked as public, and that we as advertisers access on a near daily basis. These include interests, locations, and demographics. At this point, we have no reason to disagree with Facebook’s assertion that there was no “breach,” in the sense that no information was “hacked”, no passwords exposed, or personal data stolen.

ForwardPMX Go-Forward Recommendations

  • Remember that Facebook is more than 1 platform. Utilize Instagram, Stories, Messenger, & Marketplace placements, and target people, not placements.
  • Use segments of 1st party data at the core of a scalable, personalized audience targeting strategy.
  • Vet and test into select 3rd party data partnerships with trustworthy providers that enable data exports and uploads via custom audiences. Use when native Facebook audiences do not meet the needs you require. Ensure personalization is at the core of all creative strategies.
  • Adhere to Facebook auction best practices, including:
    • Placement optimization
    • Bid strategies
    • Optimization metrics
    • Value (Bid + Projected Conversion Rate + Creative + Landing page Quality)
  • Treat every campaign as an opportunity to improve your approach to Facebook
  • Use Facebook’s ad formats to brand as you sell, and sell as you brand. Encourage engagement (reviews, views, and follow-ups).
  • Use Facebook’s Lead Gen ad formats and messenger strategies to grow your 1st party data files.
  • Test new platforms and formats that may prove successful, even if they push your comfort zone, including:
    • YouTube re-targeting and act-a-like audiences
    • Snapchat’s new Conversion Optimization Pixel (in Beta)
    • Pinterest
    • Don’t fully give up on Twitter
    • Emerging, video-centric, media
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