
Why Facebook is well placed to weather an advertising boycott - pseudolus
https://www.economist.com/business/2020/07/01/why-facebook-is-well-placed-to-weather-an-advertising-boycott
======
batiudrami
Does anyone actually like seeing publisher content on their Facebook feed?
It'd be great if Facebook could just go back to showing me posts by my
friends. Not things they've liked, not things they've been tagged in, just
what they've posted. All I want the Facebook feed to show me is posts from my
friends, and events that my friends are going to.

I've taken the rather drastic step of unfollowing everyone just to get the
utter garbage that is the feed out of my life.

~~~
goatherders
Serious question: how much would you pay each year for that?

I believe that if FB asked users to pay even a dollar a year more than half of
the users would disappear.

~~~
IfOnlyYouKnew
The idea of replacing ads with direct payments isn't entirely new, and the
reason for it failing far more often than not is that nobody is willing to
spend what _they represent in ad-value themselves_.

If you just divide FB's revenue by users you'll get, say $20/year (no idea,
someone look it up).

But if FB were to offer an ad-free experience for $20, the users willing to
pay will be _the most valuable_. If you're willing to pay $20, you are
probably worth $40 in advertising. Maybe you'd be willing to pay $40? Turns
out those people are worth $80.

~~~
BbzzbB
You oughta open a FB quarterly presentation some day, it is quite eye opening
how off the charts they are in terms of user monetization. $20 yearly wouldn't
cut it at all, in North America the average revenue per user (ARPU, trailing
12-months) is about $145 (yes, $145 * 253M monthly active users). It's not
even enough to match the worldwide ARPU (about $29, for 2.6B users). The value
FB extracts from it's users, particularly in NA, is simply astonishing, I'll
leave you to Googling the ARPU of other web platforms to get an idea.

[https://investor.fb.com/financials/?section=quarterlyearning...](https://investor.fb.com/financials/?section=quarterlyearnings)

~~~
IfOnlyYouKnew
I actually feel quite accomplished to be less than <50% off without ever
having the slightest interest in reading their financial reports.

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prostoalex
Facebook's advertiser base is mostly direct response and fairly diversified
internationally.

CNN gives a general idea of the advertiser pulse
[https://www.cnn.com/2020/07/01/tech/facebook-top-
advertisers...](https://www.cnn.com/2020/07/01/tech/facebook-top-advertisers/)

> Even if all 100 of Facebook's biggest advertisers joined in, they would
> account for just 6% of the company's annual ad revenue.

~~~
take_a_breath
I I get that the top 100 advertisers only make up 6% of revenue, but don’t
they also have the effect of bidding up the prices on advertising on certain
interests and locations?

~~~
arcturus17
I guess you’re assuming that having deep pockets they bid very high in certain
areas?

Having worked with AdWords I can anecdotally say that a lot of smaller players
would bid higher than the big fish. This is more dependent on margins than
volume I reckon, and there are some smaller companies with very fat margins
compared to large enterprises.

------
dig6x
It does seem very convenient timing, the article talks about Starbucks
spending less than half of its ad spend compared to same time last year. When
push comes to shove they are bound to return to one of the biggest advertising
platforms.

Facebook in that sense similar to Google as an ad platform. Google has been
threatening European publications that are refusing to allow it access to
reader data that it will cut them off from the advertising avenues given it
already gets permissions through its google accounts.

Seems like privacy laws and social pressure almost morphing into anti-
competition sentiment for the big ad platforms.

~~~
gpapilion
I keep feeling this is a bigger part of the story and aligned with cost
cutting shirts at larger companies.

------
raxxorrax
Honestly, Facebook weathered all their challenges quite well. I don't use
Facebook, but compared to other social media sites they resisted pressure in
the interest of their users, so kudos to Zuckerberg.

I hope they keep strong against ambitions to scrap politically uncomfortable
content. Should give the people removing 'hate speech' a rise though. Or
therapy, it is probably needed. Would have been easier to ignore all that, but
well...

------
ashtonkem
If I were FB I’d be more worried about this:

Spending time on FB is deeply unpleasant. I finally deleted my account because
I realized I hated spending time on it, and that outweighed any potential to
communicate with long lost friends.

~~~
toofy
Yeah, I think a lot of the people who don’t think the ad boycott will be
impactful are not taking into account how fb is just plain unpleasant to use
now.

This boycott is also causing a conversation to occur where people are
considering other options that are comparatively just a more pleasant
experience.

In family alone, in the last month I’ve had a few different older family
members who were looking for alternatives. Two of them (a couple of
grandparents) surprisingly, were incredibly interested in setting up a family
Discord server, so a couple weeks ago I helped them create one. In just a
couple weeks it’s already up to like 25 family members, and it’s wildly
active.

We started out with just a couple different channels–a holiday events channel
so people can post holiday/birthday type party information and the general–but
already some of the younger (like 14-15yo) have their own channels set up for
themselves and real world friends. Considering it’s only a couple weeks old
and seeing the activity it has is pretty wild to see.

One of the most striking things I’ve noticed is, the conversation is entirely
different from something you would see on FB, it feels more natural somehow.

fb has just become an unpleasant experience, and not only because it makes
people not like each other and the distrust it seems to cause, but it’s just
not at all a pleasant experience when compared to some of the alternatives.

------
neonate
[https://archive.is/jyjNn](https://archive.is/jyjNn)

------
SimianLogic2
Does brand advertising even work on FB? All these big brands pulling out seems
like PR more than anything that is really going to hurt FB long term. Seems
like the big money is in D2C and retargeting, which (AFAIK) is not cost
effective for the big brand advertisers.

~~~
2sk21
This is exactly Ben Thompson's point too. In the Dithering podcast he
mentioned that brand advertising simply does not work well on Facebook.

------
tosser0001
The key to making the feed more tolerable from an advertisement perspective is
to methodically remove all the "interests" they've collected about you:

[https://www.facebook.com/ads/preferences/](https://www.facebook.com/ads/preferences/)

Advertisers buy into Facebook's ontology in order to target the ads. If you
have no interests you'll likely not get targeted. Very few advertisers reach
out to generic "male in their 30s", etc.

Then turn of all the other setting such as "Ads based on data from partners",
etc.

~~~
ldd
Thanks!

The only thing that worried me is that Facebook sees me as someone with "Close
friends of Women with a Birthday in 7-30 days"

That just sounds sleazy.

~~~
tosser0001
It would be interesting to know how they've built out this ontology. I'm sure
they seeded it with something that they acquired from some company that
specializes in this sort of thing.

I think that's how they got in trouble a few years back because their initial
one had subjects like "Nazi", etc., and you could buy ads targeting people
interested in Nazis. I'm sure they've since gone through and methodically
cleared out those sorts of subjects.

~~~
NoodleIncident
The "company that specializes in this sort of thing" is called... Facebook.
They look at your friends and their listed birthdays to generate an ad
category...

------
bronzeage
Facebook aren't infallible. Nearly every social media went parabolic growth so
far. It's inherent to social media. It growths while the network effect
encourages people to talk about it and join it, it wanes when interest fades
and people you don't want to see end up there, and you grow tired of seeing
them, and as people who you joined to socialize with leave, you leave too.

Facebook will eventually fall. They will desperately try to buy their
competition. But the inherently parabolic behavior of social networks will
catch up with them and eventually one competition will not agree to be bought.

The most interesting part is that those networks don't realize their
inherently parablic growth and usually ending up behaving like they are still
growing exponentially at the peak of their growth, quickening the decline.

~~~
scarface74
Your theory is based on other social networks that were both never as big or
mainstream and that didn’t have the money to buy up competitors.

~~~
tennineeight
GP also forgot about Snapchat, the one competitor that did not agree to be
bought. Facebook, in response, just copied Snapchat features in Instagram, and
waited them out. Because they could.

------
partiallypro
I just wonder if some of these advertisers will notice if their brand
advertising is even necessary when you're already household name. I also
wonder if the boycotts will lower the cost of ads across the platform in
general because you have less people competing for space.

~~~
PedroBatista
Big brands need to spend quite a bit of money to keep the brand recognition
going. That's why they spend what they spend on FB and also a few millions on
1 day events with limited reach but "high value".

It "works", but it really can't be analytically measured ( isn't that
convenient? )

~~~
catalogia
Consider the case of starbucks: I think the combination of people sticking to
daily routines, ubiquitous store placement, and the headaches a heavy caffeine
consumer gets when they stop will ensure their brand recognition stays high
even when they no longer advertise on facebook.

~~~
PedroBatista
Yes but most companies aren't in that business and don't have a giant
billboard in every street corner in all cities ( at least it looks like it ).

It's an expensive billboard but the billboard it self generates the revenue
and the cups are the flyers that infiltrate every corner of society. Most
companies have to fight for attention every second of the day.

the ROI? who knows but most CEO's are not willing to learn the answer if it's
"you failed as CEO because you didn't spend enough on marketing and now it's
too late".

Also, nobody was fired for buying IBM.

------
gentleman11
Of all the reasons to boycott Facebook, why did it have to be their free
speech / anti-censorship policy?

I am proud to have avoided Facebook for years now due to privacy and abuse of
skinner-boxing

------
jiveturkey
no sub, so can't read, but do I need to? the reason is quite obvious.

1\. the entire reason there can be a boycott _at all_ is that FB is a primary
ad platform. if FB were some insignificant flea of an ad network, a boycott
wouldn't matter at all and wouldn't be organizeable, and not newsworthy.

2\. having that kind of reach is powerful. every dollar spent there pays back.
i know that many producers can't even spend enough on FB ads for lack of
capital. There are entire finance companies built on giving you capital
_specifically so you can increase your FB spend_. One of them has been
highlighted here before, I can't recall the name though.

So there you have it. don't buy ads, watch your revenue drop. Advertisers are
only boycotting (for the most part) because it's convenient. They want to
reduce their spend, anyway. Once they are ready to increase their spend,
they'll be back and be silent on it as well.

It's just so reminiscent of CSR. I'd actually collect the list of boycott
companies, and once they return, boycott them. But it isn't worth the effort.
I am not using their boycott as a virtue signal. It's just deceptive
advertising, as usual.

------
segmondy
They shouldn't be too cocky, all someone has to do is start a boycott campaign
of companies still advertising on Facebook which might place pressure on those
companies to drop off from Facebook. For these big companies, they might also
be shocked if they notice no change in their sales after dropping off from
Facebook.

------
triangleman
Reddit deleted the_donald? WTF?

~~~
orbifold
Yup and they censor any mention of thedonald.win which is a clone of the
subreddit.

~~~
whytaka
I've seen multiple mentions of thedonald.win on reddit. Perhaps whichever
posts you'd read that mentioned it also contained rude content?

~~~
orbifold
Well to be more accurate I saw a moderator claim that any comment that
mentions it gets flagged to him and even if he allows the comment, it will
reappear in the moderation queue.

~~~
newacct583
One mod on one subreddit? Which ones? Again, it is simply not true that this
is being generally censored. That string is everywhere on reddit:

[https://www.google.com/search?q=site%3Areddit.com+thedonald....](https://www.google.com/search?q=site%3Areddit.com+thedonald.win)

~~~
thearchitect1
I just posted a comment saying thedonald.win on my own subreddit and sure
enough it was gone.

------
thoughtstheseus
If only you could buy the ad-space yourself and sell it. Users select who gets
to show them ads.

------
gentleman11
Of all the reasons to boycott Facebook, why did it have to be their free
speech / anti-censorship policy?

~~~
leadingthenet
Late stage capitalism

------
missesthepoint
I think many observers are missing the point here. It is not merely that
Facebook can weather the big spenders leaving their platform (which may _also_
be true).

Imagine Biden becomes the next president. There will be far less outrage porn
in a year or two, which would be very bad for Facebook. In other words, less
outrage porn = less engagement. Less engagement = less advertisers. Even if
the big companies make only 6% or so of their revenue, a 50% drop in
engagement will be a tremendous loss for Facebook. Unlike Google ads, which
are a function of economic activity, Facebook's ads are not based on search
intent. I suppose they could be called more a function of people's psychology
and need to engage with social media. So without sufficient levels of
engagement, Facebook will lose a lot of money very quickly.

On the other hand, if Trump becomes president again, he will be less likely to
significantly curb Twitter, since he needs it really badly. And he is more
likely to go after the other social media platforms. At that point he wouldn't
even be running for re-election again, so he can act as pettily as he wants
and do a lot of showmanship to please his base. Facebook wouldn't want to be
on the wrong side of his ledger.

Lastly, there are only a few months to go until the election. The likely
damage in that short time span is far smaller than the possible benefits.

Facebook is just hedging its bets here.

~~~
tw1912112
Facebook isn't hedging any bets, it's just not giving into the mob like
behavior by the advertisers. Facebook knows that the advertisement dollars
were anyways not going to be coming to FB due to the recession, and if they
take a political stand at this moment, then they are inviting regulatory risks
from the other side.

Facebook is staying neutral, and not giving into any pressure, mostly because
Zuckerberg's job is safe and FB has plenty of cash!

