Facebook Advertising Isn’t Dead, and Here’s Why

April 5, 2018

Facebook Advertising Isn’t Dead

You may have heard rumblings that Facebook is over, everyone’s leaving and advertising on the social media site won’t be worth the money you spend. But contrary to everyone’s panic—especially if you look at Facebook’s history—it likely isn’t going anywhere anytime soon.

(And no, Mark Zuckerberg isn’t paying us to write this…though we wouldn’t say no if he wants to pass us a few billion dollars.)

Why Some Users are Upset

Earlier this year, London-based company Cambridge Analytica was caught talking about swaying elections by advertising using misinformation. One of the ways they attempted to influence political outcomes was by advertising this misinformation on Facebook.

According to an insider, the demographic information of some Facebook users was legally gathered via a mobile app (lead by Aleksandr Kogan) where users would take psychological tests. But the app also gathered demographic info on millions of friends of those users without their knowledge.

The info was then shared with Cambridge Analytica, who allegedly used it to direct deceiving ads to specific users about elections in the US and England.

Alexander Nix speaking at Web Summit sitting on couch

Alexander Nix, CEO of Cambridge Analytica

Now some users are upset that (a) their demographic info was used in a malicious way (by Cambridge Analytica) and (b) their demographic info was gathered (by Kogan’s app) without their permission.

But many others are upset likely as a result of poor terminology. When a headline says, “User’s Data Stolen from Facebook,” some may think that “data” means passwords, social security numbers and their deepest, darkest secrets. In reality, that “data” was only demographic information (which advertisers have been using since the beginning of advertising).

Screenshot of Facebook statistic of Cambridge Analytica data collection

While a lot of the blame lies with Kogan’s app and Cambridge Analytica, some users blame Facebook for not catching this right away. Facebook, however, did ban the phone app back in 2015 and ordered Kogan and Cambridge to destroy all users’ data (which they didn’t).

But Not Everyone is Mad

While you’re probably hearing war chants and seeing hashtags about everyone deleting Facebook, what you don’t see are the masses of users who are indifferent to the situation and are keeping their Facebook accounts.

There are millions of users who aren’t as upset at the situation and also don’t mind being advertised to on Facebook. Many even say that targeted ads on Facebook help them make significant purchasing decisions.

Stock Scare

Heard about Facebook’s stock lately? If you read headlines and see the fluctuations in March and July, you’d think Facebook is over, too.

Screenshot of Facebook stock drop in July

But before you jump to conclusions, take a look at the company’s performance over the past five years:

Screenshot overview of Facebook stock since 2013

The company has been growing every year since it’s launch, and as of August 2018, they’re still worth more than they were in August of 2017. Their $119 billion-dollar loss on July 26th set them back to where they were priced only three months ago, which is still triple what they were worth at that time in 2015.

These also aren’t the first stock scares they’ve had. Back in April 2014, after Facebook bought several companies with “virtually no revenue and no profits,” the company’s stock price took a small dip but bounced right back.

In November of 2016, after Russia was caught using Facebook ads in an attempt to sway the U.S. presidential election, their stock took another hit. But a few months later, their prices were higher than ever.

Screenshot with dips in Facebook stock highlighted since 2013

Reasons Why Facebook Will Survive

There are a few reasons why Facebook will likely endure this recent uproar:

It’s ingrained in our lives. Not only does a quarter of the world go on Facebook every month, but the site is used for things like app integration and keeping up-to-date with friends, companies and global news.

We have short attention spans. Remember #Kony2012? How about the BP oil spill or deflategate? We tend to have some pretty short attention spans, so most shocking events are forgotten after a month or two.

Facebook is a useful site. Like it or not, Facebook’s interface and UX makes it a great place for communicating, event planning and sharing photos and ideas.

Screenshot of Facebook's "Find Events" tool

The Summary

Here’s the quick version of what happened:

1. When people use Facebook, they add their location, interests and opinions to their profiles. In return for using the site for free, Facebook allows marketers to advertise to users using this demographic information (but never private info like names and passwords).

2. An app company deceivingly gathered some of this demographic info (but not private info like names and passwords) and gave it to Cambridge Analytica, who used it for spreading misinformation during elections in order to sway politics.

3. Some users are upset and are deleting their Facebook accounts, but many more are staying on the site, which continues to make it a good place to spend ad dollars and measure results.

Interested in advertising on Facebook? Let us know. We’ll help with the strategy, copy, and graphics to make it as easy as possible for you.

About Us

CG Marketing Group is a talented team of creatives and strategists who can make your business awesome. We like to have fun, but we’re very serious about digital marketing.

To sum us up in a single word — Scrappy. We’re always eager to branch out and apply new tactics to create successful campaigns. Our crew works hard to bring value, get results, and keep our clients happy.