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Short-changed by Facebook

30 Nov 2016  |  Bob Wootton 
Short-changed by Facebook

If you bought a jacket with only one sleeve, you'd seek a refund, wouldn't you? So why is no one kicking up a fuss over Facebook short-changing advertising customers, writes Bob Wootton

So much has been written on the US election and Brexit votes that there's little point in adding, but forgive me one comment.

In both cases, the 'losing' side - the establishment, commentariat, chatterati and certainly the liberal ad industry - quickly turned on the winners, condescendingly vilifying them as unintelligent and bigoted. Campaign Associate Editor Kate Magee puts it rather well here.

Such has been the outpouring of 'liberal' bile from my Facebook 'friends' that I pretty much had to abandon my timeline. Whether on university campuses or among our industry, liberals are in danger of sounding as bigoted as those they oppose.

Talking of Facebook, onto serious stuff. It's a while since it 'came clean' about overstating its video views by 'around 40%'. I touched on this in my last column but now revisit at greater length.

There's understandably been a wodge of editorial comment - here's what the Wall Street Journal had to say - and a lot thrown up by Facebook too. Protracted 'explanations', apparently seeking to diffuse, some of which only seem to exacerbate the problem and draw attention to the pitiful 'standard' of what constitutes a view. No wonder some are at last questioning online ad effectiveness.

The WSJ reported that Facebook 'would be meeting its advertisers during New York Advertising Week'. Nothing seemed to come of that, though on the bright side the issue's persistence does seem to have forced it to admit (some) independent third-party verification.

Recently, it announced a(nother) 'Council', based in the US and comprising clients, to oversee such things. I'd have thought they would have already their hands full enough given that husbandry of ad budgets came into some question in the ANA report of their own collective inception.

With the annual trading season - and the tradition of tough deals being done between the big buying sheds and the major media owners - now in full swing, the issue highlights a huge paradox.

In the light of the pure plays' march towards video, let's compare and contrast with the most relevant analogue (in both senses of the word) - TV.

(This is quite legitimate given the phoney war kicked off last year by YouTube's call for 24% for TV budgets to be spent with it, which Thinkbox has rightly been challenging ever since and which mercifully seems to have abated).

Without going into every difference, suffice to say that offline media buying, notably TV, is subject to scrutiny that few online buys would pass. Fractional discrepancies trigger alarm bells, so God only knows what a ~40% shortfall would do.

Online has nevertheless overtaken TV as the biggest media channel and popular wisdom has it that the big G & F now account for 80% of it and rising.

Facebook's substantial overstatement over several years is therefore worth a lot of money. In the UK alone, eight or nine figures.

Yet to the astonishment of many, there's been scant criticism, let alone mention of recompense. Kelly & Dags trod near this in their tour de force at last week's ITV Gala event.

Perhaps advertisers and agencies have quietly renegotiated and the issue is dead and won't return? If so, it would be the first time such major reparations had been negotiated in such silence. In this extremely competitive commercial world, news like that tends to leak out.

Or maybe everyone's been promised that everything is going to be all right as future pricing will redress past misdemeanours? Hmmm.

Going through the value chain - advertisers; creative agencies; media agencies; DMPs; DSPs; ATDs; SSPs; publishers - only one party has sufficient remaining interest to pursue this. The advertiser at the top.

My successor at ISBA, Mark Finney, wrote this reasonable and measured piece for Mediatel last month. It doesn't really address the core issue, which is that a great deal of advertiser money has been found to have been spent with Facebook against false promises and should therefore now be returned.

If you bought a half-empty packet of something or a jacket with only one sleeve, you'd seek a refund, wouldn't you?

So full respect to Aviva Group Brand Director Jan Gooding, who expressed outrage at the issue at a recent Mediatel event. Granted, she may have extra motivation as chair of the Publishers' Audience Measurement Company, but still - where are all the other leading marketers and their procurement colleagues?

Perhaps MediaSense* founding partner Graham Brown has it right in his thoughts for their Media Minds forum here and here. Are people as afraid of Facebook as he suggests?

This also speaks into the heart of the biggest issue of the day which is not going away. Transparency is not just about agency behaviours. Anyone peddling media on biassed or false metrics is in it up to their necks too. (Whether wilful misrepresentation, or let's be generous and instead call it the advertent omission of key truths, it's very shabby practice).

The role of truly independent metrics which are subject to proper cross-industry scrutiny and can therefore claim to be trustworthy and objective cannot be understated here. In online the respective roles of the valiant but as yet underfunded UKOM** and JICWEBS are crucial.

As the debate continues, advertisers are increasingly seeking advice on improving their own positions from independent consultancies like MediaSense. New businesses are setting up around it, like Scott Moorhead's Aperto One and disruptive new agency Blackwood Seven*** which determinedly has no financial interest in which media it recommends.

And in transparency, Independent agencies, notably The7Stars and its new Bountiful Cow sibling, have found a tangible point of difference from their network competitors in an otherwise largely undifferentiated market.


Bob Wootton is Principal of Deconstruction, an advisor to *MediaSense and **UKOM and director of ***Blackwood Seven

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