Are Advertisers Losing Patience With Facebook?
Facebook's drop in daily active users isn't the 'watershed' moment everyone says it is, argues the director of MediaCom's Social Practice
21 March 2022
Meta’s most recent earnings call sent shockwaves through the advertising industry, as Facebook – the platform - reported a 0.5 per cent drop in daily active users. Share prices whipsawed, headlines called it a “watershed moment”, and emphasis was placed on the immediate losses; projections of doom-and-gloom everywhere.
And they were not entirely without merit, but nor were they the full picture – they were potentially, and purposely, misleading.
If we were to assume “losing patience” and “losing trust” as synonyms, the answer is “no”.
Objectively, advertisers are placing their trust, and spend, in Facebook as a platform. Ad revenue per user (ARPU) in Q4 grew year-on-year, and quarter-on-quarter, in every geographic territory. ARPU growth is likely to continue, regardless of the “headwinds” versus projections – daily usage may have plateaued after 18 years, but no advertiser has the budgets to reach their entire potential audience available anyway.
Subjectively, MediaCom UK have not lost patience or trust in Facebook; spend across our clients grew year-on-year, and the platform remains one of our largest digital partners. We continue to see impact, for brand and performance campaigns, validated by econometrics, uplift studies, third-party tags and all other reporting tools.
But it is becoming harder for Facebook, and all social channels, to compete for every pound of advertising spend. Where Facebook and Google’s duopoly once reigned supreme, there is now proven competition in the social space.
Mobile devices have become our first, and second, and third screens - they are the gateways to our lives. The battle for the home screen has never been so competitive, and it’s only going to become fiercer given the average UK adult spends 108 minutes across three social platforms, daily.
This means advertisers have choice, as revenue follows consumption. Competition drives innovation. Innovation fuels excitement.
It has never been a more exciting time to be on, or work with, social platforms. Whether it’s Snap and AR, TikTok and creators, Pinterest and trends, or Meta and the metaverse – none of which any platform has a monopoly over - it’s a thrilling time for consumers and advertisers alike. Platforms are constantly changing, to differentiate or challenge existing differentiations.
This isn’t to suggest that Facebook, or parent company Meta and their family of apps, are conceding advertising spend without a fight. Absolutely not.
Facebook’s in-stream proposition has, and continues to, evolve as longer-form consumption increases and user need states change, offering a different type of advertising within their environment – extended duration, sound on, 100% in-view. Marketplace holds huge, potentially unique, promise.
And then there’s the metaverse. The topic on everyone’s lips, in-and-out of adland. There is no doubt that this is the future, of advertising and otherwise. Facebook’s rebranding of the parent company to Meta is a huge sign of intent here, and advertisers and clients will be scrambling for first-look opportunities and first-mover advantages; whatever the guise.
The truth is that all social channels will need to evolve and fight to retain, gain, re-gain or grow advertisers’ “patience” or “trust” going forward, and Facebook are no exception.
Facebook’s offering holds significant promise, and The MediaCom UK Social Practice are excited to see what happens, but they’re not alone. Watch this space…we will be.