The Cambridge Analytica Scandal Won’t Stop Advertisers

Facebook is running out of eyes to blacken in the wake of revelations over the weekend that Trump-affiliated data firm Cambridge Analytica harvested information from 50 million Facebook accounts without permission.

But as long as ads continue to perform on Facebook, the scandals won’t lead advertisers to pull back their spend.

“We may see individuals delete the app, but this won’t change spending patterns,” said Pivotal analyst Brian Wieser.

Advertisers follow the audience, said Melissa Parrish, VP and group director at Forrester, and as long as a channel “works,” they’ll continue to use it.

If advertisers were going to stop spending on Facebook because of bad news, there would have been a meaningful decline last year or even the year before with news of Facebook’s “fairly serious” measurement errors and its fake news problem, Parrish said.

“The only way this scandal affects Facebook advertising is if consumers grow weary and wary of Facebook and start to spend less time on the platform,” she said.

Indeed, Facebook did report a slight dip in North America daily active users during its last earnings call.

But Facebook is still far bigger than any other media platform in the world, other than Google.

“And if not Facebook, where is an advertiser going to go if they need digital media? Verizon?” Wieser said. “Well, that’s the No. 3 platform.”

And while Facebook may be getting a PR beating, advertisers won’t be guilty by association if they continue to advertise through the platform. Brands that advertise on Breitbart, for example, might cause consumers to blacklist a product. Those that advertise on Facebook are just among the more than 5 million brands that do.

Wieser likened the phenomenon to the many controversies that swirl around the NFL. Some viewers take offense at players who take a knee, while others don’t tune in because of the head injury issue. But, at least for now, advertisers aren’t pulling back on spend against the sport. They probably will, though, if viewership tanks.

Even so, the Cambridge Analytica episode is a major headache for Facebook, which has been putting out fires and popping proverbial Tylenol since mid-2016 with the first whisperings that Russian operatives had exploited its ad platform to help sway the US presidential election.

The most recent headlines are just more evidence of systemic problems at Facebook. The platform has been under increasing scrutiny from Washington on both sides of the aisle as it struggles to police its platform.

And Cambridge Analytica’s breach revolves around data that was permissibly collected by an academic researcher named Aleksandr Kogan, through an authorized app he’d created in 2013 – standard operating procedure at Facebook, although the type of data that could be collected through its API was far more expansive back then, including profile data on a user’s network of friends. This type of collection has since been barred by Facebook.

The leak happened sometime between 2013 and 2015 when Kogan shared that data with Cambridge Analytica, which he had no right to do.

Although Facebook knew about it, it didn’t disclose the fact and didn’t make a robust enough effort to ensure that Cambridge Analytica deleted the wrongfully shared data. Cambridge Analytica says it deleted the data, but media reports and former Cambridge Analytica contractors say otherwise.

Facebook suspended the accounts of both Cambridge Analytica and its parent company, SCL Group, just hours before The New York Times and The Observer in the UK published expansive stories on Cambridge Analytica’s shady dealings with Kogan.

It’s a hot mess, but advertisers are far more likely to make media decisions “almost exclusively based upon their own individual tracking and performance” rather than on external factors, one media exec told AdExchanger, nothing that advertisers “would shift dollars only once a negative impact was measured and identified.”

That’s not to say advertisers and agencies aren’t getting more cautious. Another media executive told AdExchanger that internal guidance was issued to team members at the agency this weekend about being more proactive when vetting third parties that share or have access to data on Facebook.

But don’t expect advertisers to cross Facebook off their media plans.

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Advertisers, Get Ready To Go Over The Top

by Bettina Hein

This will be the year the cable TV bundle dies a sudden death.

I know, the “TV is dying” cry has echoed time and again. But as audiences continue to consume content across online video, over-the-top (OTT) and TV, there will be increasing pressure for them to converge into a single integrated advertising buy – one that offers marketers an unparalleled combination of reach, targeting and audience data.

In the coming months, major online video and OTT providers, such as Google, Facebook, Amazon and Apple, will aggressively expand their streaming offerings to retain audiences and better serve advertisers. This will force at least one of the large cable TV providers to make a significant business model shift, such as developing an affordable streaming offering that is highly configurable to viewers’ tastes.

It’s been nearly a decade since Netflix and Hulu launched their initial OTT streaming services, just as many millennials were graduating from college and keen to avoid cable bills. This generation has led the way in the cord-cutting phenomenon; as of July 2016, nearly 40% of US millennial households relied solely on internet streaming and broadcast.

The OTT pioneers have continued to drive innovation, and as their market share grows, advertisers are taking serious notice. Roku’s recent partnership with media-buying behemoth Magna, which represents major brands such as BMW and MillerCoors, is a signal that mainstream advertisers are embracing the enhanced targeting offered by digital television, and they are driving those investments by shifting dollars away from linear TV.

Additionally, viewing options have proliferated: Amazon and Apple – neither of which have typically participated in the advertising supply side – are exploring ad-supported models for their robust streaming content offerings, Instant Video and iTunes. HBO Now has led cable networks in circumventing cable providers with direct OTT services, and traditional telecoms like Verizon have sought to bolster internet revenues through acquisition.

Of course, no one would expect the walled gardens to merely watch the OTT race stream by. Google, Facebook and Twitter have spurred shifts in viewing trends – as the distinctions between professionally produced and social content have eroded – and have built platforms designed to keep viewers consuming content within the walls for as long as possible.

The platforms spent much of 2016 addressing a key weakness in current OTT offerings: live viewing of popular events, ranging from presidential debates to Thursday Night Football and the Academy Awards. As the walled gardens’ live video capabilities become increasingly sophisticated, they’re creating more competition for linear networks by opening the distribution doors to brands and creators.

All indications point to social networks expanding heavily into OTT in 2017, with investments designed to appeal to consumers and advertisers alike. In the past few weeks, Google has revealed plans to improve YouTube ad performance by incorporating search history into targeting, while the financial community has openly speculated about an impending YouTube television service launch.

In the meantime, Google is partnering with broadcast networks seeking to get in on the streaming action and monetize their traditional TV content, like CBS’s forthcoming YouTube Unplugged live stream. While Facebook has kept its strategy closer to the vest, it’s reportedly building its own streaming TV app to encourage longer video viewing, and I expect moves from Facebook later this year – perhaps via an acquisition of an established OTT pure-play provider.

So what does this all mean? Viewers will increasingly take advantage of expanded live and traditional programming within their OTT platforms of choice, and cable providers will be forced to respond with a survival mechanism: the rollout of new streaming packages to counteract the drop-off in linear viewership and cable subscriptions.

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