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Digital Advertising Was Already Having a Bad Year. The Facebook Boycott Could Change It For Good

Digital Advertising Was Already Having a Bad Year. The Facebook Boycott Could Change It For Good

Digital advertising has had a rough time over the past few months. While consumers are hunkered down with stay-at-home orders, they weren't

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Digital advertising has had a rough time over the past few months. While consumers are hunkered down with stay-at-home orders, they weren’t spending money on discretionary items like new shoes, home decor, or vacations. As a result, brands began to pull back from spending on digital ads. Publishers and platforms that depend on ad spending have felt enormous pressure on their revenue at a time when survival seems like it’s largely out of anyone’s control.

The challenges facing digital advertisers really fall into three categories, not entirely related, but also connected in some very important ways. 

The first is that digital advertising was already under pressure, primarily from privacy advocates who believe that platforms and advertisers should be more clear about the information they collect in order to tailor ad experiences to individual users. 

Apple, for example, introduced additional anti-tracking features with the announcement of iOS 14. Now, whenever you launch an app, your iPhone will ask if you want to let that app track your activity for advertising purposes. It also gives you the ability to turn off in-app tracking altogether, instead providing advertisers with an anonymous identifier. 

The second is that the Covid-19 pandemic has made it difficult for advertisers to continue to spend money with so much economic uncertainty. Consumers who may have lost their jobs aren’t likely to spend money on anything but the essentials. 

Finally, there’s Facebook. The world’s second-largest–and arguably most efficient–advertising platform is under extraordinary pressure as it grapples with the way it handles incendiary, misleading, and often outright racist content. 

The problem is that digital advertising works. Not only that, but it’s the most efficient form of advertising since it’s the easiest to track. Even a small business can determine exactly what ad a customer clicked on, where it was displayed, and what action that customer took on their site. Then, based on what they bought, or more importantly, didn’t buy, the business can tailor future ads to re-target that same customer. 

If you’re a small business, it’s both extremely effective. If you’re a platform like Facebook, it’s extraordinarily profitable. If you’re a consumer, it’s kind of creepy when you think about it. Most of us, however, try not to think about it.

Which brings us back to Facebook. Right now, consumers are thinking about it as they become more aware of whether or not the brands they love are associating themselves with “hate.” The #stophateforprofit campaign now has 400 companies that have pledged not to advertise on Facebook or Instagram during the month of July, with others committing to pause social media advertising altogether. 

That list, which started with companies like Patagonia, REI, and The North Face, now includes major brands and big spenders like Verizon, Unilever, Ford, Williams-Sonoma, Levi’s, Honda, Starbuck’s, Coca-Cola, and Lego. As a result, Facebook’s Founder and CEO, Mark Zuckerberg–whose initial response has been met with even more criticism–has agreed to meet with the groups that launched the boycott.

That the company, and its usually stubborn-minded boss, are taking any steps at all tells you that it genuinely believes the movement may have reached a tipping point. At a minimum, advertisers have become acutely aware that their brand is directly affected by the platforms they associate with.

I suspect that it’s still too early to calculate the long-term impact of the last few months on digital advertising, but my sense is that it won’t ever be the same. It’s no longer okay to reach customers at the cost of seeming to supporting content that betrays their–or your–values. That’s as true for small companies as it is for giant corporations.

Even if nothing else, this alone would be an overwhelmingly positive development. Companies are realizing that their choice of platform sends as strong a message as the ads they run. That shift in thinking could change everything.

The opinions expressed here by Inc.com columnists are their own, not those of Inc.com.

This article is from Inc.com

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