Commentary

Gnats On An Elephant's Back

Rishad Tobaccowala once famously described the ad industry as cockroaches. He meant it as a compliment, because like roaches, ad people always find a way to adapt, survive and persevere. But today, I'd like to compare the ad industry to gnats. The kind that bite the back of an elephant. The elephant in this case is a metaphor for Facebook. And as annoying as those gnats might seem to the elephant -- if it can feel them at all -- it's unlikely to change its direction. Here's why.

While the big advertisers stepping up to boycott -- or at least pause to refresh their support of social media in general -- may make a lot of noise on Madison Avenue, as well as the trade and consumer press, they're actually not that big a factor for Facebook's bottom line.

"The highest-spending 100 brands accounted for $4.2 billion in Facebook advertising last year," Brian Fung wrote on CNN.com late Friday, citing data from Pathmatics. As big a number as that might seem, it accounts for just 6% of Facebook's total advertising revenues.

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And while 6% is nothing to sneeze at, it's also probably not the most profitable amount of Facebook's advertising revenue, given the amount of support, hand-holding, and kissing-up Facebook has to do to earn it relative to the hyper-efficient, long tail that very often is self-serve, low maintenance and higher yield.

Now I'm not suggesting Facebook would want to dump Madison Avenue, but the fact that the Fortune 100 brands are not as big a deal for Facebook as they would be for -- say the network upfront, or other big media publishers -- explains a lot of things about the ad industry's current paradox with the Big 3 walled gardens in general, not just where ad boycotts are concerned.

And as CNN's Fung notes, "Much of the rest of Facebook's ad revenue comes from small and medium-sized businesses, ad executives say. It would likely take tens of thousands of them, acting over a significant period of time, to put a big dent in Facebook's bottom line."

Interestingly, someone has already started a tally. Not surprisingly, it is Luma Partners' Terrey Kawaja, who late Saturday tweeted its launch of a "Facebook Ad Boycott LUMAscape. At press-time, it had only 18 advertisers on it, and many -- like Patagonia, REI, and Ben & Jerry's -- are long-standing supporters of leveraging their ad budgets to support social causes and vote against the kind of toxic society the social network enables via its lax oversight.

Kawaja labels them the Facebook boycott's "Early Movers," and he's got a nice, big blank space for its "Fast Followers."

It would indeed be nice to see other big, mid-tail and small-tail advertisers follow suit and watch Kawaja's LUMAscape expand well beyond ecosystem proportions, because someone needs to put the kind of pressure on Facebook -- especially its founder and Chief Toxicity Officer Mark Zuckerberg -- to do what's right, because he has long demonstrated careless disregard.

"They may indeed be less sensitive to the big brands than a typical publisher or platform," concedes Kevin Lee, executive chairman of digital agency Didit, adding, "I still think this can sting, especially if the small businesses also join."

Which makes me think of another elephantine metaphor. You know the one that goes, "How do you eat an elephant?"

The answer: "One bite at a time."

3 comments about "Gnats On An Elephant's Back".
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  1. Ed Papazian from Media Dynamics Inc, June 29, 2020 at 10:22 a.m.

    Excellent commentary. Mislead by the big ad spending figures circulated constantly, many people assume that FB is the medium of choice---or even the "must buy" medium--for just about everybody, including those big TV branding advertisers. Not so. As pointed out in this article, most FB ad dollars come from what I term "mom and pop" ,small advertisers, many of them local not national in orientation. Therefore it's not realistic to expect that the likes of Coca Cola or Unilever will force FB to change by temporarily holding back their relatively small ad spend---even if it is bad public relations for FB and something of an annoyance.. Sadly----as this will introduce many other problems to solve----government  intervention and/or regulation appears to be the only avenue that might be partially effective.

  2. Robert Williams from Mediapost, June 29, 2020 at 11:28 a.m.

    Really interesting!

  3. Tony Jarvis from Olympic Media Consultancy, June 29, 2020 at 4:19 p.m.

    Insightful as always. Although the mom & pop operations may not be aware of sophisticated media planning principles and metrics, every media planner I ever worked with, and there were many, was always proud to advise me that based on using "proper"  media metrics and models, they could plan around any media platform and certainly around any media vehicle and deliver equivalent and often even better media metrics for their  advertiser client. 
    As noted in another comment on Media Post, Section 230 of the Communications Decency Act 47 U.S.C. § 230 that provides immunity to social media companies on the internet must be eliminated by Congress and these companies must be required to act as fully responsible publishers based on the same regulations applied to main stream media. 

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