by Avery Swartz,
Published in The Globe and Mail, April 18, 2018
Click to read on The Globe and Mail's website
In the wake of “fake news,” alleged Russian interference with the 2016 U.S. presidential election and the recent Cambridge Analytica privacy scandal, the public outcry to #DeleteFacebook is echoing around the internet. But what about small businesses who rely on Facebook advertising to reach customers? Will they pack it in and swear off the social media platform, too?
Facebook advertising can cost as little as $1 a day, and successful ad campaigns can be created for $100 or less. It’s hard to find any other online advertising platform that can deliver results for such a small investment. Combine that with Facebook’s user-friendly Ads Manager interface and sophisticated analytics and ad reporting tools, and you have a compelling solution that small businesses can’t resist.
Recent U.S. congressional testimony by Facebook chief executive Mark Zuckerberg and fallout from the Cambridge Analytica scandal has made many small-business owners take a greater interest in exactly how Facebook works and how the ad platform functions.
Facebook doesn’t sell its users’ data to advertisers. It sells access to data, so advertisers can target their ads to specific audiences on the platform. This feature – the ability to match advertising to customer segments – is the main draw.
Targeted advertising is nothing new. It’s been around much longer than the internet. Businesses with deep pockets advertise on television, buying commercials on whichever TV shows share their customer base. Small businesses target their audiences, too. A small business may choose to advertise at a trade show that draws a particular crowd or distribute door-to-door flyers in a certain neighbourhood.
What makes Facebook so compelling is that its targeting tools are effective. So effective that there’s a conspiracy theory that Facebook is eavesdropping on people’s conversations through their smartphones and using that insight to serve ads. People find it hard to believe that computers could know so much about them, even though they are voluntarily feeding their information into the machine. For private citizens, Facebook’s targeted advertising is creepy. For advertisers, it’s captivating.
At the end of March, Facebook abruptly announced the shutdown of Partner Categories. The feature inside Facebook’s advertising targeting tool allowed for audience targeting based on offline criteria provided by third-party data brokers (for example, census data). Facebook claims this move will help improve people’s privacy on Facebook.
In reality, there isn’t as much need for Partner Categories, as Facebook’s own targeting tools are increasingly more sophisticated. Facebook doesn’t need third-party data brokers – it already has enough customer data for advertisers to play with. By not having to pay external data brokers, Facebook will keep more of the ad dollars it brings in. Facebook also continues to develop sophisticated artificial intelligence to analyze user data. All this will further solidify, and increase, Facebook’s hold in the online advertising marketplace.
Once the dust settles on the Cambridge Analytica issue and Mr. Zuckerberg wraps up his apology tour, Facebook will continue to thrive. A recent public-opinion survey from Angus Reid shows that the majority of Canadians will continue to use Facebook. Twenty-seven per cent won’t change their Facebook behaviour at all; 41 per cent will review their privacy settings; and 6 per cent will take a break from the platform. Only 4 per cent plan to delete their accounts.
If advertising on Facebook feels wrong, by all means, #DeleteFacebook. But for many of the small businesses I advise and teach, it’s business as usual. Facebook advertising, for now at least, is too effective to quit.