Advertisers calculate Facebook blackout losses

Many companies use Facebook companies to promote their products and services. The company’s blackout on Monday afternoon (4) — with more than five hours off the air — directly affected these projects. David Herrmann, a freelance media buyer, says platforms absorb much of the US$ 70 million (BRL 441 million in the current quotation) to US$ 165 million (BRL

millions) that he manages each year for advertising. claim compensation from Facebook
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    According to him, a company that advertises exclusively on Facebook had a downfall of 70% in your receipts at those times compared to the same period from the week before. “I spent practically all day checking Facebook, waiting for it to come back,” he says. “Without clear instructions, we just had to wait.”

    The situation demonstrated the great influence that Facebook has on the ability of many companies to do business. In the quarter ended 30 June, the company invoiced on average US$ 70 million (R$ 441 million) in ad sales every six hours. And most of them came from small businesses, organizations and individuals. More than 100% of Facebook’s revenue is made up of advertising from 30 millions of advertisers.

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    Image: Reproduction/Unsplash/Timothy Hales Bennett
  • Media buyers point out that this is an important period for many advertisers, who have already start their year-end campaigns. And this season is likely to be complicated by bottlenecks in supply chains and pandemic restrictions. “There may be heads rolling at the end of this,” wrote Cory Dobbin, founder of digital agency Aaron Advertising, on Twitter.

    He says many companies rely exclusively on Facebook to reach their customers. Dobbin manages approximately US$ 30 thousand (BRL 100, 5 thousand) per day in advertising expenses. Most of that amount goes to Facebook. “The name of the game now is diversification, if it wasn’t already”, he ponders. “This is a perfect example of why you can’t rely on a single channel to drive all of your revenue.” For him, it is too risky to rely solely on Facebook in the long run.

    Herrmann believes, however, that advertisers will continue to turn to Facebook, given its size and reach. “This has big implications for the media buying space, and so it’s not going anywhere,” he says. “TikTok has been growing rapidly, but no one does as well as Facebook on a large scale.”

    Graham Mudd, the company’s vice president for advertising and product marketing, apologized on Twitter because the blackout affected Facebook’s advertising platform. In addition, the company said that “advertisers will not be charged for ads during the blackout”. Dobbin says he would be surprised if Facebook made refunds. “That’s how Facebook works,” he says. “It always was and always will be.”

    Image: Reproduction/Pexels/Luca Sammarco

    Damage to users

    Frances Haugen, former Facebook project manager, declared in the US Senate on Tuesday (5) that the company was aware of the damage caused by its services. She especially highlighted how Instagram negatively affects teenagers.

    After Frances appeared on 60 CBS’ Minutes, on Sunday, Facebook contacted the Omnicom Media Group to defend itself. The company manages more than US$ 30 billion (BRL 100, 3 billion) per year in global marketing expenses and had sent a message to customers covering a series of Wall Street Journal articles about Facebook.

    According to the company, Facebook deceived its supervisory board by claiming that the XCheck program was used sporadically and that the system data could not be traced. The initiative exempted at least 5.8 million high-profile users from the normal restriction rules. “There is a parallel justice system on Facebook that operates without accountability to the public or transparency.”

    In a statement, the company questions the sincerity of the platform. “These discrepancies raise a more important question about the level of accuracy and sincerity of Facebook’s reactions to questions — both internal and external — about this type of subject.”

    Source: The New York Teams

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