Performance Marketing

Cambridge Analytica Scandal: Should Brands Hit Pause on Facebook Ads?

After news broke that a third-party Facebook app — Aleksandr Kogan’s popular personality quizzes — released the data of 50 million Facebook users to UK-based data analytics firm Cambridge Analytica, the social media giant has been in the hot seat. Despite Facebook’s announcement to improve its platform, stockholders, users, and political pundits have expressed concerns over the fine print and overall ethics of the company’s data policy.

Stocks and politics aside, we marketers wanted to know how the situation could impact brands’ existing and future digital advertising strategies. So we did what we do best: We looked at the data.

Our conclusion? Despite the passionate proponents of the #DeleteFacebook movement and doomsday headlines surrounding the Cambridge Analytica scandal, active social ad campaigns have remained unaffected.

It’s safe to say there’s no reason to hit the pause button on your existing or planned Facebook advertising.

How We Looked at the Numbers
We analyzed active paid social campaigns totaling $587,000 of media spend for the month of March. Looking at hundreds of Facebook ads, we set out to answer the following questions:

  • Has campaign reach drastically decreased?
  • Has cost per thousand (CPM) increased outside of normal fluctuation?
  • Have lower funnel objective campaigns been impacted, in terms of volume and cost?
  • Have Facebook ad actions (any user activity influenced by Facebook ads) decreased?
  • How do current CPM and levels look compared to the previous week? Month? Year over year?

CPM and reach were the first key performance indicators (KPIs) we looked at. CPM is a supply-and-demand metric that gives advertisers an indication of the market environment — or, in Facebook’s case, the ecosystem of placements. A drastic change in either the number of advertisers (supply) or users (demand) can greatly affect CPM, and therefore overall campaign performance.

One of the greatest threats to Facebook and advertisers since the Cambridge Analytica scandal is the #DeleteFacebook movement, which encourages users to delete their Facebook accounts. Many people may take a less extreme approach and delete the mobile app, or simply limit time on the app — all of which could hinder paid campaign performance.

If Facebook’s monthly active user base took a hit from the #DeleteFacebook movement, we would expect to see the following impact on CPM and reach on a significant scale:

  • Reduced potential reach (potential number of users the ad could reach within targeting parameters)
  • Reduced actual reach (unique number of users who saw the ad)
  • Reduced actions (actions can be link clicks, conversions, or engagement)
  • Increased CPMs

However, when we looked at our clients’ campaign data, it showed a normal pulse for reach, impressions, CPM, and actions, based on budgets, targeting, creative, flight dates, and other variables that factor into performance.

On the supply side, the scandal could have a similar, but positive, effect for advertisers. As more advertisers pause media spend, competition in the newsfeed decreases and supply decreases. In theory, decreased competition correlates with a decrease in CPM, resulting in cheaper impressions and potentially greater reach and better performance.

Although we acknowledge our own data does not represent all advertisers and ads on the Facebook platform, we believe these early insights are good indicators of future performance — and can put you at ease when planning upcoming campaigns.

Why weren’t ads impacted by the Cambridge Analytica controversy? There are most likely two primary reasons: not as many people are deleting their accounts as headlines lead you to believe, and the number of placements available.

The number of #DeleteFacebook supporters pales in comparison to the size of Facebook’s ecosystem, including Instagram, Messenger, in-stream videos, Instant Articles, the Audience Network, and more. Plus, it looks like the #DeleteFacebook trend is already on the decline. Twitter mentions decreased from 126,000 to 74,000 from March 21-22. Compare that to the #DeleteUber movement, which peaked at 182,000 Twitter mentions on January 29, 2017.

In fact, Facebook’s ever-evolving ecosystem of placements will most likely continue to act as a “shock absorber” by allowing advertisers to reach users on multiple devices, placements, and platforms. This means someone can be served a Facebook ad even if he or she deleted a Facebook account.

As ad inventory continues to grow and placements become more native and ubiquitous, the topic of user data privacy will become increasingly important for both Facebook and its advertisers.

Let’s Talk About Customer Data
The Cambridge Analytica news and the Facebook data policy changes that followed are related to data collected by developers; this does not include first-party data from CRM lists, the pixel, or custom audiences.

Brands’ customer information is used in an anonymous, privacy-safe way that lets them reach their audience on Facebook while keeping people’s data private and secure. Facebook uses “hashed” audience data, and not personal identifiable information (PII). Hashing turns the data in your customer list into short fingerprints that can’t be reversed.

For reference, Facebook’s full policy changes are below:

  • Review our platform. We will investigate all apps that had access to large amounts of information before we changed our platform in 2014 to reduce data access, and we will conduct a full audit of any app with suspicious activity. If we find developers that misused personally identifiable information, we will ban them from our platform.
  • Tell people about data misuse. We will tell people affected by apps that have misused their data. This includes building a way for people to know if their data might have been accessed via “thisisyourdigitallife.” Moving forward, if we remove an app for misusing data, we will tell everyone who used it.
  • Turn off access for unused apps. If someone hasn’t used an app within the last three months, we will turn off the app’s access to their information.
  • Restrict Facebook login data. We are changing Login, so that in the next version, we will reduce the data that an app can request without app review to include only name, profile photo and email address. Requesting any other data will require our approval.
  • Encourage people to manage the apps they use. We already show people what apps their accounts are connected to and control what data they’ve permitted those apps to use. Going forward, we’re going to make these choices more prominent and easier to manage.
  • Reward people who find vulnerabilities. We will expand Facebook’s bug bounty program so that people can also report to us if they find misuses of data by app developers.

At the end of the day, we still believe Facebook is the best platform for effective social media advertising. Says Marcus Cumby, Ansira’s Facebook partner manager, “We’ve been encouraged that most of the businesses we’ve spoken with last week are supportive of the platform updates we shared and have expressed confidence that we’ll respond to these challenges, as we have in the past. As Mark [Zuckerberg] acknowledged in his post, we know it takes longer to fix all these issues than we’d like, but we are actively working to make our platform safer and believe that this situation will help us become a better partner and company as a result.”

By Augusta Rizzardini

Augusta has more than seven years of professional experience in social media marketing, so she knows the importance of staying agile in this ephemeral world.