Facebook advertising expenditure not taken a hit despite current turmoil

Despite the Cambridge Analytica scandal and subsequent uproar, Facebook’s advertising business may not be taking a significant hit. Indeed, the company’s shares increased 2.7% on Thursday following a session between reporters and Zuckerberg, who said that a #DeleteFacebook campaign and advertisers leaving the platform may not have had a significant impact.
Similarly, 4C Insights, the media company, affirmed that spending on its social and mobile platform had increased during the first quarter of 2018. Snapchat was performing strongest for revenue growth at 234% followed by Instagram at 136%. Aaron Goldman, CMO for 4C Insights, explained:

“We’re seeing continued strength for Facebook advertising despite the negative headlines. For some time now, marketers in the UK have been actively preparing for GDPR so they are comfortable dealing with issues pertaining to data collection. In this case the main issue is not related to advertising and the repercussions such as removal of Facebook Partner Categories have not had a material impact. Targeting solutions like those offered by 4C rely on public engagement data with brand content, not user-level access, so we expect further growth.”

It’s likely that the scandal will however have some negative effects. For example, Facebook reported it would end its Partner Categories which let advertisers tie in offline shopping data. Acxiom, a company that provides such data, saw its shares drop following the announcement.
However, that doesn’t mean advertisers won’t be able to use offline data. They will just have to bring in their own, according to Facebook.
A real danger to Facebook’s targeting algorithm is that some users may begin to restrict more of their data following an updated privacy rollout across the social network.
It remains to be seen how the latest news will affect Facebook in the long run.

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