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Id be curious to see how potential reach is affecting revenue. Like the article says the only way it has an impact on revenue is through media planning. But it
by soared 6y ago
Id be curious to see how potential reach is affecting revenue. Like the article says the only way it has an impact on revenue is through media planning. But it seems like very few large advertisers would move some budget off Facebook if potential reach was 10% lower. Very few advertiser’s budgets are constrained by audience size.
This honestly doesn’t seem all that terrible, especially compared to their past of inflating actual performance metrics. Yeah they should’ve fixed it, but adtech platforms have hundreds of metrics with little opportunity to verify them so I’m sure it’s nowhere near the worst example.
- bogwog 6y ago> But it seems like very few large advertisers would move some budget off Facebook if potential reach was 10% lower. Very few advertiser’s budgets are constrained by audience size. Why wouldn't an advertiser invest less in a campaign if it reached less people? That's why companies are willing to pay so much more for a superbowl ad than a regular TV ad, because they have more reach. The problem I think is that a lot of advertisers, especially smaller ones, wouldn't want to risk pissing Facebook off with a lawsuit. Plus even if Facebook misleads advertisers in a way that results in them spending more money than they otherwise would...the fact is, Facebook could likely double or triple their current prices and those same advertisers would still pay it because they have no choice.
- indymike 6y ago"The problem I think is that a lot of advertisers, especially smaller ones, wouldn't want to risk pissing Facebook off with a lawsuit. Plus even if Facebook misleads advertisers in a way that results in them spending more money than they otherwise would...the fact is, Facebook could likely double or triple their current prices and those same advertisers would still pay it because they have no choice." If the ads don't work, or do not deliver enough results for the price, the advertiser will take their spend somewhere else.
- davidivadavid 6y agoThis simple mechanism seems to escape a lot of people, it seems. Anyone moderately familiar with a concept like ROAS, even with its limitations, should be able to avoid making such wrongheaded arguments.
- bluGill 6y agoThe big advertisers are doing this. They know their real numbers because they track results. They don't care what facebook reports, they care about results vs costs. If between fraud and ads that don't work only 1% of the ads result in a customer, then the cost to get a customer is 100 times the cost to get an impression: from there is is easy math to decide if that is a worthwhile cost of sale to buy all 100 ads to reach 1 customer. If FB would/could cut down on fraud the cost of sales would go down making their ads more valuable.
- soared 6y agoAgencies/big brands look at each digital channel and how much they could potentially spend reaching their target market and then assign budgets months in advance. So if the potential spend on Facebook is lower, it may get less budget in the plan because the agency knows they won’t be able to spend more budget there. My initial wording is weird.
- hobs 6y agoSo your last sentence seems to let them off even more than they are already being let off; given their take of billions of dollars why should we give them extra leeway to keep fucking up?
- soared 6y agoI just don’t think this is as major as many news outlets will make it seem.