While privacy issues are top of mind for users of the Facebook platform, the biggest threat to the social network at this point in time is advertisers questioning Facebook Ad ROI for their marketing budgets.
Many advertisers are beginning to chime in with regard to their unhappiness with the expense to advertise on the social platform that has openly admitted to not always charging the correct amount for ads. Combined with a low return on investment on video ads, companies are starting to wonder why Facebook is dominating their ad spend.
Advertisers Scaling Back
Several advertisers have begun to thoroughly examine their media commitments to the Facebook platform. Many have notified their marketers and agencies they need to hold Facebook accountable for how it helps drive business growth, rather than just buying ads for the sake of buying ads on the platform due to Facebook’s claimed scale and broad reach. With businesses making changes to how they plan and buy their media, it has inevitably pushed them to question the ROI of Facebook ads.
According to Digiday, Adidas is just one of the many advertisers reassessing its relationship with the social network. What Adidas does know is that posts on Facebook drive traffic to their e-Commerce site, but beyond that there is little idea as to what the ads actually do. What Adidas has already stopped doing is buying video ads on Facebook. While they have not ruled out other cuts, there won’t be any further decisions until there is a media review.
Facebook Isn’t Getting Any Cheaper
Advertising on Facebook jumped an average 49 percent in the first quarter of the year. According to Facebook’s latest results. With the advent of GDPR, it’s likely that people will share less data with Facebook, which will limit the personal data it shares with advertisers making targeting harder and more expensive.
Whether or not advertisers follow Adidas in spending less on the Facebook platform is yet to be seen. Despite all of Facebook’s problems, the truth is that there aren’t many other places that marketers can go to reach an audience as big or as detailed as Facebook’s. Many see Facebook as having an ROI that is far too strong to abandon, and despite rising costs has become a staple to many media plans.
How do you feel about the state of Facebook Ad ROI?