Whistleblowers are supposed to come out of defense institutions. They’re supposed to alert the world to abuses of power, expose egregious cover-ups, or reveal atrocities that have been swept under the carpet.
They’re not supposed to come from Silicon Valley hi-tech companies built to help people show pictures of their cats.
But when Frances Haugen sat down with 60 Minutes in October 2021, what she revealed about Facebook was as bad as anything that could come out of a tobacco company or a sugary drinks firm.
“I’ve seen a bunch of social networks and it was substantially worse at Facebook than what I had seen before,” Haugen said. “Facebook, over and over again, has shown it chooses profit over safety.”
Haugen, who had spent two years on the social network’s civic misinformation team removed corporate documents that she alleged showed that Facebook knew that its company, Instagram, was toxic for teenage girls, and that its algorithm generated rage and reduced vaccine take-up. The company barely bothered to stop human traffickers and armed groups around the world from using its platforms, spread religious hate in India, allowed VIPs to post content that it would ban from regular users, and that use of Facebook harmed the sleep, work, parenting or relationships of about 360 million users—about one in eight of its userbase. That’s almost twice the rate at which smokers develop lung cancer.
Facebook, said Hausen, had also made “material misrepresentations and omissions in statements to investors and prospective investors.”
That core allegation, that Facebook knew that it was causing harm but didn’t care, followed earlier accusations that the company had shared access to private user data and spread misinformation. Business Insider recently listed the 16 biggest Facebook scandals over the last decade.
Outside of the arms, tobacco, and fossil fuel industries, it would be hard to find a company that has had more public relations disasters than Facebook.
But unlike an oil firm or a defense company, Facebook depends on its relations with the public. It needs members of the public to visit every day, and ideally several times a day. And it needs small as well as big businesses to continue to pay to advertise on the platform. As Facebook becomes as toxic a brand as British American Tobacco, should companies continue to use it to build followings and generate conversions? And if not, what should they do?
A Bad Image, a Rotten Apple, and an Aging Audience
At a time when brands can be cancelled by association, companies that continue to market on Facebook might be putting themselves at risk. In August this year, brands as big as Ikea, Vodaphone and grocery chain Sainsbury’s faced consumer pressure after advertising on GB News, a new UK news channel with a right-wing slant. Within two days of the channel’s launch, brands started pulling their ads.
Beer brand Grolsch, for example, stated that it “prides itself on core values of inclusion and openness to all people, and we want to be clear that we do not associate ourselves with any platforms or outlets that go against these values. We will do everything we possibly can to ensure that Grolsch does not appear on this channel again.”
If brands that big can move so quickly to distance themselves from a controversial television channel, it might be time for other companies to begin stepping back from a brand as contentious as Facebook. Better to walk away out of choice than appear to have been forced to walk away as a result of consumer pressure.
Some major companies have already shown that they’re prepared to listen to calls to leave the platform. In July 2020, a group of civil rights organizations pressured companies to stop buying ads on Facebook to protest the way the platform handled hate speech and misinformation. More than 1,000 firms stated that they would join the #StopHateForProfit boycott and more, including Procter & Gamble, Samsung, Walmart, and Geico, cut back quietly. Other companies, including Coca Cola, said that they would continue to pressure Facebook, while Ben & Jerry’s said that it would limit spending all the way until the end of the year.
As consumers and activists attempt to push companies off Facebook, other companies are making off-ramping easier. In June this year, Apple doubled down on its efforts to make it harder for advertisers to track user behavior. The move followed an update issued in April that placed a pop-up in apps seeking permission to collect data to track browsing habits across third-party apps and websites. Some analysts believed that it could cut data tracking from as many as two-thirds of iPhone users.
That would have powerful effects on the online advertising markets which depends on cookies and trackers to deliver targeted ads to users. Without knowing where users are located, and which topics currently interest them, advertisers will struggle to put the right ads in the right places. The move has already had an effect. Snap’s Chief Executive Evan Spiegel described the privacy changes as a “frustrating setback” for the company. Game company Zynga said the move had raised the cost of its customer acquisition. Mark Zuckerberg warned that the changes would affect its business in the third quarter.
Even without pressure from activists and consumers then, advertisers on Facebook can look forward to lower returns, higher costs, and reduced ad effectiveness.
The question that advertisers will need to ask themselves is whether those higher costs are worthwhile. For businesses aimed at young consumers, the answer is increasingly likely to be no. According a study by Pew Research, the age group most likely to use Facebook is between 30 and 49. Seventy-seven percent of that demographic use Facebook compared to just 48 percent who use Instagram. As age group declines though, that usage of social media switches. Seventy percent of people aged between 18 and 29 use Facebook but 71 percent use Instagram. Only half of people aged over 65 use Facebook at all.
The generation that grew up with Facebook and that was at college when the platform first spread through universities has stuck with it. But Facebook has been slower to take on new users who are more likely to head towards Instagram and TikTok.
So businesses building an advertising strategy also have to bear in mind that Facebook has a demographic bulge. Its peak audience will pass through the age groups, and it’s already not the best place to look for young customers.
And Yet Facebook is Still Meta
So there are plenty of good reasons for businesses to start winding down their Facebook marketing strategies. Activists don’t like the site and could punish businesses that use it. Tighter privacy rules could cut away many of the platform’s advantages. And Facebook’s failure to attract young audiences make it a less tempting tool for businesses focused on teenagers and youths.
And yet, it’s still too early to ditch Facebook entirely. Facebook’s overall penetration is still second only to YouTube. It reaches 69 percent of all US adults, compared to 40 percent for Instagram and just 21 percent for TikTok. Young people may be less inclined to use the site than older folk but the platform still has no shortage of users.
And while increased privacy will make advertising harder, the loss of tracking is likely to hurt Google more than Facebook. While Google depends on browser and search history to send ads to the right places, advertisers on Facebook can segment their coverage by interests based on likes and follows, and interaction on the platform itself.
Tighter privacy rules might harm Facebook’s ability to sell data to unscrupulous third parties but the company has already gathered enough data to sell to advertisers itself, and it has its own methods of gathering more and maintaining engagement.
And while Facebook’s image might be tarnished, even the #StopHateForProfit campaign had only a limited effect. Many of the companies that reduced their spending in July said that they planned to return, while even the top 100 spenders represent only about 16 percent of Facebook’s revenues. Most advertisers on Facebook are small businesses trying to reach local and clearly defined markets. For those companies, Facebook represents the best way to find and engage with customers. It’s much more effective than trying to use one of the shrinking numbers of local newspapers and easier to target than search traffic.
Those small businesses are also at less risk of reputational damage from using Facebook than large corporations. The only people who will be aware that the company is on Facebook are the people who are on the platform anyway.
Facebook Now, But Not Forever
So where does this leave businesses looking to build their advertising strategies?
Companies targeting young customers, particularly people in their teens and twenties, should already be looking to use different platforms. They should be building their knowledge of TikTok and trying to understand how they can bring across their Instagram story skills to a short video-based app. Companies that have been around long enough to remember Vine should be well-placed.
For everyone else, this is the time to prepare. It’s too early to write off Facebook or walk away from it entirely. The company is worth almost a trillion dollars because it’s managed to attract users, build data profiles of each, and serve them content that keeps them staring at their streams. As long as it can continue to do that, the platform will have something essential to offer advertisers.
But if Facebook can’t attract younger users and if more people turn away from it, then companies will need different ways to turn their marketing budgets into increased revenue. That might mean returning to email marketing now that newsletters are more popular than ever; product placement on image-based sites like Unsplash; or a broader content marketing strategy that bring users to their own platform.
Each business will have different needs, but this is the time to experiment and see what works—while Facebook is still effective and not after it’s faded away.
And if none of those strategies works, there’s always the metaverse.