Facebook forming 'client council' to address ad sales slowdown

Arvind Hickman
By Arvind Hickman | 19 April 2017

Facebook Australia is consulting senior media agency and advertising executives about how the platform can improve its appeal to advertisers.

The social media network will develop a 'client council' comprised of media buyers and large advertisers, and has flown in executives from its California headquarters to lead a fact-finding mission, as revealed by The Australian.

AdNews understands letters have been sent out to media agencies and clients by Facebook, and meetings have been pencilled in for this week. Media agency Blue 449 tells AdNews it supports the formation of a client council and hopes that it can “further drive third party verification and transparency in a clouded market”.

The move follows a difficult period where, according to SMI data, ad sales have fallen well below growth targets this year. Last month AdNews reported first digital ad bookings slump in eight years. The data, which is not condoned by everyone, showed media agency bookings drop across digital by 1.7% to $135.3 million, compared to February 2016, led by a 10.3% drop in video platforms ad bookings.

Media agencies and advertisers have begun questioning the value of Facebook advertising after a series of issues in the past six months, including the misreporting of metrics and brand safety concerns around undesirable content being published on the platform, including child pornography and the live streaming of a murder in the US.

This is starting to have a financial impact on Facebook ad sales, according to SMI figures.

In the first quarter of 2017, Facebook media agency bookings grew 12% to $38.6 million compared to a year ago. Facebook's annual revenue growth target is 60%, but most of this comes from direct sales rather than media agency bookings.

“I don't think they've grown as much in 2017 as they would have liked to have grown,” Carat Australia chief investment officer Ashley Earnshaw tells AdNews.

“I think some of the sheen has come off Facebook a bit. There's a healthy scepticism around any platforms that don't have complete third party verification transparency.

“As Facebook has become a major publisher, it's coming under the scrutiny that all publishers come under from agencies on behalf of clients.”

While the market has welcomed Facebook allowing some parts of third party scrutiny, media agencies do not believe the platform has gone far enough.

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