Is Facebook losing lustre among advertisers?

Too early to tell how big the shift is


NEW DELHI: Covid2019 has left a serious impact on ad revenues across platforms. The advertisers have controlled outflowing monies, are investing very cautiously in certain properties and some of them have stopped advertising completely. Despite the incredible growth in time spent on smartphones and other digital platforms, the ad revenues have been low for all mediums.

Facebook, one of the most popular social media platforms across the globe, also reported a dip in ad demands in the first quarter of the year.

While the APAC region remained the only area to show growth in percentage-wise contributions to FB’s ad revenues, it witnessed an 11.13 per cent Q-o-Q decline in Q1 FY20.

Schbang founder-MD Harshil Karia believes that it is not only because of the pandemic that the platform is losing ad money. “Facebook has been losing steam because other platforms like Instagram and TikTok have taken over. Also, YouTube has been a pretty strong medium. Because advertisers now have more avenues (to explore), they are removing some of the expenditure from Facebook. Also, advertisers are not seeing good returns on their video spends on the platform. As a lot of content moves towards video, Facebook is facing a challenge.”

He added that it will be better for the platform in terms of ad revenues once the lockdown is lifted but there are certain fundamental challenges that it will have to address to remain relevant for the advertisers.

WATConsult EVP-media operations (south and west) Sahil Shah also noted that the popularity of Facebook is certainly not at the top for advertisers. “Consumers have moved to more and more platforms, resulting in explorations. But I reckon it’s still early to tell that big monies are shifting from FB to its competition. Facebook is still one of the largest addressable bases with some good targeting and relatively better brand-safe ad options available for advertisers.”

However, #ARM Worldwide CEO and co-founder Manas Gulati thinks otherwise. “I think it is a mandatory glitch across platforms as we are seeing most of the advertisers playing it safe, so that they open with the additional reserve when the market opens. We have seen an overall drop in the digital marketing spends especially on the categories which have been directly impacted. Close to a good 45-60 per cent drop in ad spends has been noticed across categories.”

He added that Facebook remains a central part of the advertising mix for his firm as it delivers great results in driving awareness as well as business results. “Content consumption on Facebook has increased drastically especially during these times. I think the change they have brought about in the recent upgrades of their user interface is amazing. Facebook has always been a great source of profile targeting with great technology. It has been great when it comes to results coming out of the overall umbrella of Instagram, WhatsApp and Facebook itself. Its approach as a product company was always to demographic profile audience so that the leakage of ad spends is kept to the minimum to drive optimum business results.”

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