Although Facebook has been the center of attention with its latest controversy, so far the social media giant hasn’t taken a financial hit. In fact, Facebook’s advertising continues to grow, and its ad revenue jumped to 62% over last year in the first quarter of 2018.
Despite the controversy surrounding Cambridge Analytica’s personal data breach, which impacted 87 million Facebook users, it has not affected their advertising department’s demand from its clients. According to a recent study by 4C Insights, a marketing analysis firm, ad spending increased by 14.5% the week AFTER the scandal broke the news. This amount was essentially the same as compared to the exact time period in 2017.
Facebook has over five million advertisers, so it would take a serious boycotting of businesses to make an impact on its revenue. Only a handful of companies have publicly decided to end or pause their spending since this scandal began, including Mozilla, Sonos and Pep Boys.
Facebook has become an integral component of marketing strategies for many of its clients. This is due in part to Facebook’s current CPM of $5.12. That figure is extremely cost-efficient compared to other social media companies. And its click-through rates are almost double that of its competitors. In other words, Facebook is proving to its advertisers that it works quite well at reaching their target audience, and has no plans to “throw in the towel” any time soon.
In fact, the origin of the Cambridge Analytica scandal is the reason advertisers were attracted to Facebook in the first place. Clients are able to reach large scale audiences at affordable prices, and micro-target those audiences using the rich availability of data that Facebook has collected. Advertising through Facebook is highly effective, according to research that shows the social media giant has the most efficient cost-per-click in its field.
Given this new revelation, it is becoming increasingly clear that we should all read privacy policies carefully, whether on social media platforms or when visiting websites. We also need to decide what’s more important when it comes to social media – increased privacy or interaction with friends. So far, friends are winning.