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November 20, 2018

How Badly Has Facebook Effed Up? (Thinks Out Loud Episode 234)

November 20, 2018 | By | No Comments

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How badly has Facebook effed up? Marketers afraid for their customers

How Badly Has Facebook Effed Up? (Thinks Out Loud Episode 234) – Headlines and Show Notes

Faced with a slew of negative coverage, it’s fair to ask, how badly has Facebook effed up? And, more importantly, how badly will that eff up your business? The latest episode of Thinks Out Loud takes a look. Show notes as follows:

Subscribe to Thinks Out Loud

Contact information for the podcast: podcast@timpeter.com

Past Insights from Tim Peter Thinks

You might also want to check out these slides I had the pleasure of presenting recently about the key trends shaping marketing in the next year. Here are the slides for your reference:

Technical Details for Thinks Out Loud

Recorded using a Heil Sound PR 30 Large Diaphragm Multipurpose Dynamic Microphone through a Cloud Microphones CL-1 Cloudlifter Mic Activator and a Mackie Onyx Blackjack USB recording interface into Logic Express 9 for the Mac.

Running time: 15m 1s

You can subscribe to Thinks Out Loud in iTunes [iTunes link], the Google Play Store, via our dedicated podcast RSS feed )(or sign up for our free newsletter). You can also download/listen to the podcast here on Thinks using the player at the top of this page.

Tim Peter

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March 30, 2018

6 Quick Content Marketing And AI Insights: E-commerce Link Digest

March 30, 2018 | By | No Comments

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6 Quick Content Marketing And AI Insights: E-commerce Link Digest

Howdy, Big Thinkers! No setup today. Just a list of 6 quick content marketing and AI insights to carry you through to next week. Enjoy:

  1. Mark Schaefer asks ”is social media marketing still a thing?” And provides a great answer to the question, too.
  2. CMO.com offers up a walk into the future of content with The Mill’s Boo Wong that’s well worth your time.
  3. Our own Tim Peter interviewed Mike Moran on the future of content marketing, search, and digital.
  4. We also rounded up a great set of 8 exceptional insights into voice and AI and their effects on digital marketing for the E-commerce Link Digest series.
  5. Speaking of AI, the Forbes Technology Council says to decide if your company is ready for AI, ask yourself these nine questions
  6. You also will want to check out these 6 proven digital marketing trends (the best of Thinks Out Loud and this great post that asks, how can you succeed at digital marketing next year? 17 great posts offer answers

Have a fantastic weekend, Big Thinkers. Catch you back here next week!

If you’re looking to learn even more about how changing customer behavior will shape your marketing going forward, be sure an register to receive a special report I’ve produced in conjunction with hotel marketing firm Vizergy, “Digital Hotel Marketing in a Multiscreen World.” While it’s targeted specifically at hotel and resort marketers, the lessons apply to just about any business. You can get your free copy of the report here.

You might also want to check out these slides I had the pleasure of presenting recently about the key trends shaping marketing in the next year. Here are the slides for your reference:

Finally, you might enjoy some of these past posts from Thinks to help you build your e-commerce strategy and your digital success:

Tim Peter

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March 28, 2018

How Will Facebook’s Data Scandal Impact Hotel Marketers?

March 28, 2018 | By | No Comments

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What Facebook's Data Scandal Means for Hotel Marketers

I’ve long been an advocate of the hotel marketers using social media to benefit their properties. In a post that asked, “Is Social a Waste of Time for Hotel Marketers?” I wrote:

“…booking provider eviivo… offers independent hotels and B&B’s pretty terrible advice. Their claim? Quoting Travolution here, “social media has negligible impact on hotel bookings.” And someone’s done the research, so it must be true, right?

Wrong. Dead wrong in fact…

Social media marketing is not a waste of time for hotel marketers when you do it correctly. Neither are OTA’s. Or search. Or email. Or… well, you get the point. They each play a role to help your guest choose your property when they’re ready to book. When you choose your channels appropriately and manage your resources effectively you’ll find that you rarely waste time. And that your business performs well, too.

I doubled down on that sentiment when making the case for social as your hotel’s “secret sales force,” noting the powerful role that social plays when guests tell a positive story about your brand to their friends, family, fans, and followers on social. As that column noted,

According to Nielsen, most people trust the recommendations they receive from their friends and family on social. And on average each of your guests connects with roughly 200 friends and family on Facebook and other social media. Your existing guests offer you a trusted connection with these potential customers.

Just consider the math for a moment. Let’s say you’re responsible for a 100 room hotel, that runs at 60% occupancy and hosts 1.4 guests per room each night. That’s almost 31,000 guests per year that you can put to work telling your brand story. Which, y’know, is a lot of people. And, even using conservative numbers about how many friends each has on social media, those 31,000 guests can reach millions of other potential guests on your behalf …”

Of course, all that was before Facebook’s disastrous week. Two separate scandals in the last week — so far — about the consumer data that the social media giant captured, used, and shared with marketing partners have suddenly led to campaigns encouraging users to #DeleteFacebook.

Folks like Elon Musk took this message to heart, deleting his company’s Facebook pages between the announcement of the first and second Facebook scandals. And that’s in addition to the 2.8 million young users who beat #DeleteFacebook to the punch by abandoning the platform last year.

So, what does this mean for hotel marketers? Should you #DeleteFacebook too?

Will Facebook’s problems change how hotels use social media?

As much fun as it might be to join the chorus calling for Facebook’s demise, the question isn’t “Will Facebook’s problems change how hotels use social media?” The bigger, more important question is, “Will Facebook’s problems change how guests use social media?”

If the answer to that is “yes,” then the decision of what you should do as a marketer is straightforward.

Except for exceedingly rare cases, you probably didn’t start using Facebook while it was restricted to college campuses — not just because because you couldn’t, but because there was no good reason why you would. Your customers simply weren’t there then.

And, as ever, you must watch where your customers go on this one, too. Now, that doesn’t mean you can’t take a principled stand. If you genuinely believe Facebook hurts society — that they’re the only bad actor here — then I certainly won’t criticize you for following your conscience and deleting your hotel’s Facebook presence.

I suspect the reality is a trifle more complicated though. Yes, Facebook definitely used consumer data in ways that customers didn’t understand, sometimes because Facebook made it difficult to understand — and sometimes because they made it difficult to choose a better option to protect your data if you did understand it. That’s… not good. They should be held to account for these actions and offer — ideally on their own, but by regulatory oversight if necessary — better controls and protections for consumers.

They’ve also executed — and, frankly, continue to execute — one of the worst public relations responses to a crisis of this magnitude I’ve seen in a while. For a company that facilitates communication, they’re remarkably bad at communicating. They keep trying to frame the problem as one where a few bad guys broke the rules instead of acknowledging the fundamental breach of trust between the company and its customers. Plenty of lessons there worth learning.

It’s also true that Facebook is hardly the only guilty party here. Their practice of collecting call data on Android phones worked because Android’s parent Google allowed it to work. Do we know who else captured similar data and for what purposes? Has Google acknowledged how many consumers have had their data exposed? Or what happened to all the data after Google changed its policy? I’m not aware of any public answers to those questions. And yet I haven’t run across a #DeleteGoogle campaign so far. And, if I had, would you be willing to dump the search giant from your hotel marketing plan? Could you if you wanted to?

Worse, these scandals are likely far from over. I’d expect at least a few more shoes to drop before we find our way to a “new normal” — at this point I’ll be more surprised if another scandal doesn’t emerge.

So, what should you do in the meantime?

How should hotel marketers respond to Facebook’s troubles?

Best practices suggest taking a measured response that minimizes risk to you, and more importantly your guests, while not giving up on what’s working today. Review the following points as you plan your response to the situation:

  • Avoid collecting any data on Facebook that you’re not already gathering. It’s possible this drags on for months or years, complete with congressional committees subjecting Mark Zuckerberg, Sheryl Sandburg, and other Facebook functionaries to public confessions and the floggings that follow. It’s also entirely possible this blows over in a couple months as some new, more juicy scandal attracts media and mainstream attention. I mean, it’s not like there’s some crazy story coming out every day that distracts people from the crazy story that happened the day before. But when you find yourself in a hole, the first thing you do is stop digging. Facebook is in a hole; there’s no need to grab a shovel and jump in with them. More plainly, don’t give their critics a reason to come looking for you too. We’ll have a much better sense of where things stand soon. This is a time for patience.
  • Don’t automatically stop what you’re doing today. All that said, unless you have reason to believe you’re doing something customers will hate, you’re likely fine with keeping your current activities in place. Again, this is a time for patience.
  • Keep an eye on your Facebook presence’s performance. Let’s assume the #DeleteFacebook campaign steamrolls towards success and consumers start abandoning the social network en masse. Should you immediately cut your losses and jump ship too? Probably… not. It doesn’t matter how many users Facebook has. It matters who those users are. If your guests continue to use Facebook, you probably need to continue to engage with them there. By the same token, keep a close eye on what’s happening with the reach and engagement your hotel’s posts receive. Look for signs that show how your customers are reacting — or not — to Facebook’s struggles. And, just like you should do with any channel, react accordingly to the reality, not the rumor.
  • While you’re at it, examine your own data practices. Facebook’s day of reckoning offers a warning to all marketers about the dangers of data collection. Consumers clearly care more about the risks in “free” services like Facebook than they did just a few weeks ago. Yes, this could blow over. But the more likely outcome is that they approach all marketers with a greater degree of skepticism about what data gets collected, by whom, and how it gets used. So be upfront with your customers about the data you collect and how you use it. The coming GDPR regulations require this, by the way, so you may as well get on board before regulators everywhere require it. Conduct a serious data audit and ask yourself whether you even need all the data you collect. Ultimately, you want to demonstrate to your guests you’re a trusted partner looking out for their best interests, ideally by being a trusted partner looking out for their best interests.

Conclusion

Clearly, Facebook is taking its lumps right now, both for its actions and for its woeful response to the situation. But despite the best efforts of the #DeleteFacebook campaign, nothing suggests that guests are abandoning the platform in large numbers. That could change at any time.

Your best bet is to ensure you’re doing right by your customers and their data. Ensure you’re acting in an ethical manner and, as is often the case for hoteliers, acting in the best interests of your guests. Make it easy for customers to understand the data you use and what you use it for. Keep track of how your customers are responding to the Facebook scandal to see if the social platform continues to provide value for your hotels — or if it’s time to find a better option.

And, as ever, continue to dig past the headlines of these stories. We’re undoubtedly going to see more of these issues in the weeks and months ahead. Knowing how to respond today is useful; knowing how to respond in the future is vital.

Social media likely will continue in a key role for hotel marketers, Facebook’s missteps notwithstanding. The key for you is how continue you make it work as you — and your customers — move into a new normal. Because failing to listen to customer concerns and respond to those appropriately — regardless of whether Facebook is involved or not — would be the real scandal.

If you’re looking to learn even more about how changing customer behavior will shape your marketing going forward, be sure an register to receive a special report I’ve produced in conjunction with hotel marketing firm Vizergy, “Digital Hotel Marketing in a Multiscreen World.” While it’s targeted specifically at hotel and resort marketers, the lessons apply to just about any business. You can get your free copy of the report here.

You might also want to check out these slides I had the pleasure of presenting recently about the key trends shaping marketing in the next year. Here are the slides for your reference:

Finally, you might enjoy some of these past posts from Thinks to help you build your e-commerce strategy and your digital success:

Tim Peter

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September 20, 2017

Maybe Facebook’s Data Problem Is Your Data Problem (Thinks Out Loud Episode 203)

September 20, 2017 | By | No Comments

Looking to drive results for your business? Click here to learn more.


Maybe Facebook's Data Problem Is Your Data Problem (Thinks Out Loud Episode 203)

Maybe Facebook’s Data Problem Is Your Data Problem (Thinks Out Loud Episode 203) – Headlines and Show Notes

Subscribe to Thinks Out Loud

Contact information for the podcast: podcast@timpeter.com

Past Insights from Tim Peter Thinks

You might also want to check out these slides I had the pleasure of presenting recently about the key trends shaping marketing in the next year. Here are the slides for your reference:

Technical Details for Thinks Out Loud

Recorded using a Heil Sound PR 30 Large Diaphragm Multipurpose Dynamic Microphone through a Cloud Microphones CL-1 Cloudlifter Mic Activator and a Mackie Onyx Blackjack USB recording interface into Logic Express 9 for the Mac.

Running time: 12m 11s

You can subscribe to Thinks Out Loud in iTunes [iTunes link], the Google Play Store, via our dedicated podcast RSS feed )(or sign up for our free newsletter). You can also download/listen to the podcast here on Thinks using the player at the top of this page.

Maybe Facebook's Data Problem Is Your Data Problem

Maybe Facebook's Data Problem Is Your Data Problem: Introduction

Well hello again everyone and welcome back to Thinks Out Loud, your source for all the digital marketing expertise your business needs. My name is Tim Peter, today is Wednesday, September 20, 2017 and this is episode 203 of the big show. Thank you again for tuning in, I really do appreciate it and I think we’ve got a terrific show for you this week.

Maybe Facebook's Data Problem Is Your Data Problem: Situation Analysis

So, a couple week’s ago, I made a reasoned, rational argument for why Facebook’s data problem is their problem, not yours. I set up my thesis, I built some supporting arguments, and I think, I nailed it. Brilliantly. Well done me, right?

Well, wait for it.

Because later that same day, the day I posted that episode, news broke that alleges Facebook sold ads to Russians looking to influence the US presidential election.

Um… whoops.

That same day, ProPublica proved that you could target Facebook ads specifically to anti-Semites using some horrific language on the site.

Um… Bigger whoops.

And, then, to add insult to injury, two days later, the Equifax news hit.

Which is just like “whoops” times infinity.

Now, I’ve mentioned a few times that data represents the crown jewels for your business. Right? Content is king, customer experience is queen, and data is the crown jewels. And if you’re somebody like Facebook or Equifax (or for that matter, Google, Amazon, Microsoft, and Apple), that’s putting it mildly. These folks live for data. These are massive companies, with massive influence in our lives, who choose the news we read, the ads we see, our ability to get credit and buy things and a whole host of other behaviors we engage in and rely upon every single day. That’s not just the crown jewels. That’s the whole bloody treasury, palace, and kingdom.

And while I’m leery of excessive regulation, a number of influential thinkers all across the political spectrum have begun to ask, rightly, whether these folks have too much power in our lives — and more importantly, whether they’ve demonstrated the ability to wield that power wisely.

The biggest threat facing Facebook and Google and Equifax and all the rest right now isn’t from their traditional competitors. And it’s not from a stereotypical couple of brilliant kids in a garage. Their problem, their biggest threat, is much bigger than that.

Because the real threat that Facebook and Google face is from consumers turning on them, losing faith in their ability to keep our data safe, and driving regulators to, well, regulate. Equifax underscores these dangers. Big. Time. And if customers begin to see the tech giants in a similar light, watch out.

According to TechCrunch, Facebook had to give testimony to special investigator Robert Mueller. The Atlantic Magazine published a series of articles detailing how and why Facebook should be regulated. Pierre Omidyar, who founded eBay and is nobody’s idea of a luddite, has been ranting on Twitter for the last several weeks about why Facebook should be regulated.

And it’s not just Facebook. Google faces increasing scrutiny in Europe for alleged anticompetitive practices. The New York Times in an article this past April asked, “Is It Time to Break Up Google?” Fortune Magazine suggested in July that Google and Facebook may need antitrust regulation.

And don’t get me started on Equifax. In this specific case, I agree they deserve almost anything that’s coming to them. But I don’t take pleasure in any of this. Nor should you.

Yes, there are editorials online, in newspapers, and in magazines. Yes, there will be hearings in Congress. And, yes, there will be consequences, at least in terms of additional regulation. The industry has done a terrible job taking care of the crown jewels. Others are getting set to step in to say how it should be done.

But that’s why you can’t take pleasure in this. Because at that point Facebook’s data problem might be your problem. Because those regulations might fall squarely on your shoulders too. Talk to anyone who’s beginning to deal with regulations such as the General Data Protection Regulation in Europe (better known as GDPR) and they’ll tell you what I’m talking about. It’s an onerous, complex process. And that’s before any of this happened.

This is a big, honkin’ deal, one you’ll likely have to deal with too.

Now, let’s be fair, this is larger than a marketing problem. But that doesn’t mean marketing shouldn’t care about it. We collect an extraordinary amount of data about our customers. And I have and will argue in the future that we should. But only if we’re:

  1. Clear in our intentions for data use and retention.
  2. Upfront with our customers about how we’re going to use that data.
  3. Prepared to let them opt-out if they don’t want us to use that data that way, and
  4. Ready to protect that data from the thieves and hackers, amateur and professional, who are looking to get their hands on that same data, whether for profit or for the lulz.

If you can’t say, “Yes, I’m ready” to each of those four items, it’s probably worth asking yourself whether you ought to be collecting that data in the first place. In the immortal words of Ian Malcolm in the movie Jurassic Park, “Your scientists were so preoccupied with whether or not they could that they didn't stop to think if they should.” Don’t be that guy.

Maybe Facebook's Data Problem Is Your Data Problem: Antitrust

Now, before you say, “This couldn’t really happen, though,” remember that it already has. There was no antitrust regulation in the US until the late 19th century. But once Senator Sherman declared "If we will not endure a king as a political power we should not endure a king over the production, transportation, and sale of any of the necessaries of life,” we ended up with the Sherman Act of 1890.

And just as Sherman thought it was a bad ides to have a king over “the production, transportation, and sale of any of the necessaries of life,” some other enterprising politician could easily declare, “If our personal and private data about our lives and intentions truly represents the crown jewels, how can we entrust those jewels to any party unwilling to defend those jewels as if the very kingdom depends upon them?”

OK, so I’m not the orator John Sherman was. But you get the point.

Maybe Facebook's Data Problem Is Your Data Problem Summary

Equifax has shown just how dangerous it is to leave the crown jewels in the wrong hands. Facebook and Google have shown exactly how much the data they possess affects our day-to-day lives. And regulators have shown their willingness to act, at least when the public demands it.

You need to get ahead of the situation. You need to work with your IT team and your vendors to ensure that, just like I said before, you’re:

  1. Clear in your intentions for data use and retention. Why are you gathering that data? For what purpose?
  2. You need to be upfront with your customers about how we’re going to use that data. How’s it going to be stored? What’s it going to be used for? And ensure that they’re safe and secure
  3. Prepared to let your customers opt-out if they choose, and
  4. That you’re ready to protect that data from the folks who want to get their hands on those crown jewels for their own purposes.

Because, it’s a pretty safe bet that before too long, Facebook’s data problem — and Google’s data problem and Equifax’s data problem — are gonna turn out to be your data problem too.

Conclusion

Now looking at the clock on the wall we are out of time for this week. I do want to remind you that you can find the show notes for today's episode as well as an archive of all episodes by going to Tim Peter.com/podcast. Again that's Tim Peter.com/podcast. Just look for episode 203. And while you're there you can click on the subscribe link in any of the episodes you find so you get us delivered to your favorite podcatcher every single week. You can also subscribe in iTunes or the Google Play Music store or Stitcher Radio or whatever your favorite podcatcher happens to be. Just do a search for Tim Peter Thinks, Tim Peter Thinks Out Loud, or plain old Thinks Out Loud, we should show up for any of those. And if you'd be willing to provide a rating on iTunes, the Google Play Store, or Stitcher Radio while you're there, I would really appreciate it. You can also contact me by going to Facebook.com/TimPeterAssociates, on Twitter using the Twitter handle @tcpeter, or via email by emailing podcast@TimPeter.com again that's podcast@TimPeter.com. With that I want to say thanks again for tuning in, I really do appreciate it. I hope you have a fantastic weekend, a great week ahead, and I will look forward to talking with you back here on Thinks Out Loud again next week. Until then take care everybody.

Tim Peter

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September 6, 2017

Facebook’s Data Problem (Thinks Out Loud Episode 202)

September 6, 2017 | By | No Comments

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Facebook's Data Problem: Screenshot of Facebook.com

Facebook’s Data Problem (Thinks Out Loud Episode 202) – Headlines and Show Notes

Subscribe to Thinks Out Loud

Contact information for the podcast: podcast@timpeter.com

Past Insights from Tim Peter Thinks

You might also want to check out these slides I had the pleasure of presenting recently about the key trends shaping marketing in the next year. Here are the slides for your reference:

Technical Details for Thinks Out Loud

Recorded using a Heil Sound PR 30 Large Diaphragm Multipurpose Dynamic Microphone through a Cloud Microphones CL-1 Cloudlifter Mic Activator and a Mackie Onyx Blackjack USB recording interface into Logic Express 9 for the Mac.

Running time: 15m 32s

You can subscribe to Thinks Out Loud in iTunes [iTunes link], the Google Play Store, via our dedicated podcast RSS feed )(or sign up for our free newsletter). You can also download/listen to the podcast here on Thinks using the player at the top of this page.

Facebook’s Data Problem – Thinks Out Loud Episode 202 (September 6, 2017) Transcript

Introduction

Well hello again everyone and welcome back to Thinks Out Loud, your source for all the digital marketing expertise your business needs. My name is Tim Peter, today is Wednesday, September 6, 2017 and this is episode 202 of the big show. Thank you once again for tuning in, I really do appreciate it. I’ve got a terrific show for you this week.

Now I have to do something a little unusual today and that is provide a disclosure: I’m going to be talking a lot about Facebook and I think it’s important to note that I own a small number of shares of Facebook, that represent about 0.7 percent of my portfolio. I don’t think that introduces any bias into the conversation, but, obviously, you should know that and judge accordingly. Also, of course, I think it’s really important to note that I’m about to look at the company from the point of view of marketing professionals, so please don’t take any of this as investment advice. This is all about what you do as a marketer, not as an investor.

Now with all that out of the way, it's really interesting what's happening with Facebook these days. They really represent a study in contrasts for marketers and customers alike and a lot of that contrast really has to do with their data problems. And they have a number of them.

Facebook’s Data Problem: Miscounting Subscribers

According to Fortune and Pivotal Research Group:

…Pivotal Research Group senior analyst Brian Wieser pointed out a large discrepancy between U.S. census data and the potential reach that the social network promises advertisers.

I’m still quoting the Fortune article here:

On Tuesday, Wieser issued a note pointing out that Facebook's Adverts Manager tool promises a potential reach of 41 million 18-24 year-olds in the U.S., while recent census data said there only 31 million people living in the U.S. within that age range.

For 25-34 year-olds, Facebook claims a potential reach of 60 million, versus the 45 million people counted in the census last year.

So to recap that, Facebook claims it’s reaching somewhere between 25 and 35% more 18 to 34-year-olds then the U.S. Census shows exist. That’s not great.

Now, there could be multiple causes for this:

  1. Some people have more than one account. Whether for legitimate reasons or less legitimate reasons (more on that in a moment), it’s entirely possible people have more than one account on Facebook and so the social network is double counting those people
  2. Older people (and, who are we kidding, it’s probably creepy old guys mostly) with only one account might be lying about their age for any number of reasons that I'm not getting into, right, or, most likely…
  3. Some combination of the first two

Still, that is an issue.

Additionally, a year ago, Facebook had to apologize for “artificially inflating” the number of video views on the site. Those are big deals, right? Those are really big deals. But they’re tough to reconcile with the fact that we also think that Facebook knows everything.

Facebook’s Data Problem: They Know Everything

At the same time, Facebook — with the possible exception of Google — has data about that’s second to none. Kashmir Hill wrote a piece on Gizmodo called “Facebook Figured Out My Family Secrets, And It Won’t Tell Me How.” It’s a crazy story, and I have to quote it at some length for you to get a sense of exactly how crazy. So, here’s the quote:

“And then there was Rebecca Porter. She showed up on the list after about a month: an older woman, living in Ohio, with whom I had no Facebook friends in common. I did not recognize her, but her last name was familiar. My biological grandfather is a man I’ve never met, with the last name Porter, who abandoned my father when he was a baby. My father was adopted by a man whose last name was Hill, and he didn’t find out about his biological father until adulthood.

The Porter family lived in Ohio. Growing up half a country away, in Florida, I’d known these blood relatives were out there, but there was no reason to think I would ever meet them.

I’m going to fast-forward through this…

I sent the woman a Facebook message explaining the situation and asking if she was related to my biological grandfather.

“Yes,” she wrote back.

Rebecca Porter, we discovered, is my great aunt, by marriage. She is married to my biological grandfather’s brother; she met him 35 years ago, the year after I was born.

Facebook knew my family tree better than I did.

Now that’s crazy. It's connecting people who, apart from this biological relationship several generations back, have nothing in common in the real world, and knew that these two people should know one another. I had a similar thing happen when Facebook recommended I add as a friend a contractor who’s done some regular work on my house, who I found online about 10 years ago, and have no connection to in any other way. Again, crazy how much they know about us.

Facebook’s Data Problem: Analysis

So, which is it? Is Facebook the panopticon, all-seeing, all-knowing, trapping us in its omniscient vision? Or is it a flawed system that defrauds advertisers and fleeces us using fake data?

The easy answer, of course, is “why not both?” But that’s not really fair to Facebook. And it’s not accurate.

I don’t think Facebook willfully lies to people. I strongly suspect, like many companies, they may view data through whatever prism is most aligned with their incentives. They clearly need to attract advertising dollars to drive their continued growth and where they have the greatest opportunities and incentives, they’re re going to position those numbers in whatever way makes those numbers most attractive to advertisers. Which might sound like they're lying, but I think it's more looking at the world through rose-colored glasses. They may not be saying things that are hundred percent accurate but I do think it is something that they’re incented to see most positively.

I also strongly suspect that they’re going to struggle to find those ad dollars in the future without seriously changing their product. Now they're doing some of this will already, which talk about in a moment, but I mentioned a few weeks ago that P&G cut $140 million from its digital advertising spend due to “brand safety concerns and ineffective ads.” P&G is the biggest advertiser in the world, spending $2.4 billion last year according to Advertising Week. Now, when Facebook cut its spend, the Wall Street Journal reported that “P&G indicated it wouldn’t pull back on overall Facebook spending.”

But, let’s be fair, they haven’t indicated whether they’re increasing that spend either. And this is where we get to the crux of the issue and how I would look at it if I were you.

Facebook’s Data Problem – Reach vs. Targeting

P&G has a very specific need: They want reach. That’s why TV advertising still works brilliantly for the company; they can put their message in front of more people on TV than just about anywhere else. And that’s why Facebook is itself getting heavily into the video space to compete not only with YouTube, but with traditional television as well. Its Facebook Watch offering is only the latest step in that direction.

But Facebook’s greatest strength right now — despite its 2 billion monthly active users — is not reach. It’s the ability to target those users individually. Even the “bogus” numbers of “how many 18-34 year olds are there on the site” aren’t terribly important in that context. Now don’t get me wrong; I’m not saying it’s great that Facebook’s numbers are off. It’s just not as big a deal as the Fortune article would have you believe… unless you’re trying for the broadest possible reach.

If you’re looking to connect with a tightly-targeted audience, especially at the top of the funnel, nothing compares with Facebook. Facebook knows more about your customers than just about anyone, including, possibly, Google. And marketing on Facebook works brilliantly. According to recent research from CPC Strategy and available on eMarketer,

…over one-quarter of US internet users had made a purchase after clicking on an ad they came across on Facebook. Meanwhile, just 7% of those who didn’t click on an ad completed a purchase as well. The survey also found that those who did click on a Facebook ad were roughly 3.5 more times likely to buy a product than those who didn’t.

Those numbers were dramatically higher for Facebook than other social networks. The same eMarketer article shows that “…just 1% of respondents ages 13 and older said they made a purchase based on a Snapchat ad they saw, and only 4% said they bought anything based on an Instagram ad.” By contrast, 16% of Facebook users bought something based on an ad. Now that's different research in the same article but given that those numbers:

  1. Are self-reported, as opposed to behavioral, and,
  2. Include internet users who are not active social media users

It’s pretty safe to assume Facebook’s influence is much higher. My own research and research from friends of mine like Rob Petersen certainly suggest so.

Facebook’s Data Problem: Summary

So, yes, Facebook has a data problem. It’s likely miscounting people for any number of reasons, most of them likely innocent at least as far as Facebook’s behavior is concerned.

If you’re looking for reach, Facebook’s data problem is your problem too. They need to understand exactly how many unique individuals your advertising will reach. That’s going to be a problem for the company as they look to expand their video offering to compete with YouTube via Facebook Watch.

If on the other hand, you’re looking to connect with a richly targeted audience, don’t worry too much about the numbers Facebook reports. Instead, look at your own numbers. See whether Facebook is driving profitable traffic and conversions through your own channels. If they are, does it really matter whether how many people they’re reaching? In fact, their miscounting might actually make Facebook’s performance look worse than it is by artificially increasing your impressions, and undercounting clickthrough rates.

The point is, don’t believe the hype. I’ve mentioned many times content is King, customer experience is Queen, and data is the crown jewels. This is a perfect example of why you want to use your data to see if Facebook is producing the results you want. It’s not great that Facebook has a data problem. But that doesn’t mean you have to make it be your problem too.

Conclusion

Now looking at the clock on the wall we are out of time for this week. I do want to remind you that you can find the show notes for today's episode as well as an archive of all episodes by going to Tim Peter.com/podcast. Again that's Tim Peter.com/podcast. Just look for episode 202. And while you're there you can click on the subscribe link in any of the episodes you find there so you get us delivered to your favorite podcatcher every single week. You can also subscribe in iTunes or the Google Play Music store or Stitcher Radio or whatever your favorite podcatcher happens to be. Just do a search for Tim Peter Thinks, Tim Peter Thinks Out Loud, or plain old Thinks Out Loud, we should show up for any of those. And if you'd be willing to provide a rating on iTunes, the Google Play Store, or Stitcher Radio while you're there, I would really appreciate it. You can also contact me by going to Facebook.com/TimPeterAssociates, on Twitter using the Twitter handle @tcpeter, or via email by emailing podcast@TimPeter.com again that's podcast@TimPeter.com. With that I want to say thanks again for tuning in, I really do appreciate it. I hope you have a fantastic weekend and I will look forward to talking with you back here on Thinks Out Loud again next week. Until then take care everybody.