'There's almost a hedging against advertising': Marketers want more details about how Facebook's move to encryption will impact ads
- Facebook's annual F8 developer conference will kick off this week in San Jose, California, and is likely to focus on the social network's plan to move towards privacy and encryption.
- Marketers said it's unclear how the model will work with Facebook's ad business.
- Facebook is expected to play up WhatsApp and Messenger, but advertisers have concerns about running ads in private messaging apps.
- They're also looking for more details about Instagram and its success with Stories.
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As Facebook explores ephemeral communication over public posts, the question for marketers heading to its F8 conference in San Jose, California, this week is what the move will mean for the billions of dollars that they pour into Facebook.
A month ago, Facebook CEO Mark Zuckerberg wrote a 3,200-word post announcing that he envisions Facebook moving to a model that protects users' privacy.
"There's almost a hedging against advertising as a core business model on what he said about messaging and encryption," said George Manas, president and chief media officer at OMD. "I wouldn't say there's anxiety, but there's curiosity to understand that strategy in context of Facebook's broader advertising and revenue strategy as it stands today."
Facebook may be exploring a privacy-friendly measurement system
With the move into encryption, Facebook has hinted that it may be creating a new advertising measurement system, said two sources.
For years, Facebook has pitched advertisers on a version of attribution called closed loop measurement, which matches ad impressions with real-world data to see if someone took an action someone after seeing an ad.
The renewed emphasis on privacy could change that. If Facebook adopted a privacy-focused model that was regulated by the government, its approach would change to mirror that of telecom companies, with advertisers only having access to certain data, ad executives said.
Advertisers have long asked for companies like Facebook, Google and Amazon to make their data more widely available so advertisers can compare campaign performance across platforms. Facebook has suggested some solutions to advertisers, such as pooling data through Nielsen's Digital Ad Ratings product, but advertisers acknowledged that sharing data would require significant resources and require new security demands.
Advertisers are cautious about ads in messaging apps
As part of the focus on privacy, Facebook is expected to play up Messenger and WhatsApp. It's already said it planned to start allow advertising in WhatsApp this year. Agencies cautioned that the move could put off users.
Brands have created customer service chatbots in the past, but with mixed results. Some marketers have struggled to reach an audience with their chatbots and get them promoted. Manas wondered if the messaging push is part of a revived attempt to get into commerce.
Brand safety and data mishaps also continue to be concerns for Facebook advertisers. Oscar Garza, EVP of global media activation at Essence, said he wanted Facebook to address issues like how misinformation spreads between news feed and groups.
"How is there a better relationship between publishers and Facebook so that we can get the right information in the news feed?" he said. "There's deeper questions about tribalism that need to be solved."
Marketers are bullish on Instagram
Instagram is increasingly turning Instagram Stories into ad formats geared at direct-response marketers. Several sources said they expected Facebook to talk about how it's expanding Stories to Facebook and Messenger.
One area that marketers don't expect to hear about: Facebook's move into long-form video with its IGTV and Watch features. While F8 takes place, Facebook ad execs are meeting with advertisers during New York's Digital Content NewFronts event to talk about its upfront-like offering called Showcase.
IGTV is Instagram's year-old, big bet on long-form video. Instagram doesn't sell ad placements within IGTV but publishers and creators can sell branded content that is distributed through IGTV. Tastemade, for example, have run a sponsored IGTV series for Uber Eats as part of a broader campaign that documents immigrant chefs.
"We've seen significantly more of our publishing clients sell branded content on Instagram, IGTV and Stories," said one digital media executive attending F8.