Expert Editorial: Does Meta Matter Anymore? What to Make of the Online Advertising Crash

by Lindsey Francy Feb 6, 2023 News
Expert Editorial: Does Meta Matter Anymore? What to Make of the Online Advertising Crash

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Let’s fact-check some of the claims being thrown around

for the current social media advertising crisis.

Susan DeMatei is a writer.

One question frequently popping up is the viability of Meta, the company that owns Facebook, What's App and Messenger, as an advertising platform.

The tech sector has not been well received by the public. Seven years of gains were erased last year. CNBC called Meta a "loser" or a "death spiral" in their headline. There is news of another large marketer pulling out of the platform on a daily basis. Meta's meltdown is not the only one that shocks. Last year, Amazon and Snap went down 80% and 40%, respectively. Even the boldest marketer is wondering how much budget to attach to social media in a few years.

The wine business needs to understand the causes of market shifts and apply them to it.

It's time to just the facts.

Let's fact-check some of the claims being thrown around for the current social media advertising crisis.

The economy is to blame.

There was a chorus of "it's not our fault" when the companies missed revenue goals. The uncertain and volatile macroeconomic landscape was blamed by Meta. Inflation and joblessness are up, consumer confidence is down, and supply channel issues aren't helping

There are fewer advertising dollars for the people who make the stuff when people buy less stuff.

Is it true that we're buying less? It is possible that the news sensationalizes the truth. It doesn't look like we're buying less. The U.S. GDP grew in the third and fourth quarters of the year. We aren't falling apart, at least not enough to cause the apocalyptic tumble we've seen this year.

How do you explain to people that Apple beat its projections in a market that is terrible?

We don't buy the economic argument.

The advertisers are to blame.

Advertisers aren't advertising. If Frito-Lay and Budweiser pull advertising, shouldn't we also?

There are two types of advertisements: ads for awareness and ads for response. These ads are targeted differently if we generalize. Awareness ads should be for people who don't know your brand yet, and response ads should be for people who already know your brand. You spend more and spend more frequently to get the word out. The marketing funnel is based on this idea.

Highly visual platforms that give you content based on what you do on them are better at advertising. As they have the most advanced tracking of consumer behavior, Facebook andInstagram have excelled at response ads. Both do well but at a higher price.

More prominent clients and budgets are shifting their budgets to platforms that provide more coverage than Meta. We have seen quotes from large advertisers that they are moving up to 10% to 15% of their Meta budget from Meta to TikTok. For reaching a broad range of people, TikTok is the best medium to use.

Awareness advertising used to require a lot of TV shoots and a lot of money to navigate the network's ratings. Nowadays, anyone can make a video with a cell phone, and there is a proliferation of streaming cable services that can be targeted down to your living room. Ryan Reynolds, thanks for your kind words. It should be left to a Canadian.

Response ads are a small part of your budget. If you get cold feet, they are the easiest and fastest line items to cut.

Advertising is still going strong. It's changed.

Apple is to blame.

There has been a lot of discussion about Apple's new requirements for its mobile operating system. Meta had to ask users for permission to track their data. The requirement was supposed to be a knockout punch to the platforms that cater to response driven advertisers. There was no data or targeting. No advertising, no targeting. Meta is down 36% this year due to the Apple requirement.

Nope, that's right. The end of the world has not arrived. Only a small percentage of users choose to block their data after a year of the newiOS. Meta ads cost you more to reach your target audience, but that is a long way from being a waste of money.

This isn't the reason for ad revenue to fall. It has its own data, and it is down 40% this year. If data tracking was the problem, you would expect them to be cruising along.

Meta is to blame.

People are jumping The company isn't doing well.

It isn't so fast. Today, the daily active users of Meta are 1.93 billion, which is more than the analysts expected. It is the first down quarter in the company's history.

This is not a strong argument. Despite a drop in net income in the third quarter, Meta ended the period with more than 40 billion in cash and securities. The number of users is expected to increase by 3% annually through the years.

There is no suggestion that Facebook is going out of business.

They have been the darling of the press for a long time. Even though they missed their earnings, they still saw their digital ad revenue grow. The stock decline was an "over-reaction" and the company is still listed as a "BUY" by the company's critics.

We don't know what is happening.

Awareness ad dollars are shifting. There has been a shift in advertising dollars, where Meta and Google are no longer the main players in the awareness area.

Meta doesn't pay much attention to advertisers. All of the company's eggs are in the Metaverse basket, with the goal of having one billion users by the end of the year. There isn't much support for companies that can't use a development firm on how to get involved It is clear that the two social media sites are not currently for advertisers. There are other agendas at work.

The new generation is not being wooed. Short-form video continues to take a larger proportion of time spent. Primarily driving and benefiting from this trend has been TikTok, with some concern that this was creating a competition for Meta.

Facebook has been a follower and not a leader in this area. More users go to Reels which is a lower profit for the company. According to internal documents, teen users on Facebook have declined by 19% since the beginning of the year.

The decline in Gen Z users is projected to happen at a later date. The number of Gen Z users will go from 5.3 million this year to 5.2 million in 25 years.

They are going somewhere. There is a song called TikTok. This year, TikTok will gain more Gen Z users than any other social media platform.

What do you think about that for the wine market?

There are a number of reasons why advertising buys such as Facebook andInstagram are still a good idea.

  1. Meta and Google are still the best platforms available to target response-driven ads — in particular, lead generation (join our list), events (buy tickets) and sales in combination with engaging, brand-supportive non-sales content. Remember, the big advertisers leaving with the big awareness dollars are still doing response ads on Meta. It may cost you a little more or be less efficient, but it’s still the best place to be.
  2. Meta is the least costly channel to reach a target (outside of emailing or texting.) Any other advertising channel, digital or otherwise, will cost more.
  3. Meta and Google are immediately responsive, which allows for testing and refinement. Unlike some awareness channels, you can continually tweak your target, image or copy on a Google or Meta ad. 
  4. Video is more time-consuming to produce than a Meta ad, and the consumption rate of videos is manic. TikTok recommends advertisers post one to four times per day! If you’re Coca-Cola and have a TikTok team, that’s great, but not many wineries can afford that volume and frequency of content production.
  5. Advertising alcohol on TikTok is prohibited. So, there’s that.
  6. Last time we checked, we aren’t targeting teenagers – or at least we hope not. So when you hear of large groups leaving Meta, know it’s mostly Generation Z in search of dance moves, make-up tutorials or pet antics on other platforms.

Consider Meta having a bad hair day as well. Don't give up with it. Both of them are still strong spots for your ad dollars.


Susan DeMatei, WineGlass Marketing
Susan DeMatei, WineGlass Marketing

Susan Dematei is a person.

Wine Glass Marketing is a full-service direct marketing firm that works within the wine industry. Wineglass Marketing has been in business for 10 years and offers assistance with strategy and execution.


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