02 March 2021

Why Facebook is Freaking Out Over Apple

About 7 months ago, I mentioned that a Dutch broadcaster turned off tracking ads, and went with simple contextual ads, and earned more money.

Contextual ads are, for example, you read a story and the ads are based on what you are reading, so if you were looking as sports, you would get ads for beer, and if you were looking at barbecue recipes, you would get ads for beer, and if you were reading a story about a heat wave, you would get ads for beer. 

Tracking ads, on the other hand will look at everything that you have done in the past 18 months, and determine that because you looked at sports, barbecue, and the weather, you get served an add for beer. (all ads lead to beer, but that is another post)

The reason that tracking ads are more popular these days is because they are supposed to get higher response rates..

Certainly, that is what the incumbents, like Facebook and Google want you to think, because if contextual ads work just as well, then pretty much anyone can go into the online ad business, and Google and Facebook can no longer slurp up most of the revenue

This is why Facebook is going nuclear about Apple's new privacy policies, which will require an explicit opt-in for tracking.

It's not because they would lose a whole lot of money with this, they would still sell ads, but because this is a massive A/B test on the internet giant's business model.

If advertisers find that non tracking ads work just as well, or nearly so for less money, they will switch to non-tracking ads.

This is why we have leaked emails in which Mark Zuckerberg states that, "We need to inflict pain," on Apple.

I'm inclined to believe that Mark Zuckerberg already knows that the ad tech he sells is a lie, and the emperor does not wish to reveal his sartorial choices.

All this is a long way around to seeing that we now have another data-point in addition to the Dutch broadcaster NPO, we also have the New Zealand news site Stuff, which has abandoned Facebook to no effect. (They did so because of Facebook's irresponsibility both before and after the Christchurch shootings)

The short version, (video below) is that Stuff cut advertising spending on Facebook with, "No traffic impact at all," and since they stopped posting on Facebook, they have been unable to tease out any impact on traffic.

Video below:


Stephen Montsaroff said...

Don't say A/B Testing, that's jargon. Say a simple controlled experiment.

Post a Comment