Marketing strategy

Meta makes changes to marketing strategy amid scandals

As of the spring, the social media company formerly known as Facebook has been gauging where it advertises and how much it spends to do so, taking arguments from agencies wanting to help it manage its massive marketing budget.

The so-called media review – the first for Meta, the new name of the parent company of Facebook and its sister apps Instagram, WhatsApp and Messenger – ended on Tuesday when it chose the agency Spark Foundry as the new one. global planning and purchasing partner.

Spark Foundry, owned by French advertising giant Publicis, will manage “strategic thought leadership, media innovation, planning and investment, cross-channel approaches, tools, technology and operations,” said Lisa Stratton, spokesperson for Meta, in an email. The global agency, which replaces former social media partners Dentsu and Mindshare, also recently won deals from beauty retailer Clarins and automaker Toyota. The decision does not affect Meta’s creative strategy.

Meta made the switch after a seven-month review, in which it came under intense public scrutiny following damaging revelations about its business practices and the effects of its apps on teens, fueled by the whistleblower Frances Haugen, a former employee.

Even as the social platform grappled with scandals, major advertising companies made arguments for what would be a particularly high-profile customer. Meta spent nearly $ 3.6 billion on marketing and sales in the last quarter, 32% more than a year earlier. Winning the Meta account gave agencies access to the social media giant’s deep pockets and massive influence.

The situation underscores Madison Avenue’s codependency in Meta. Most of the advertising industry is already or hopes to be in business with the company, typically placing ads on its platforms or placing ads for Facebook, Instagram, WhatsApp, and Messenger on other platforms. .

Last month, Meta said it made 97% of its revenue, or $ 28.3 billion, from selling ad space in the last quarter. Advertising Week, a recent industry conference, featured panels by Meta, who also sponsored events for the Association of National Advertisers and the American Association of Advertising Agencies. Meta employees sit on the boards of business groups such as the Interactive Advertising Bureau and the American Advertising Federation.

The advertising industry spawned Facebook and is “the hand behind all of Facebook’s dreadful headlines,” but has remained largely wary of the company, company veteran Bob Hoffman wrote in his report. Ad Contrarian newsletter last month. “While the rest of the world is sickened by Facebook’s activities, the industry that has the deepest connection to it, and has the most to lose, is ours. And yet … crickets.

Bob Liodice, chief executive of the ANA, said in an email that the group takes brand safety concerns seriously, but that its members “are responsible for making their own investment choices to determine the suitability of a specific media platform or medium for building their brand. “

The IAB did not respond to a request for comment. The American Association of Advertising Agencies said it will continue to address issues related to ensuring a safe and transparent ecosystem.

But one company, outdoor clothing and gear seller Patagonia, said it stopped all paid advertising on Meta’s platforms last year due to brand safety concerns.

“Internal Facebook documents released over the past few weeks have made it very clear that they know the irreparable damage their lack of accountability is doing to their three billion users and the corrosive effects this has on the company itself.” Ryan Gellert, chief executive of Patagonia, said in an emailed statement.

Meta, like many other companies, works both with creative agencies, which help design and produce marketing campaigns, and with multimedia agencies, which help determine where ads go. It has relationships with almost all of the modern advertising industry, which is made up primarily of six large holding companies – Dentsu, Havas, IPG, Omnicom, Publicis and WPP – which control a constellation of subsidiary agencies. Meta also works with consulting firms like Accenture, which have bought out agencies in recent years, and a few independent stores.

On the creative side, Droga5, owned by Accenture, helps Meta create corporate messages and create corporate videos scheduled for the Olympics. BBDO, owned by Omnicom, carries out marketing campaigns for WhatsApp and the main Facebook application. Johannes Leonardo, who is partly WPP, took over Ogilvy’s Instagram work this spring. Meta also has an in-house team, known as Creative X, which works on marketing.

Wieden + Kennedy, an independent agency based in Portland, was responsible for the overall Facebook brand and created the company’s 2020 Super Bowl advertisement. But in a large-scale boycott of the social network last year by of advertisers unhappy with the platform’s hate speech policy, Colleen DeCourcy, creative director of Wieden + Kennedy, said the situation “has created a lot of difficult conversations within the agency.”

When asked in Time magazine if she expected Facebook to be a customer in 2021, she replied, “What if I was a gambler? I wouldn’t put too much of my dollars in this space.

A spokeswoman for Wieden + Kennedy said the agency was no longer working with Meta and they split up in the first half of the year.

Since starting to spend seriously on marketing in 2014, Facebook had entrusted its media budget to Dentsu and Mindshare, an agency owned by WPP. He started his media review in April, working with management consulting firm ID Comms, a sort of matchmaker who also oversaw reviews this year for Hershey’s and T-Mobile.

Meta asked participating agencies to agree to restrictive contract terms before allowing them to move on to various budget planning and purchasing exercises, said two people with knowledge of the negotiations who were not authorized to speak publicly. Meta declined to comment on the process.

As Meta’s problems escalated, employees at some agencies protested against having the company as a client, people said.

In July, Mindshare pulled out of the social network’s media review, which ran virtually. Meta pulled Havas, another advertising giant, last month. Publicis’ Spark Foundry won the field against their last rival, Dentsu.

“We have a long legacy of great brands through transformation and we look forward to working with Meta on the next evolution of their business,” said Sarah Kramer, Managing Director of Spark Foundry US, in a statement.

“Meta remains a transformative global partner for Dentsu International,” the company said in a statement. “Our drive to co-build integrated marketing solutions for our many common clients will continue unabated. We look forward to continuing our pioneering partnership in 2022 and beyond. “

Mindshare and Havas did not immediately comment. GroupM, which manages Mindshare, declined to comment.

Meta has also struggled with complaints about abuse of the advertising industry. Ms Haugen, the whistleblower, said the company had misled advertisers about its efforts to strengthen its platform against harmful content and tried to block efforts to extract data from political ads.

The real test of Madison Avenue’s patience with Meta will hinge on the company’s popularity with users, eMarketer analyst Blake Droesch said on a recent podcast from the research firm.

“Users leaving Facebook are the only thing that would cause advertisers to leave Facebook,” he said.