Can Big Brands Hurt Facebook?
Facebook controls the attention of 2.5 billion people and directs that attention in a way that benefits its own business the most. We as users - along with media contributors - are the suppliers of Facebook. With the law of large numbers on its side, no one supplier can impact the overall product experience. Therefore, Facebook has effectively commoditized its suppliers and holds a dominant position.
Facebook offers this ‘aggregated attention’ as a product to advertisers. Regardless of the size of the advertiser, or the nature of the product to be advertised, Facebook can deliver consumer attention better than ever before. In many ways, Facebook has leveled the playing field for small businesses. The cost to reach a large, targeted audience is lower than ever before, and good storytellers have a cost-efficient avenue to introduce products to the entire world, almost over-night. However, whether you are a global consumer brand or an upstart, make no mistake. Facebook is in charge.
Large consumer brands today are in the news for walking away from Facebook Ads. The two simple reasons are:
1) To disassociate from politically incorrect and insensitive rhetoric, especially in an election year
2) To get back at Facebook for evening the playing field and taking away the scale advantages only big businesses had for decades
If consumers continue to spend a large amount of time on Facebook and its properties (Instagram, Messenger, WhatsApp), history suggests that these bans will be short-lived. The real strength of Facebook lies in its aggregation. It has commoditized both sides – suppliers and advertisers.
Advertising bans will hurt Facebook’s earnings in the short-term but will have little impact on the business model in the long-term. Before long, most of these advertisers will be back, bidding for our attention. Only, you and I can do that, by leaving the platform in droves. As great as that might sound to some, very few will. Social media is the 21st-century version of Tobacco. It is highly addictive. For that reason, Big brands cannot hurt Facebook.
This is what I believe.
What do you believe?