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Face­book’s ad­ver­tis­ing rev­enues ride out the data scan­dal

The Daily Telegraph - Business - - Front Page - By Matthew Field

FACE­BOOK’s data scan­dal has failed to hit the tech gi­ant’s surg­ing ad­ver­tis­ing rev­enue, de­spite the Cam­bridge An­a­lyt­ica scan­dal trig­ger­ing a user re­volt and Mark Zucker­berg’s ap­pear­ance be­fore the US Congress.

Ad­ver­tiser spend­ing on Face­book was up by an av­er­age of 43pc year-onyear over the weeks fol­low­ing the data row, ac­cord­ing to ad­ver­tis­ing an­a­lysts.

Since the rev­e­la­tions, sev­eral ma­jor ad­ver­tis­ing groups have threat­ened to boy­cott Face­book if it doesn’t of­fer bet­ter user pri­vacy con­trols. The de­tails of 87m Face­book users were ob­tained by UK po­lit­i­cal con­sul­tants and used in US elec­tions.

But Face­book saw a boost in ad­ver­tiser spend­ing each week af­ter the scan­dal broke on March 18, ac­cord­ing to me­dia an­a­lysts 4C, which mon­i­tors hun­dreds of mil­lions of dol­lars of ad spend­ing. Spend­ing in­creased by 7pc in the week of the scan­dal and 15pc the week af­ter, com­pared to a six point fall at the same time in 2017.

The an­a­lysts es­ti­mate ad­ver­tis­ers spent 62pc more on Face­book in the first quar­ter of 2018 than in 2017. Ar­ron Gold­man, the mar­ket­ing head of 4C, told The Daily Tele­graph: “Brands are ad­dicted to so­cial me­dia. They may change tac­tics, but they won’t move from it.”

In Fe­bru­ary, con­sumer goods gi­ant Unilever spoke out against ex­trem­ism on Face­book, while web-brows­ing com­pany Mozilla, which man­ages the Fire­fox browser, boy­cotted the site over its han­dling of the Cam­bridge An­a­lyt­ica scan­dal.

Face­book is set to re­port first quar- ter earn­ings on April 25. Last year, Face­book made $7.8bn (£6.2bn) from ad­ver­tis­ing in the first three months of the year, a 51pc in­crease.

“It’s hard in the long term to see an im­pact on its ad rev­enue,” said Ewen McIntyre, tech­nol­ogy an­a­lyst at Gart­ner. “Trust in Face­book has fallen slightly, but as we saw with YouTube last year I would ex­pect this to be short­lived.”

Mr Zucker­berg said ahead of his hear­ings in Congress this week that user threats to boy­cott the site had not caused “any mean­ing­ful im­pact”.

Face­book mar­ket­ing vice-pres­i­dent Carolyn Ever­son said she had not seen a rush from users to se­cure their data from ad­ver­tis­ers. “We have not seen wild changes in be­hav­iour with peo­ple say­ing I’m not go­ing to share any data with Face­book any­more,” Ms Ever­son told a Wall Street Jour­nal event in Lon­don.

Last week Cam­bridge An­a­lyt­ica’s act­ing chief ex­ec­u­tive Alexan­der Tayler dis­missed claims that it had “hacked” Face­book, but said it had legally ob­tained users’ data.

“Hun­dreds of data firms have utilised Face­book data in a sim­i­lar fash­ion,” he said.

u Com­pe­ti­tion watch­dogs should in­ves­ti­gate US tech gi­ant’s “vex­ing” data mo­nop­o­lies, a House of Lords in­quiry has said. The Lords Ar­ti­fi­cial In­tel­li­gence com­mit­tee called on the Com­pe­ti­tion and Mar­kets Au­thor­ity to launch a study of the sec­tor af­ter re­ceiv­ing com­plaints that the likes of Google and Face­book had too much con­trol over global dig­i­tal data, which is crit­i­cal for aca­demics and sci­en­tists de­vel­op­ing ar­ti­fi­cial in­tel­li­gence.

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