Today in Digital Marketing - Meta Cozies Up to Trump. What Now for Marketers?

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Starting point is 00:00:21 If you have questions or concerns about your gambling or someone close to you, please contact ConnexOntario at 1-866-531-2600 to speak to an advisor free of charge. It is Tuesday and time for our weekly deep dive episode. This week, our Meta Ads correspondent Andrew Foxwell is here. Andrew is a veteran Meta Ads buyer and has visibility into $300 million in Met meta ad spend through his slack community called foxwell founders hello andrew hello last week uh of course mark zuckerberg announced meta would remove their fact checkers leave it in the hands of users they also made some i think safe to say pretty drastic changes to their content policies, including permitting speech, which had previously been

Starting point is 00:01:06 classified by the platform as hate speech. So some examples, you can now say that people who are gay are mentally ill, you can call women household property. This, of course, a signal to the incoming Trump administration that is willing to move its position on free speech. As a general rule, Andrew, how does the advertising community respond to changes like this? I mean, I think it's sort of a wait and see initially, right? I mean, I don't know that you really ads have always lived in a little bit of a different ecosystem than organic content. So I think that while there's going to be changes to the way that it will go, I think it's going to be, you have to see what it's going to actually look like first. So how it's going to be implemented.

Starting point is 00:01:53 And I think, you know, big changes, it's always like good as an advertiser, especially someone that's been doing this as long as I have, that you just kind of have to hold back, really look at the way that they, what they've said, if they've mentioned advertising, if they've referenced it at all, and then start to see basically what the backend changes are that they're making in terms of like advertising documentation or anything that are on the official blog

Starting point is 00:02:23 or even API related stuff. That's where you'll notice the changes first, if you were to see anything at all. But I actually think they're making content moderation a different, they're kind of going a different direction. And I think that some have said, well, it's going to make it a little bit easier on ads. And I actually think ads are going in a little bit different direction. So I think it's kind of an interesting place that we find ourselves. Yeah, you know, one of the sort of interesting things about the Canadian news ban, which still exists, if you go to an Instagram or a Facebook page of a Canadian organization that provides news like that, like a newspaper or radio

Starting point is 00:02:58 station or something like that, it's just all blocked out. It's all blacked out. But if you are on the admin side of it, it says, yeah, you're actually blocked out. But you know, if you want to run this as an ad, we'll let it through, you know, so I see your point. I think there may be, you know, bring some bags of money and it may change. Last week, Zuckerberg kind of doubled down on it language wise and said that brands and people who leave the platform as a result of these changes are virtue signaling, which I thought was pretty dramatic language for a CEO to use. Is there a fear here? Do you think that if brands decide that they're going to either make an announcement, you know, as we saw on X sometimes, that they're leaving or if they just kind of fade away. Is there a risk that that will be sort of held up as, well, you're just doing it for the for the signaling?

Starting point is 00:03:52 I mean, I think they certainly want to paint it that way. I think that he you know, I think there's a couple different factors to it is like one is, you know, they do have enough of a monopoly that I don't think that that like there's nowhere else to go. So I think they have people trapped to some degree. I think, you know, the thing we have to remember about Zuckerberg is like he's always been a libertarian, like he's he's always signaled that he's a small government libertarian. He's never come out, obviously, and said this, but this is who he is. And this is sort of a return to who he actually is. And I think he feels a lot more comfortable with the direction of the company going this way.

Starting point is 00:04:29 I know people that worked at Facebook in public policy, specifically like the head of public policy throughout the Obama and the first Trump era. And I think, you know, their general feeling is like he never liked the fact checker thing anyway. So it wasn't really what he wanted to do. It felt unnatural to him. And so I think this is just a return. So I think him saying something like virtual virtue signaling is just language that he himself actually feels. And he has the weight of the company behind him because there's nowhere else for a lot of advertisers that are direct response folks to go.

Starting point is 00:05:11 That's really going to be of the same scale and impact that Meta is. There's plenty of places for them to go, but they're not as reliable as Meta. So I think that if they were to say, if a company were to say, we're not going to do it anymore, we're not going to spend time there. I think painting them with that brush probably would actually be successful to the majority of at least the American electorate, because that kind of feeling is very popular in at least half the country right now since the country reelected Trump.

Starting point is 00:05:40 Yeah, when Elon Musk took Twitter, I think it's fair to say to the right, there was a lot of advertisers that pulled out of there. But to your point, Meta being sort of the must-buy Meta and Google, I guess, X or Twitter at the time was not really considered that strong on the DTC side anyway. CPCs were atrociously high, so it was a lot easier for advertisers to, to pull out. Can you take us back? I know that that you watched that as well. We sort of where the parallels were with with how the marketing community responded to x and what lessons we might be able to learn about how the marketing community might react to this on the meta side. Yeah, I mean, I think it wasn't a huge thing for folks leaving X when they did, when Musk took over. Like it wasn't something that was massively impactful because it wasn't really used. It just hasn't been a tool in the direct response e-commerce advertisers playbook.

Starting point is 00:06:41 I think that it's always been, oh, yeah, that's kind of interesting. Maybe we should try that. But it never has oh, yeah, that's kind of interesting. Maybe we should try that, but never has scale to continue really for a lot of folks. So I think a lot of people making big noise about it, you know, actually didn't have any business implications for them. So it was like a PR thing. I think that if they were to do the same thing with meta, it would be a PR piece, but you would largely lose out on actually, I think, a lot of traffic. So, I mean, I saw a study that was from a brand that I know quite well, a massive e-commerce brands and makeup brand. And they just ran a really legit, serious

Starting point is 00:07:17 scientific incrementality study. And it said that if they hadn't been running Meta ads, their sales on Amazon would have been 12% lower. And, you know, that's the kind of impact that meta has in terms of the properties that it owns. So you can say it. And I think the marketing community can, can we, I mean, to some degree, we're all kind of handcuffed, honestly, continuing to advertise there because there just isn't anywhere that has the scale. And the, I mean, you can get temporarily scale on some of their places or, you know, a low CPA on some places like you can on Meta, but it's not going to last just because of the amount of daily active users. So that's, it's really hard to say, but I think a lot of folks saying they're going to leave is a principled stand. And I respect them if they want to do that, but I think a lot of folks saying they're going to leave is a principled stand. And I respect them if they want to do that. But I do think it would have actually, if they're currently running so much on meta, like I think it would have obviously a negative impact on their business. What impact would it have on the on the auction, though? Let's say

Starting point is 00:08:18 that a portion of advertisers do decide to pull out as we saw on X, perhaps not to the scale that we saw with X. Does that have a measurable difference on, I mean, you know, the ad system is an auction. Does it have an actual difference on the pricing? Yeah. I mean, I think if we were to look at something like, you know, I mean, you look at what like Temu had, right, in terms of the amount of market impact they were able to go because they were spending whatever it was, the rumors were they were spending five to $10 million a day in the US market when they were spending as high as they were. And because of that, that created obviously dynamics in the auction in terms of high CPMs competition being higher. I think that if a lot of people banded together

Starting point is 00:08:58 to be something of that size, you could see lower CPMs, you could see a cheaper, you know, a cheaper ad basically. But I don't know that it would have, I don't know that it'd be as impactful for everyone like, oh man, this is really great. I'm so glad that those people left. There's just so many eyeballs that in the auction is such a massive entity that I don't, I wish it would have a bigger impact, honestly, to like make a bigger statement. But I don't know I wish it would have a bigger impact, honestly, to like make a bigger statement, but I don't know that it might, you might have like slightly cheaper pricing, and I don't, that'd be about it. But within categories, does it work that way? Like, I mean, if you are in a category, which is traditionally left wing, and I can't come up

Starting point is 00:09:38 with an example to save my life right now in my head, but, you know, let's say an environmental organization. Is it granular enough where if a bunch of organizations on quote unquote the left, like environmental groups, pull out, does that change it for just their sector? Like, is it, can we get, is it sort of siloed in that way? Absolutely. Like if you have a massive amount of companies or organizations that are left-leaning, would it make it easier to reach people in urban centers in the United States? Like potentially, yes. But I mean, I think we have to remember like the scale of this. It would have to be such a large percentage of people that would be willing to say, we're not going to do this and we're going

Starting point is 00:10:26 to go somewhere else. And the issue is, is that there just isn't anywhere else that's reliable enough, right? So I wish there was, I wish there was another place, you know, and I'm sure people email me saying, well, you could do YouTube, you know, which is a common example. Sure, but it's not the same scale. It doesn't hold the same level of scale and it doesn't hold the same level of consistency within the auction either. So, I mean, in certain places you can make a case for TikTok shop being at that level, but it's, it's rare. It's more like those are usually beaut, like makeup companies or, you know, it's, it's not like it works in every vertical.

Starting point is 00:11:05 So it'd have to be, it'd have to be a concerted sort of effort to say like, we're, we're okay having low sales as we make this stand together. Um, and if it's a month, you know, if it's a bunch of nonprofits, like I don't, nonprofits aren't a massive investment. So that's, that's a hard, it's a hard, a hard one to, to push. Um, but if, you know, every supplement was going to leave, which like they're kind of being pushed out with this like change, will it make it cheaper like in the health and wellness segment potentially? So, yeah, that's pretty hard to say. But I don't see a future in which that's the case.

Starting point is 00:11:44 You know, I think this is a little bit of a downer feel on this right now, but I think a lot of people feel really defeated in terms of like, they just feel even those that might have voted for President Trump, you know, and these kinds of changes are coming at them. Like, I think people feel overwhelmed and just defeated by all of the the like sort of everything that's happening. And I don't I feel like the fight is a lot less than it was in the first time around from a lot of folks. And I think, you know, you've seen that signaling from, you know, Tim Cook going to Mar-a-Lago, like meeting with him right away. Right. And I think that's the same thing. It's like Zuckerberg clearly feels comfortable enough to make those types of statements that like the markets with him enough on that.

Starting point is 00:12:30 And that doesn't affect the pricing necessarily of the stock in terms of the business outlook at this point. It's interesting to sort of see how the larger user base community is affected by this on the organic side. You know, probably there's not a ton of reach on the organic. There hasn't been for years on Facebook or Instagram anyway. So I don't know that there's going to be a big shift there. But you know, I think about people like my mom, who is in her early 80s, and runs an art group on Facebook, a popular one with thousands of people, and it's a specific type of art that she does. And she wants to leave Facebook for, for reasons of, you know, that we're discussing here. And she asked me, where should I take my group?

Starting point is 00:13:11 And like you say, you know, just like on the ad side, there isn't really a space that has the scalability and the reliability, or predictability, perhaps better phrasing than reliability on meta ad platform. You know, she was asked, she was asking me about Discord and an app called MeWe. And she asked about Tumblr, you know, like, there's nothing. There's really nothing that is what Meta has. Yeah. And I think that's, I mean, number one, obviously, that's a sign of a total monopoly, which is sort of what we started with.

Starting point is 00:13:42 And I think the second thing is, you know, the equivalent of this is like in, when I was growing up, I mean, I was born in the mid eighties, like this is the equivalent of the nineties of saying like, like, I'm going to unplug my phone. I don't want a phone number anymore. You know, like you, you can't really, I mean, to some degree, like you need it to function in life. Um, you know, and I'm not saying that you need every piece. You don't need all, you know, to function in life. You know, and I'm not saying that you need every piece, you don't need all, you know, don't need Facebook, you don't need Facebook Messenger, you know, and Instagram and, you know, and WhatsApp, whatever, like there's, you can take pieces of it, but you can't be entirely removed from it. Unfortunately, I think if you were,

Starting point is 00:14:18 if you really want to operate in today's, today's world. And, and so, yeah, I mean, the ad side of it is, I think there's, on the one hand, there's going to be, will there be more people on the platform because there's less moderation and less content moderation? And will the fact that there's more unpoliced, unchecked with community notes content out there, will that create a more of a TikTok effect where it's like almost like people looking at a car wreck? Like, you know, it's like the same reflex, like you like that kind of feeling or, you know, even if you don't know it, but like chemically your brain like that kind of feeling or, you know, even if you don't know it, but like chemically, your brain likes that kind of feeling. And so will that continue to push users onto the platform?

Starting point is 00:15:11 Therefore, we'll have continue to have stable, you know, DAUs. Like I think, unfortunately, at this point, that's probably the case. I think in the short term, that's probably the case. The long term from an advertiser standpoint is I think it's it will degrade the quality of user over time and and not have community notes. And then, and like, I think they're going to, that piece is going to be policed a lot more because I think Facebook, they've already sort of known is like, ah, let it be to some degree. Um, and so that, that's, I guess how I feel. So I think Instagram is going to get ultimately over time, like more expensive. Um, and meta or like Facebook will probably actually get cheaper

Starting point is 00:16:07 because there's going to be a lot of people going on there to basically look at incendiary content. Never a dull moment in our world. Andrew, thank you. Thank you. Andrew Foxwell is our meta ads correspondent. He's here every month. You can learn more about Andrew's digital ads training at todayindigital.com slash Foxwell or his Slack community of senior meta ad buyers at todayindigital.com slash Foxwell or his Slack community of senior meta ad buyers at todayindigital.com slash founders. Both of those are affiliate links. You can find those links at the bottom of our show notes.

Starting point is 00:16:32 That is it for today. I'm Todd Maffin. Thanks for listening. See you Friday for our weekly wrap up of the week's digital marketing news.

Today in Digital Marketing - Meta Cozies Up to Trump. What Now for Marketers?

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