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May 7, 2018

How Has Cambridge Analytica Impacted Facebook Advertising?

Increased conversation and a more proactive approach to data security and privacy.

Facebook Advertising

Last week, Cambridge Analytica announced it’s shutting down as a result of its Facebook data scandal. Meanwhile, there doesn’t seem to be any significant impacts to Facebook’s business, in terms of both advertising and usage.

U.S. ad spending is forecast to grow 6.6 percent in 2018, reaching nearly $221 billion. Much of this growth will be driven by Facebook and Google which, together, will capture more than a quarter of the market. Facebook alone will generate $21 billion in ad revenue, up 17 percent from last year.

“In 30 or 60 days, people are going to realize that Facebook’s still got an audience of 2 billion people,” said David DeBetta, vice president of media at Rapp LA, a direct marketing agency, in a recent eMarketer article. “They’re so large that they are a cornerstone in almost every single digital marketing plan. We’ve been watching [ad performance] results on a daily basis, [and] we haven’t seen much of a change in response rates.”

Facebook also recently reported its first quarter 2018 results. Here are some highlights:

  • Daily active users: 1.45 billion on average for March 2018, an increase of 13 percent year-over-year.
  • Monthly active users: 2.20 billion as of March 31, 2018, an increase of 13 percent year-over-year.

On a recent Denim Rivet podcast episode, Ryan Apgar, senior vice president of cyber management at Socius Insurance in San Francisco, shared what he believes will be the biggest impact of the Cambridge Analytica issue: increased conversation and a more proactive approach to consumer privacy.

“I don’t think it’s going to be the watershed moment in terms of U.S. focus on consumer privacy in terms of actual change occuring. I think it’s serving a very important purpose of bringing to light this very hot topic for us as consumers,” Apgar said. “This is going to help spur more streamlined thought and proactive efforts, but I don’t think we’re going to see drastic change from this.”

As we recently shared in Denim’s Product Design Philosophy, taking a proactive approach to data security is part of the ethos of our company.

For example, we’ve recently released a major enhancement to our Audiences product that will allow Denim platform managers to upload a contact list to create a custom or lookalike audience. As part of that process, Denim will require platform users to accept terms stating they have the necessary consent to use the data in the contact list. Once accepted, the data will be locally hashed on the manager’s system before it is uploaded and passed to Facebook to safely and securely create an audience. Denim will also require users to recertify their right to use the data every 90 days.

“The 90 day requirement isn’t from Facebook or anyone else,” said Charlie Turri, Denim’s CTO. “It’s an additional layer of protection we felt was important to add to proactively help our customers meet — and even exceed — industry requirements and consumer expectations related to privacy and security.”

To learn more about Denim’s new Audiences enhancement and how we help our customers safely and securely localize and micro-target social media and mobile advertising, get in touch with us today!

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