Facebook's data scandal isn't scaring away advertisers, says Publicis CEO

Key Points
  • Facebook's entanglement with Cambridge Analytica has caused trust in the organization to erode among users.
  • Advertisers still are down to Facebook, which can target consumers using data is has gathered on them.
  • Some big advertisers have expressed frustration with the measurability — or lack of it — around ads on Facebook.
Facebook CEO Mark Zuckerberg speaks at the company's 2017 F8 developer conference in San Jose, Calif.
Source: Facebook

Facebook's data privacy scandal has done little to deter advertisers from the social media platform, according to a major ad firm.

Publicis Media CEO Steve King told CNBC that Facebook has experienced an erosion of trust after allegations that right-wing consulting firm Cambridge Analytica used millions of users' Facebook data for fake news and other political dirty tricks.

But sentiment among advertisers remains unchanged.

"Each of these issues has had a different reaction," King said, referring to scandals that have plagued Facebook. "Unlike the brand safety issue, none of our advertisers have paused their advertising" because of Cambridge Analytica.

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The world's third biggest advertising group, Publicis Groupe, the parent company of Publicis Media, has faced major headwinds in recent years amid shrinking client budgets and fierce competition from Facebook and Google, which take in more than half U.S digital advertising spending, according to numbers from eMarketer.

Those platforms have proven valuable for clients that want maximum exposure and the ability to target ads based on the mountains of consumer data, King said. He added that Facebook remains the second largest advertising platform Publicis Media partners with.

Frustration with metrics

Still, big-name advertisers have expressed increasing frustration about the lack of transparency around metrics used to measure the effectiveness of a campaign on digital platforms like Facebook and Google.

This year, Procter & Gamble, the world's largest advertiser, said it cut more than $200 million in digital ad spending last year after data showed those ads were not effective.

Facebook announced changes to simplify and clarify its metrics to appease advertisers in February, acknowledging flaws in its calculations.

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King said declining trust in the platform among users, and growing wariness over how personal data is being used, has become a growing concern.

"If we see the level of engagement or people deleting Facebook, if that becomes a trend over the coming months, then absolutely it will have a causation and effect on the perception and investments from our clients," King said.

In recent years, Publicis Groupe has tried to build its own ability to adapt to the changing digital landscape.

In 2015, it acquired digital firm Sapient to buttress its marketing, technology, and consulting capabilities, citing the importance of thousands of developers the company employed in India. Last year, it developed Publicis Spine, a platform that combined its technology and data arms to sell clients more targeted ads.

"If we can learn from these digital disruptors, then we should have a model that is as future-proof and that is as strong for capabilities of growth as the last 90 years," King said.