Facebook’s outage frustrates advertisers heading into the holiday season.

For more than five hours on Monday, while Facebook and Instagram were dark, David Herrmann fretted about ads.

Mr. Herrmann, a freelance media buyer, said that everyone he worked with relied heavily on the platforms, which soak up the bulk of the $80 million to $100 million in ad spending he manages each year.

One company that advertises exclusively on Facebook watched its revenue plunge 70 percent during the outage from the same period a week earlier, Mr. Herrmann said. Sales slipped 30 percent at another company, which spends $40,000 a day on ads.

“I was more or less checking Facebook consistently throughout the day, hoping it would come back,” he said. “But without clear direction from Facebook, we just had to wait.”

Ads fuel Facebook, which rakes in more than 98 percent of its revenue from more than 10 million active advertisers. In the three months ending in June 30, it pulled in an average of $78 million in ad sales every six hours.

But a deluge of criticism in recent years has caused many of Facebook’s customers to sour on the company. Frances Haugen, a former project manager for Facebook turned whistle-blower, testified before senators on Tuesday that the company was aware of the harms caused by its services, such as Instagram’s negative effects on teenage girls. Facebook has also faced advertiser outcry over its handling of hate speech, misinformation, privacy and more.

Graham Mudd, Facebook’s vice president of ads and business product marketing, wrote on Twitter on Monday that the outage affected Facebook’s ad platform and apologized “for the disruption this creates for our customers.”

Media buyers noted that Facebook went dark at the beginning of the most important period for many advertisers, as they kick off holiday campaigns during a season that is expected to be complicated this year by supply chain struggles and pandemic restrictions.

“There may be heads on pikes by the end of this,” Cory Dobbin, the founder of the Aaron Advertising digital agency, wrote on Twitter.

Many businesses rely exclusively on Facebook to reach customers, Mr. Dobbin, who manages roughly $50,000 a day in advertising spending, said in an interview. The majority of his clients’ spending goes to Facebook, with the rest to Google, Snap and other platforms.

“The name of the game for many advertisers, if it wasn’t already, is diversification,” he said. “This is a perfect example of why you can’t rely on a single channel to bring in all of your revenue.”

He continued: “It’s just far too risky to rely on Facebook to be there for your business long term.”

Mr. Dobbin said he would be surprised if Facebook refunded advertisers.

“This is how Facebook works,” he said. “Always has been, likely always will be.”

Many companies used the Facebook outage to evaluate how their ads on competing platforms were performing. As Facebook users flocked to alternate services, Twitter posted on its own platform “hello literally everyone,” garnering more than three million likes and a disoriented face emoji from Instagram’s account. Netflix posted a meme featuring its popular “Squid Game” show, portraying Twitter as a rescuer.

But Mr. Herrmann, the media buyer, said advertisers would continue to be shackled to Facebook because of its enormous size and reach.

“It can and does still have massive implications across the media buying space, so it’s not going anywhere,” he said. “TikTok is coming up quickly, but nobody at scale does it as well as Facebook.”

Source: Read Full Article