Brands More Skeptical of Facebook than SMBs in Wake of Controversies

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Although most multi-location brands say they’re not changing how they use Facebook for marketing, well over one fourth of the ones that use it are re-examining or decreasing their use of it due to recent scandals, according to Street Fight’s latest survey of enterprise local marketers. Brands remain fairly dependent on social media in general, and it is their top area for increased local digital spending.

In the light of controversies over customer information, “fake news,” and Russian political meddling, in mid-June we asked 250 local marketing managers and decision-makers at big companies how, if at all, these issues had affected their attitude towards Facebook as a marketing platform. The results are shown in the figure below. Although a third said they were a little uncomfortable, most said they weren’t changing anything. However, when you strip out the ones that were not using Facebook, 25% of the remainder said their company would re-examine its use, and 4% said they would no longer use Facebook. That makes them slightly more skeptical than the smaller local merchants we polled in May.

For comparison, over 5% of the local merchants we surveyed who used Facebook for marketing said they would no longer do so, and 16% said they’d re-examine their use. Larger SMBs—those with 10 or more employees—were more likely to re-evaluate the big social network than smaller ones, and they were more likely to be using Facebook for marketing already. 

Among the big brands, attitudes varied a little by size, industry, and customer type. The billion-dollar-plus companies we surveyed were a little tougher on Facebook than the smaller ones. Retailers appear slightly more committed to Facebook than companies in financial services or healthcare. Restaurants and bars were somewhat polarized—three-quarters said they’d continue as always, but 10% said they’d drop Facebook. Overall, B2C companies were more likely to stay the course than B2B specialists.

We’re also exploring how dependent multi-location brands are on Facebook and other social media for local marketing. The figure below illustrates how many of those brands we surveyed listed a given local marketing tactic among its top 5 most effective. Note that a company page on social media was the number 3 most cited tactic, just about on par with email and direct mail. Paid social media advertising also made the top five for 16% of the respondents. In contrast, local merchants, who use fewer tactics in general, rate social media number one.

From that perspective, brands appear less vulnerable to a potential Facebook meltdown than do small businesses. However, they’re still using Facebook and social media for local marketing quite a bit. Consider the following:

  • When asked what they used regularly for local marketing, multi-location brands we surveyed were nearly 50% more likely to say a company page on social media than their own local branch or store websites. This gap was most pronounced in the food and travel sectors, but also pretty widespread in healthcare.
  • After their corporate sites, brands listed Facebook as the second most important site or service in importance to their company’s reputation, slightly ahead of their company’s local sites. While two-thirds listed their local sites in their top 5 most important for business information and listings, half also cited their Facebook page, higher than Google My Business or Google Maps.
  • The brands we surveyed listed monitoring social media as their number 3 most effective source of customer sentiment analysis, after online and phone-based surveys. Just as many said they collected customer information from social media regularly as from their corporate site. Point-of-sale purchase data and local site info topped that list.

In April, I recommended monitoring four areas to see if Facebook was losing steam as an effective local marketing vehicle: usage, government regulation, data integration difficulties, and advertiser abandonment. There’s no sign of movement in U.S. government regulations (nor will there likely be in an election year), and we won’t hear about Facebook’s user trends until it reports its Q2 earnings, probably the last week of July.

As for the other two areas, integrating data from other sources—especially from third parties—with Facebook data is a lot harder than it was. Facebook already eliminated its Partner Categories program. Acxiom’s apparent willingness to sell its core customer info business may or may not be a direct result. Some think data management platforms (DMPs) can be a solution for combining Facebook, Google, and first-party customer data for analysis and targeting. Fewer than one in five of the brands we surveyed said they used a third-party DMP to manage or evaluate their local digital marketing, so that will require investment.

In that April post, I made a crack about price declines if Facebook advertisers abandoned the platform. In the first quarter, Facebook CPMs continued to increase, up 40% to 90% year over year depending on who was doing the counting. So we’ll still have to watch for Q2 changes. But the Street Fight survey suggests that brands are still keen on social media, and until anyone else emerges, much of their budgets will go to Facebook. Ninety percent of those we surveyed said they were maintaining or increasing their spending on social media this year, making it the top local digital category among the seven we asked about. And in that figure, 48% said they were increasing social spending. Mobile was number two, and the bulk of mobile dollars goes to Google or Facebook. 

David Card is Street Fight’s director of research.

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