Late last May, GroupM’s head of paid social, Kieley Taylor, sent an email to the WPP-owned media agency network’s paid social teams in the US. She had just finished one of her regular check-ins with Facebook, during which she was told that any video ads bought through Facebook would now be automatically opted in to run across Audience Network, Facebook’s ad network of third-party sites and apps. Taylor’s message to her team was clear: Opt out now.
“Our hesitation to use Audience Network really comes from a place of complete lack of transparency,” Taylor said in an interview.
GroupM advises its clients and the agencies within its network against buying ads on Facebook’s Audience Network because Facebook does not tell advertisers where exactly those ads appear. When GroupM is paying for its clients’ ads to run somewhere, it expects to know exactly where they ran. And when those ads are running across an ad network, it expects to receive “at minimum a domain-level report,” said Taylor. So for GroupM, Facebook’s Audience Network inventory is “off the table because we can secure and validate inventory for any other partner to a greater extent,” she said.
The world’s largest media buyer advising its clients against buying from Facebook’s ad network poses a problem for Facebook, especially as the company is already pressured to find more places to serve brands’ ads. As Facebook gets closer to maxing out the number of ads it can squeeze in people’s news feeds, Audience Network offers an important release valve. It supplies additional inventory that Facebook can sell to its ad buyers so they don’t get discouraged by a stagnant news feed supply and redirect their dollars elsewhere.
But advertisers are increasingly taking a harder look at where they’re spending their money, and the inability to see where exactly that money is going within Audience Network has led some ad buyers to not only question whether their money should go into Facebook’s ad network, but also to decide it shouldn’t.
Facebook has started to extend some olive branches to advertisers frustrated with Audience Network’s lack of transparency and their relative lack of control. It has begun selling Instant Articles inventory separate from the rest of Audience Network, offered to provide some ad buyers lists revealing a portion of their ad placements and held talks about enabling private marketplace deals within Audience Network. But it remains to be seen whether those concessions would be enough to satisfy larger advertisers and whether they would risk alienating publishers.
An easy way to extend the reach of brands’ ads
Facebook opened its Audience Network ad network in April 2014 as a way for advertisers to extend their Facebook campaigns outside of the social network while using the same ad-targeting data as they did on Facebook. Originally a mobile in-app ad network that has expanded to desktop and mobile websites, as well as internet-connected TV apps, Audience Network held the promise of settling the Wild West of mobile advertising within the comfortable confines of a Facebook ad buy.
“The fact that you can organize core Facebook and [Audience Network] campaigns from a single platform against a common foundation of data removes a lot of friction from the historical modes of operating across mobile ad networks separate from other core mobile investments,” said George Manas, president of Omnicom Media Group’s Resolution Media.
The ease of extending a Facebook ad buy to include Audience Network has helped to accelerate adoption among advertisers. “From an investment standpoint, it’s more or less on par with our other mobile investments. Obviously it’s not nearly to scale of our core Facebook investment,” said one agency exec who asked to remain anonymous.
For GroupM’s MEC, clients’ level of investment in Audience Network has been “steadily increasing,” said Noah Mallin, the agency’s head of social for North America. (GroupM’s stance against buying Audience Network is a recommendation, not a rule.) “As more dollars have been moving in general toward video across all digital, Audience Network has been a good delivery system for that. Facebook has a rich targeting set, so being able to overlay that outside of Facebook has been a good thing.”
There’s a trade-off between Audience Network being a black box and its being an easy way to extend reach.
“While we have asked more of our programmatic and display partners in terms of understanding how things work, we give up some of that control with Facebook, but gain back a great deal in terms of targeting, results and reach,” said Jared Belsky, president of Dentsu Aegis Network’s 360i.
For some ad buyers, the tradeoff is worthwhile, but for others, it’s too much.
‘Transparency is table stakes’
“Once we have conversations with clients about issues around transparency and contextual alignment, we’re able to cull or temper their interest because we think those are standards we see with a lot of other partners we work with,” said Jeanne Bright, VP, group director and paid social practice lead at Publicis Groupe’s DigitasLBi.
The agency’s clients don’t feel hard-pressed to compromise their stance in order to capitalize on Audience Network’s cheap reach. “I haven’t heard of clients being on the bandwagon because of [Audience Network’s] reach. Facebook apps proper, especially Facebook plus Instagram, offer such incredible reach within the general population,” Bright said.
Facebook’s Audience Network appears to stand as the lone ad network that doesn’t share with advertisers a list of exactly where a brand’s ads appeared, based on interviews with a dozen ad industry executives. “I’m a little surprised they’re able to hold out; transparency is table stakes,” said one ad tech executive who helps publishers work with a variety of ad networks and asked to remain anonymous. Even the Google Display Network, considered Audience Network’s chief rival, reports all the places a campaign ran, according to Bright.
In addition to not knowing where their ads ran, advertisers don’t have full control over where they could run. For example, advertisers can’t specify the category of sites or apps on which their ads should run. The lack of contextual targeting makes it “harder to sell into clients who not only want to reach sports enthusiasts but want to reach them when they’re in a sports mindframe,” said Bright.
The lack of transparency also hinders Facebook’s ability to siphon advertisers’ spend away from other ad networks. Since advertisers don’t know exactly what they’re getting from Audience Network, they don’t know if it’s the same thing they’re getting elsewhere and if they’d rather get it from Facebook than those other places; of course, it could work the other way, with advertisers deciding they’d rather get it from those other places than from Facebook.
“The transparency would be great just to understand the difference in inventory across [Audience Network] and Google and [Twitter’s mobile ad network] MoPub: where are we overlapping, where can we negate overlapping inventory,” said Gila Wilensky, head of media activation for North America at GroupM’s Essence.
The black box begins to open
Facebook has made some concessions to provide more transparency and control to advertisers. Last June, Facebook introduced an option for advertisers to specify categories of sites and apps that they don’t want their ads to appear on. Since then, it’s added the ability for advertisers to create so-called “blocklists” of specific sites and apps to avoid. But without knowing which publishers are in Facebook’s ad network, advertisers are left to base their blocklists on the publishers in other ad networks’ placement lists and may miss publishers who aren’t on those lists but are in Audience Network. As a result, advertisers must trust that Facebook has sanitized its ad network’s supply sources, but advertisers don’t like uncertainty when it comes to brand safety. “If I’m a B2B advertiser, I don’t want to reach someone when they’re reading something not brand-safe,” said Bright.
In addition to enabling blocklists, three months ago Facebook separated Instant Articles inventory from the rest of Audience Network, which could satisfy brands who consider Facebook’s proprietary content format more proximate to Facebook proper and therefore more comfortable.
More recently, Facebook has offered to share lists disclosing some of the sites or apps on which advertisers’ ads appeared, according to four people with knowledge of the matter. And it has begun talks with media buyers about running private marketplaces within Audience Network, according to three people familiar with those conversations. Through the private marketplace arrangements, a brand would be able to take a list of publishers with which it has direct deals and share that list with Facebook, which would use its ad-targeting capabilities to pipe the brand’s ads to those publisher’s properties.
“Transparency is a big need for [advertisers with brand objectives], and we’re working with them on tests to find the right set of tools while maintaining the premium inventory we’ve been able to secure with publishers,” said Facebook’s director of publisher solutions, David Jakubowski, in an emailed statement. Facebook declined to make an executive available for an interview.
It’s unclear whether Facebook will ever extend the ultimate olive branch: a full list of everywhere an advertiser’s campaign appeared within Audience Network. And if Facebook ever provided that full list, it’s unclear if it would have the effect of boosting advertisers’ investment at the expense of losing publishers’ inventory.
The publisher dilemma
For publishers, Facebook’s Audience Network appears to be a success. “There’s not a publisher we work with today, particularly who has large scale in the app environment, that [Audience Network] is not their number-one revenue driver. It’s pretty universally the number one,” said an ad tech exec who asked to remain anonymous.
But much of that money may hinge on the fact that the advertisers don’t know whose inventory they’re buying. Facebook has worked directly with publishers to ensure the inventory they’re making available within Audience Network is high enough quality to not waste advertisers’ money. But for a number of publishers, that’s contingent on Facebook not telling the advertisers what they’re getting.
If an advertiser knew it was getting certain inventory from a publisher for one price within Audience Network, the advertiser may demand that price when dealing directly with a publisher or opt to take the money they’re spending directly with the publisher and redirect it to Audience Network, which may result in a fraction of that spend actually making it to the publisher. And if publishers find that their inventory is being devalued within Audience Network, they may be inclined to swap out the high-quality inventory they provide with low-quality fare, preventing Audience Network from cannibalizing the publisher’s sales but undercutting Audience Network’s value for advertisers.
Performance trumps transparency
Audience Network’s performance for publishers indicates that its lack of transparency and control for brands hasn’t hampered adoption among many advertisers, and Facebook has many advertisers, more than four million of them. Many of those advertisers may be more concerned with what they get in return for their ad dollars than where exactly those dollars went.
“That lack of transparency is mainly impacting upper-funnel marketing dollars,” said Manas. “From a performance standpoint, clients that are focused on driving bottom-line business results that are accountable to specific media spends and tactics, it’s much less of an issue.”
According to Facebook’s Jakubowski, the inclusion of Audience Network in a Facebook campaign results in a 12 percent average increase in conversions for campaigns intended to drive people to a brand’s site and a 17 percent increase in the number of installs for mobile app campaigns.
Wasserman Media Group’s Laundry Service has run ads across Audience Network for a variety of clients in the electronics, fashion, alcohol and e-commerce industries, said the agency’s VP of strategy, Jeremy Leon. In addition to Audience Network extending the reach of its clients’ ads by about 10 percent, the cost of that additional reach is low, making any performance boost a bargain. Click-based campaigns are 70 percent more cost-efficient when ads are run on Facebook’s News Feed and Audience Network than when they’re limited to the News Feed, Leon said.
But that’s not to say Audience Network is free of performance problems. When Laundry Service started running ads on the ad network in mid-2016, the agency found that a lot of the clicks on its clients’ ads were accidental; people were unintentionally hitting an ad when they may have meant to swipe past it. Around October 2016, when Facebook began ranking Audience Network publishers’ inventory to mitigate accidental clicks, Laundry Service did see a reduction, though not a total eradication.
“We still see a higher-than-average drop-off rate when we use [Audience Network], but the efficiencies that come from the lower [ad prices] offset the increased drop-off rates,” said Leon.
Performance doesn’t beat parity
But for others, Audience Network’s performance is a problem, and one that precedes transparency as a prohibiting factor.
“To be quite honest, adoption hasn’t been great,” said Wilensky. “We’ve tested it on a few accounts, and we just weren’t seeing as strong performance on [Audience Network] as we were on Facebook as well as Instagram. The upside is that there’s more reach, but from a performance perspective of cost-per-install, we’re not seeing the same efficiencies there as we are on Facebook’s core properties.”
That’s a tough comparison. Facebook in particular has a solid reputation for getting people to click on ads to download apps, to the detriment of even Instagram. Most third-party mobile ad networks may lag Facebook’s performance, but notably not all. Asked for a hierarchy of inventory sources for mobile app install campaigns, Wilensky said Google’s AdMob and Universal App Campaigns, then ads within Apple’s app store search results, then Facebook and Instagram; Audience Network “would probably be at the bottom of that list.”
However, the comparison between Audience Network and Facebook is valid in the context of Facebook’s ad load issue. If Facebook wants advertisers to feel as confident in their ads running across Audience Network as on Facebook, then it would help to establish more parity between the two platforms. But that parity isn’t in place yet, which hampered Audience Network’s adoption among retail and travel advertisers during the holiday shopping and travel season.
Social ad tech firm Kinetic Social specializes in working with retail and travel advertisers, and in the fourth quarter of 2016, none of its clients bought Audience Network inventory, despite a 16 percent quarter-over-quarter increase in their overall spend on Facebook’s ads in Q4 and a successful test of Audience Network by a former client prior to Q4.
Audience Network would seem like a good spot for those advertisers to send some of their dollars. Facebook has made a big push to interest retail and travel advertisers in its sales-oriented Dynamic Ads, and those ads can be syndicated across Audience Network. Facebook did succeed in piquing Kinetic Social’s clients’ interest and investment in those ads, but only in running them on Facebook and Instagram, not Audience Network.
Kinetic Social’s product manager, Paul Maksymowicz, attributed the absence of investment in Audience Network to a combination of advertisers being uncertain about how their ads would appear within the ad network and their inability to add third-party tags specific to those Audience Network ads. Advertisers can only add the tags to an overall Facebook campaign, restricting advertisers from independently measuring the performance of their ads running on Audience Network separate from the ads appearing on Facebook proper.
“The advertisers most likely to run Dynamic Ads tend to be some of the most granular with their tagging. They have a challenge in measuring Audience Network versus mobile News Feed. While there may be interest in running interstitials on Audience Network, measurement outside of Facebook via third-party tools is a hurdle,” said Maksymowicz.
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