Agency News

Agency News

Despite the drama, agencies in hot pursuit of Facebook business

The social network is not the pariah portrayed by critics, leaders tell uneasy staffs

Garett Sloane

The media agencies still competing for Facebook’s business have found themselves having to defend their participation in the review to uneasy staffers amid the latest controversies surrounding the social media giant. In response, the remaining agencies—Havas, Dentsu and Publicis—are telling employees that it is better to work with Facebook than gripe from the sidelines.

The media agency review, which is in its final stages, comes following issues raised in recent weeks by whistleblower Frances Haugen, an ex-Facebook employee who leaked thousands of documents. Some of these documents painted Facebook as a company that pursues growth at all costs, even at the expense of teen health. The leaks led to congressional inquiries and cast Facebook as basically public enemy No. 1 in social media.

Ad Age spoke with a dozen agency employees within the big three media holdings companies still vying for Facebook’s $1 billion ad business, at Havas, Dentsu and Publicis, mostly on condition of anonymity, to understand how they are feeling about Facebook becoming a potential client.

There’s certainly a new level of uneasiness about adding Facebook to their portfolios. “With everything going around Facebook, not just one, but many people asked why we are involved [in the pitch],” said one high-ranking executive inside one of the agencies that’s part of the review. The overarching message by these agencies has been that Facebook is working on fixing broader challenges that impact every social platform and that the company is building for the future with technology like the metaverse. Ad agency leaders are assuring staffers that the social network is not the pariah being portrayed by so many critics.

Madison Avenue has become more vocal about the need for corporate accountability. There has been a push from brands and ad agencies to lead by positive corporate example, and for some people, the inclusion of Facebook as a client could undermine that posture of public values.

“We believe the best way to make change is to be a part of it,” a second agency executive responded to concerned staff. “And I think our involvement in this is to help make Facebook what it should be. Because there is inherent good in what they’re trying to do.

If there were no inherent good, then why is everyone logging on daily, hourly.”

Facebook is expected to announce the winner of its media account by the end of the month — that is, if it selects any of the remaining three agencies. Facebook declined to comment for this story.

Dentsu and WPP have served as Facebook’s media agencies for a decade, but WPP pulled out of the review in July, leaving only Dentsu, Havas and Publicis.

Part of the review process so far has been to run tests with agencies looking at how they would respond to the public scrutiny through marketing strategies, according to people familiar with the process.

Agencies have delivered thought leadership points of view about how they would handle the big subjects facing the company, like answering antitrust questions about Facebook’s position in social media. Facebook has been deemed a monopoly by regulatory and lawmaker critics in Washington.

Facebook also has to deal with a series of outside threats like Chinese-owned TikTok and Snapchat. People familiar with the agency review process said that Facebook needs a partner that demonstrates a keen understanding of all these threats.

Ethical conundrum Ad Age asked the 4A’s, an advertising trade group, what agencies should tell staff about working with clients that raise ethical questions. “There needs to be a framework for how an agency approaches the decision and discussion with staff,” said Marla Kaplowitz, 4A’s president and CEO, by email.

“Using a framing of past, present, and future could be applied. The past: Nothing can be undone. Whatever is in the past happened, and there is no point in denying or minimizing it,” she continued. “The present: What is this company doing today? Have they made changes that rectified any of the issues from the past? The future: What trajectory is this company on when it comes to the things that are important to the environment, society, employees, etc.? And then reviewing all the information and assessing the company and its actions against the agency’s culture, values and beliefs.”

Facebook started its media review process in March, well before the latest flareup of protests. There has been criticism of how its algorithm could spread divisiveness and misinformation.

The advertising world applied pressure through a boycott in July 2020, with some of the 10 million-plus advertisers that advertise on Facebook tried to exert some power over Facebook’s $85 billion advertising operation. Advertisers could not hurt Facebook’s bottom line, but they did help Facebook think more about how its algorithms work, what content it prioritizes and invest in developing new brand safety tools. If Facebook could not become the ultimate speech police, removing every possibly offensive post, it could give advertisers some control to avoid offensive content.

In September, Haugen came forward as the whistleblower, claiming the company was still not doing enough, caring more about keeping users scrolling to in turn serve more ads. Facebook pushed back hard with CEO Mark Zuckerberg calling Haugen’s claims “just not true.”

Damaging but no surprise “The whistleblower was damaging, but this is an ongoing conversation versus being a new one,” said a third agency executive at one of the agencies in the Facebook review process. One of the factors that has prevented Facebook from a bigger advertising backlash is the fact that a lot of the issues raised by the whistleblower seem to be ones that advertisers have been aware of for a long time, and were already committed to working on with the social network. There also is a sense that other platforms are not immune from many of the same issues.

There are groups like the World Federation of Advertisers, Global Alliance for Responsible Media, Association of National Advertisers, 4A’s and more that have been working to fix brand safety and hate speech on every platform. The industry’s stance has been that while Facebook poses unique challenges, it is not uniquely bad for democracy. All platforms have their weaknesses: YouTube, Twitch, TikTok, Twitter, Reddit, Snapchat and Pinterest.

In the meantime, Facebook’s agency review and ad business continue as usual. In September, Facebook launched an Instagram ad campaign during the heat of the debate about how healthy the app is for teens. The ad was directed by Instagram’s newest creative partner Johannes Leonardo and it tells users to “stay true to yourself. Don’t worry what other people are thinking.”

Johannes Leonardo is one of several creative agencies that work on Facebook brands, which include Instagram, WhatsApp, Oculus, Portal devices and the main social networking app.

Ad Age gained some insights into how the review is progressing and what Facebook is looking for in an agency. Ironically, one focus is “brand safety” and ad fraud, according to one person close to the review. In the past several months, Facebook had held real-time buying exercises with Dentsu, Havas and Publicis to test their capabilities buying ads on the open web through programmatic channels, which is automated advertising using real-time bidding on inventory across websites and apps. The open web is notorious for being an opaque place to run ads: It’s hard to analyze whether ads show up in safe websites, it’s hard to prevent fraud and it’s challenging to measure how effectively those ads worked.

Keep them close Agencies are still competing hard for Facebook’s business because despite any setbacks of late, there is a sense that the social network is a company that any agency would want to keep close, according to people familiar with the thinking of the agencies in the review.

Part of winning Facebook’s agency business will hinge on being able to demonstrate that the agency has its finger on the pulse of one of Zuckerberg’s most important technologies: the metaverse.

“Whatever you think about Facebook as a user or as a human, go listen to Zuck talk about the metaverse and future of the internet,” said one person who is directly involved in Facebook’s agency review process. “If I’m the CEO of an agency, I think, ‘Wow I want to be close to that because there is a whole metaverse ad industry waiting to be built and the winning agency is going to be right in the conversation.’

That’s not part of the pitch, it’s really only just materialized, but agencies are talking about the metaverse no matter how fantastical you might think it is.”