Major brands and the large advertising agencies that represent them are still trying to figure out where they fit into Facebook’s future following the departure of Carolyn Everson, and some of them say initial attempts by the social network to reassure them in meetings and selective outreach have not calmed their nerves.
As has been well-documented, Facebook’s largest advertisers leaned on Everson for a decade every time the social media giant came under fire, including during last summer’s ad boycott. “When Carolyn said, ‘it’s going to be OK,’ you believed her,” says a top executive at one of Facebook’s largest advertisers, speaking on condition of anonymity. Then last month, Everson left, resigning as VP of global business group at Facebook.
Nicola Mendelsohn has emerged as the interim replacement for Everson, serving as the liaison to the top brands and agencies. Mendelsohn was VP of Facebook’s business group in Europe, Middle East and Africa.
Since Everson left a month ago, Mendelsohn has been on a mission of fallout control, meeting with brands and agencies over video conferences. Advertisers who have sat in on sessions with Mendelsohn say that Facebook has offered little in the way of a concrete vision to replace the steady hand that Everson provided. Mendelsohn is well-liked, these advertisers say, and she has her own relationships with some major brands, like Diageo, where she is a non-executive director. However, to most U.S. brands and agency heads, Mendelsohn is not well-known. Also, Facebook has so far only named Mendeslohn as an interim replacement, which means if a new candidate emerges, then that advertising leader would have to make introductions all over again.
A Facebook representative says that Mendelsohn has led a number of meetings with brand and agencies. Last month, the Facebook Client Council, which is a group of top Facebook advertisers, convened with Mendelsohn in a virtual reality setting during Cannes, which typically takes place in France but was held remotely this year. Facebook owns Oculus, a VR platform, and the social network used it during the advertising festival.
“As part of Facebook’s presence at Cannes Lions, we’ve invited a group of clients to join us on the Croisette via virtual reality,” Mendelsohn wrote on LinkedIn, describing the event. “This involves putting on a Quest 2, picking an avatar, and mingling with other [guests'] avatars under the palms.”
“We are committed to supporting businesses of all sizes grow and thrive,” the Facebook spokesperson said by email. “Our partners have always been a key focus, and we have an exceptional team in place to support them.”
An agency exec, who is familiar with how the first round of outreach has gone with Mendelsohn, says that she has simply been making introductions. “Nicola [Mendelsohn] is there if brands bump into any issues or have any concerns,” the exec says. “The big thing about Carolyn was she was always there for everyone so Nicola is definitely trying to ensure people feel they still have someone they can call.”
Facebook has also promised to continue the work that Everson left behind, especially changes the social network planned following the high-profile advertising boycott last July, when major civil rights groups including the NAACP and Anti-Defamation League rallied more than 1,000 brands to protest hate speech and disinformation on the service. The so-called Stop Hate for Profit movement prodded Facebook to work with industry groups like the World Federation of Advertisers and Global Alliance for Responsible Media to define hate speech and prevent its spread using new industrywide standards.
Chasing the long-tail
The marketing uncertainty comes at a crucial time for Facebook advertisers that are worried about receiving the same level of support from the social network as it plans a future that doesn’t always coincide with their needs. Brands are looking for a safe platform with controls that help them steer clear of the messes that Everson always helped mitigate. For instance, in 2015 and 2016, Facebook made mistakes reporting metrics to brands about video views by over-counting how many people watched certain non-ad videos. That was the type of crisis that Everson cleaned up. Or during last year’s brand boycott, Everson was the one to come to advertisers with a plan to rectify their concerns about running ads near such objectionable material.
The question is will Facebook care less for the top-spending major Fortune 500 brands and their increasingly heavy demands. Major marketers such as Unilever, Procter & Gamble, Disney and others have pressed Facebook to take on the sticky brand safety and political and social issues while providing more transparency and control to advertisers. That is in contrast to the so-called “long-tail” of advertisers—millions of direct-to-consumer marketers and small- and medium-size businesses—that make up most of Facebook’s advertising base and $84 billion in yearly revenue. These types of advertisers just need to see their marketing perform well to keep spending with the platform, and they have, to the point that the brand boycott last year was not even a blip to Facebook’s ad machine.
Advertising spending stats on Facebook show the shifting mood of major brands, too. Pathmatics, a digital advertising analytics provider, looked at the top 25 biggest Facebook advertisers, and found that Disney and Procter & Gamble both pulled back from parts of the service since the boycott. (Pathmatics does not have full visibility into Facebook's ad revenue and where it comes from, but its data can identify trends.) Disney was the No. 1 advertiser on the Facebook app from July 2019 to June 2020, spending $318.2 million, according to Pathmatics. From July 2020 to June 2021, Disney spent $78.8 million, dropping to the No. 13 advertiser. Procter & Gamble went from the No. 3 advertiser, spending $131.4 million the year prior to July 2020, to the No. 16 advertiser, spending $68.6 million in the year since.
Disney and Procter & Gamble also shifted how they spent money with Facebook, according to Pathmatics. Disney ran fewer ads in the Facebook app, where most of the ads appear in News Feed, which has caused the most brand safety concerns. Disney spent more than 25% of its Facebook advertising in the app environment pre-July 2020, according to Pathmatics. Since then, Disney is putting more into video advertising on Facebook, which has more brand safety controls. Procter & Gamble increased its spending on Instagram, also owned by Facebook, while decreasing the spending on Facebook’s main property, according to Pathmatics.
Disney and Procter & Gamble were not available for comment for this story. Meanwhile, Facebook’s advertising prospects have been strong regardless of the major brands. In the first quarter of 2021, Facebook advertising grew 46% year-over-year to $25.4 billion.
Ad Age spoke with a dozen brand and ad agency executives, most of whom spoke on the condition of anonymity, for a candid assessment of how the relationship is evolving with the most important social network in advertising in the post-Everson era. “Facebook has to weather this whole Carolyn thing,” says an executive at a brand that spends big on Facebook advertising, discussing why Facebook has likely remained mostly low-key following Everson’s exit. “So, they are laying low. There is no need to stir the pot.”
Where did Everson go?
One of the main questions brands and agencies still have, however, is “what happened to Carolyn?,” said another top agency exec who is close partners with Facebook. The exec says that Facebook reps have not touched the subject, lending to an air of mystery around why the 10-year Facebook veteran decided to leave on a dime. “No one can make sense of what happened,” the agency exec says.
The conventional wisdom around Everson’s departure is that she was passed over for a key new role at Facebook as chief business officer, which went to Marne Levine, who had been VP of global partnerships, business and corporate development. Levine is replacing David Fischer, chief revenue officer, who is leaving in September, in Facebook’s hierarchy.
Facebook watchers have read more into Everson leaving, though, beyond a spat over a job opening. They see it as a sign that Facebook is appointing the people most loyal to CEO Mark Zuckerberg and Sheryl Sandberg, chief operating officer.
Facebook is entering a critical and combative phase as regulators in the U.S. and Europe challenge its personalized advertising business model. There are nonstop inquiries from Congress for executives to appear before lawmakers. And there are lawsuits flying regarding Facebook’s past practices, which involve subjects like how it measures ad performance and metrics discrepancies it reported to brands.
One top agency executive says that there were concerns within Facebook’s hierarchy that Everson would not continue to “tow the party line” as the company heads into its next phase of battling regulators, lawmakers and lawsuits.
There are signs that Facebook is not abandoning the biggest brands. In fact, in January, Facebook took one of its biggest brand safety steps yet, promising to try new controls in News Feed, where it serves individualized streams of content to 1.8 billion people a day.
Facebook recently started testing what are known as “topic exclusions” with three major brands, Ad Age has learned. Theoretically, brands will be able to minimize appearing above or below offensive posts in Facebook News Feed. “Carolyn helped make that happen,” says a top marketing executive from a big brand advertiser on Facebook.
One advertiser who is familiar with the brand safety program says that the brands that made it into the pilot program were the ones who were most willing to keep working with Facebook during the tumult of the brand boycott last year, showing that Facebook still knows how to reward its most faithful clients.
The mood among major brands is that Everson was one of the main reasons they stuck with Facebook this long even as the social network handled crisis after crisis. “We stayed on the platform … because Carolyn convinced us to stay,” says another marketing exec at a brand, referring to how the brand managed its Facebook strategy during last year’s boycott.
At the same time that Everson was making nice with brands, however, Zuckerberg and Sandberg were emphasizing that the company was not beholden to an upper-echelon of top advertisers. Facebook’s business is only becoming more reliant on building for millions of merchants with a focus on ecommerce and new forms of media like livestreaming and audio. Facebook also has to prepare brands for the next-generation of privacy and data rules that are reshaping how marketers use the internet to target ads.
“Facebook, like Google, has so many clients and marketers where there is no human involved in the process,” says Brian Wieser, global president of business intelligence at GroupM. “What’s really needed for any company like that, Facebook, Google and Amazon, is making sure that they are building the best tools that are the easiest to use with the broadest applicability.”
That also means that marketers at big brands could be right that they could become less of a priority. “When Everson was brought aboard [in 2011] there was much more focus about getting brands aboard,” Wieser says. “Now, the focal point is less the large brands and large agencies than it is about tech services, operations and all those other things.”
