Facebook's Data Predicament Isn't Likely to Affect Advertising on Instagram

Facebook CEO Mark Zuckerberg is presumably sweating a little this week. The social platform’s market cap dropped by $50 billion, and government officials on both sides of the Atlantic call for answers and/or investigations surrounding how data on 50 million users was shared with third parties to potentially influence voter behavior in the 2016 election. But despite already facing heat over its role in disseminating fake news and Russian meddling, industry experts say the advertising landscape is not likely to change much in the short term—and that includes on Facebook-owned Instagram. Brad Wellen, group director of social at digital marketing agency Huge, said Instagram will likely be shielded from most backlash because it's widely viewed as an independent channel. “I anticipate users will become more wary of how their personal data is shared and exercise increased caution when publishing personal content to their Instagram feeds, but certainly not shy away from the channel,” he said. Wellen noted Instagram is also far less political than Facebook and more of a design-focused, visually led medium. “Many users who are skeptical about how their Facebook data is collected to influence voting opinion typically would never share any political-themed content on Instagram,” he added. “This division of channel roles and differentiation from Facebook could preserve a favorable view of Instagram among social communities.” Katy Lucey, team lead of paid social at digital marketing agency Elite SEM, said that at least for now, advertising won’t be affected on either Facebook or Instagram. “Facebook and Instagram are basically one and the same from an advertising perspective, since Instagram ads are run out of the Facebook platform,” she added. “They do use the same targeting, so whenever Facebook figures out their ‘data problem’ and what it means for their advertising product, it could have an effect on Instagram. But that probably won’t happen any time soon.” That said, one consequence may be that Facebook will pull back third-party data access; that would potentially impact Instagram as well since it uses Facebook data for advertising, Lucey said. Justin Choi, CEO of native advertising platform Nativo said bigger changes could be afoot for both platforms. “As things continue to pile up against Facebook, legislators are waking up to the fact that its free pass leaves Americans’ private data vulnerable,” Choi said. “I expect to see increased proposals for government oversight and louder calls for breaking up the social media behemoth resulting in a separate Instagram. It happened to Bill Gates. The same could happen to Mark Zuckerberg.” Another consequence? Any long-term backlash could benefit the new digital advertising contender that is Amazon, according to Nathan Grimm, director of marketing at Amazon-focused agency Indigitous. That's once the online giant overcomes some inefficiencies, like a smaller number of advertisers and difficulty in setting up accounts, as business must already be on Amazon to advertise. “So this episode may increase the inbound inquiries for advertising accounts or improve their sales teams' conversion rates, but there are enough barriers that Amazon can't capture a significant percentage of the market during one news cycle,” Grimm said. “Of course, if these tailwinds persist and Facebook becomes a toxic advertising partner, then Amazon's long-term growth in the advertising market will benefit greatly.”