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Unpacking the Impact of the Facebook Advertising Boycott by Canada’s "Big Five" Banks

August 2, 2020
Charlie Grinnell
in
Case Studies 💡

The advertising boycott made headlines in various industries around the world, but how did these financial giants adjust their marketing mix?

At the beginning of July 2020, the “Big Five” Canadian banks (TD, RBC, CIBC, BMO & Scotiabank) announced that they would be joining hundreds of other companies around the world in boycotting the use of Facebook advertising.

Over 100 articles were published about the banks and their boycott, with the majority at the beginning of July. The articles gained a collective of 35K engagements, with 87% of Facebook reactions being positive.

The “Big Five” banks kept their word, as their collective Facebook advertising spend in July 2020 decreased by -100% month over month.

The boycott accelerated a trend of declining Facebook advertising spend amongst the “Big Five”, which began after a peak in April 2020. Facebook advertising spend declined an average of -35% a month from May to June 2020.

As a result of the decrease in Facebook spend, the “Big Five” shifted their focus to Desktop Video & Desktop Display advertising, which increased month over month in July 2020 by +1037% and +104%, respectively.

From January to the end of June 2020, Facebook accounted for an average of 68% of the “Big Five’s” advertising spend. This shifted dramatically in July, with Desktop Video making up 72% and Desktop Display making up 23% of advertising spend.

Overall advertising spend for the “Big Five” banks only decreased by -5% from June to July, which suggests that the banks did not reduce their overall spend as a result of the Facebook boycott, but rather shifted it to other platforms.

This shift was away from Facebook and towards YouTube, which accounted for 73% of all advertising spend by the “Big Five” in July.

The trend continued in Desktop Video advertising, where YouTube accounted for 99% of advertising spend in July 2020.

TD accounted for 81% of the July 2020 YouTube spend by the “Big Five” YouTube spend, while RBC was the only brand that focused on other desktop video providers.

For Desktop Display, YouTube only accounted for 6% of July 2020 spend as advertising spend was more evenly spread between websites.

While the overall advertising spend did not shift much from June to July, the total number of impressions did – dropping -76% month-over-month in July.

This may be due to the fact that the average CPM for the “Big Five” on Facebook since January has been $3.83. Which is 6x smaller than the average CPM on YouTube of $24.03. Hence, advertising dollars go further on Facebook for the “Big Five” in terms of impressions.

Traffic from social media in July to the “Big Five” websites were unaffected by the boycott and actually grew by +1% month-over-month.

On average, YouTube has made up 44% of the “Big Five’s” combined social media traffic since January, while Facebook has made up 33% on average. Both platforms did not see a significant change in the amount of social media traffic driven to the “Big Five’s” websites in July, despite the shift in advertising spend.

Search interest for the keyword “Facebook boycott” in Canada peaked at the beginning of July 2020 (around the same time as the announcements) and has since fallen as other topics of interest have cropped up.

Key Findings

The Big Five banks switched their focus from Facebook to Desktop Videos (YouTube) during the Facebook boycott: Overall advertising spend remained consistent, with only a 5% decrease month-over-month.

The total number of impressions for the Big Five’s advertisements in July declined significantly: The average CPM for the Big Five’s ads on Facebook is 6x smaller than their average CPM on YouTube. This suggests that the advertising budget goes farther on Facebook then YouTube, which may be why impressions were down in July despite no significant reduction in ad spend.

What Brands Should Be Thinking About

Continue monitoring which competitors are participating in the FB boycott throughout August: While some competitors such as TD have already turned on their FB ad campaigns in August, overall FB budgets may be significantly lower compared to the months before the boycott. Keep in mind that competition on YouTube has heightened due to major shifts in budget.

Review ad CPMs on major platforms to ensure goals are being met and ads optimized: A high CPM can increase the cost per click, the cost per lead, and the cost per acquisition. It is preferable to review ad CPMs on a regular basis to ensure that goals (such as brand awareness or lead generation) are being met and advertising budget is not being wasted.

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Charlie Grinnell

Charlie is the CEO at RightMetric. You can connect with him on Linkedin.

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