• Latest
  • Trending
One way investors should value the Facebook scandal damage

One way investors should value the Facebook scandal damage

April 6, 2018
4 dead, 52 arrested after Donald Trump supporters storm US Capitol

4 dead, 52 arrested after Donald Trump supporters storm US Capitol

January 7, 2021

China criticizes US order against dealing with Chinese apps

January 6, 2021

US has dual policy on Afghan peace process: MPs

January 5, 2021
‘Good riddance,’ says China snub Germany leaving UN Security Council

‘Good riddance,’ says China snub Germany leaving UN Security Council

December 25, 2020
Sharon Osbourne reveals she tested positive for COVID-19

Sharon Osbourne reveals she tested positive for COVID-19

December 15, 2020
Apple Adding Privacy Fact Labels to App Store Items

Apple Adding Privacy Fact Labels to App Store Items

December 15, 2020
More Republicans finally accept Biden win after U.S. Electoral College certifies vote

More Republicans finally accept Biden win after U.S. Electoral College certifies vote

December 15, 2020
Rhode Island casts 4 Electoral College votes for Biden

Rhode Island casts 4 Electoral College votes for Biden

December 15, 2020
Rhode Island School To Stagger Return After Holiday Break

Rhode Island School To Stagger Return After Holiday Break

December 15, 2020
Twitter, Facebook face labeling test on Trump’s election posts

Twitter, Facebook face labeling test on Trump’s election posts

November 4, 2020
Democratic hopes to flip US Senate dim as red wall holds for now

Democratic hopes to flip US Senate dim as red wall holds for now

November 4, 2020
US election: What happens next?

US election: What happens next?

November 4, 2020
Sunday, January 24, 2021
No Result
View All Result
  • Region
    • Delaware
    • Maine
    • Massachusetts
    • New Hampshire
    • New Jersey
    • New York
    • Pennsylvania
    • Rhode Island
    • Vermont
  • U.S. News
  • National Security
    • Defense
    • Politics
    • Terrorism
  • World News
    • Africa
    • Asia
      • Australia & New Zealand
      • China
      • India
      • Japan
      • North & South Korea
    • Canada
    • Europe
      • Germany
      • Russian Federation
    • Latin America
      • Mexico
    • Middle East
    • United Kingdom
  • Economy
    • Business
    • Science
  • Sports
    • Auto Racing
    • Cycling
    • Golf
    • MLB
      • Boston Red Sox
      • New York Mets
    • NBA
      • Boston Celtics
      • Brooklyn Nets
    • NFL
      • New England Patriots
      • Philadelphia Eagles
      • New York Giants
      • New York Jets
    • NHL
      • Boston Bruins
      • Buffalo Sabres
      • New Jersey Devils
      • New York Islanders
      • New York Rangers
      • Philadelphia Flyers
      • Pittsburgh Penguins
    • Soccer
    • Tennis
    • Water Sports
  • Culture
    • Art
    • Books & Literature
    • Fashion
    • Health
    • History
    • Lifestyle & Family
    • Music
    • Religion
    • Television & Movies
    • Theatre
    • Travel
      • Great Outdoors
      • Rhode Island Travel
    • Women
  • Environment
    • Climate Change
    • Green News
    • Greenpeace
    • Oceans & Marinelife
    • Wildlife
  • Region
    • Delaware
    • Maine
    • Massachusetts
    • New Hampshire
    • New Jersey
    • New York
    • Pennsylvania
    • Rhode Island
    • Vermont
  • U.S. News
  • National Security
    • Defense
    • Politics
    • Terrorism
  • World News
    • Africa
    • Asia
      • Australia & New Zealand
      • China
      • India
      • Japan
      • North & South Korea
    • Canada
    • Europe
      • Germany
      • Russian Federation
    • Latin America
      • Mexico
    • Middle East
    • United Kingdom
  • Economy
    • Business
    • Science
  • Sports
    • Auto Racing
    • Cycling
    • Golf
    • MLB
      • Boston Red Sox
      • New York Mets
    • NBA
      • Boston Celtics
      • Brooklyn Nets
    • NFL
      • New England Patriots
      • Philadelphia Eagles
      • New York Giants
      • New York Jets
    • NHL
      • Boston Bruins
      • Buffalo Sabres
      • New Jersey Devils
      • New York Islanders
      • New York Rangers
      • Philadelphia Flyers
      • Pittsburgh Penguins
    • Soccer
    • Tennis
    • Water Sports
  • Culture
    • Art
    • Books & Literature
    • Fashion
    • Health
    • History
    • Lifestyle & Family
    • Music
    • Religion
    • Television & Movies
    • Theatre
    • Travel
      • Great Outdoors
      • Rhode Island Travel
    • Women
  • Environment
    • Climate Change
    • Green News
    • Greenpeace
    • Oceans & Marinelife
    • Wildlife
No Result
View All Result
No Result
View All Result

One way investors should value the Facebook scandal damage

April 6, 2018
in Culture, Featured, Technology
0
Home Culture
Post Views: 210

 

The sound of a televised golf tournament travels from another room. It’s a late Sunday afternoon in spring, and habits in this house never change. I just heard fragments of a BMW ad, which is no surprise. Targeting is the essence and value of advertising, and golf tournaments deliver a well-defined audience of mostly upscale, male and middle-aged viewers.

Nielsen has been in the business of measuring and identifying TV and radio audiences for nearly 100 years. Beer ads during football games, Transformers ads across Nickelodeon, and Advil ads during 60 Minutes all result from advertisers digging through and analyzing audience data for those programs.

But this practice, also known as data mining, has taken on nefarious tones.

RelatedPosts

China criticizes US order against dealing with Chinese apps

Twitter, Facebook face labeling test on Trump’s election posts

Trump says deadline for TikTok sale won’t be extended

Microsoft warns: Russia, China hackers targeting US vote

Zuckerberg Says Conservatives Don’t Rule Facebook. Data Says He’s Wrong

The current controversy about what Facebook does with its users’ information has obviously rattled many people, including investors. On Wednesday, the social media giant raised the estimate for the number of users whose information was improperly shared with a consulting firm tied to the Trump presidential campaign, to 87 million from the previously estimated 50 million.

Shares of Facebook are up 2.6 percent on Thursday but have taken a beating from the latest news. They are now down about 17 percent from the Feb. 1 peak, meaning that the company has lost over $100 billion of market value, nearly three times its annual sales last year. If the stock decline reflects the number of people fleeing the platform, that would imply a loss of 340 million of its 2 billion users, which seems extreme.

The instant way advertisers can reach users seems to be one weak point. Consider how the pathway from ad to purchase varies across media.

In one scenario, Trip Advisor advertises during the TV broadcast of an NCAA basketball tournament game hoping at least some viewers will see the ad and decide to use the website to book travel, allowing the firm to collect a fee. There is a time lag and a few steps the consumer has to take between seeing the ad and using the website to complete the booking.

However, when I watch smart dog videos online (not at work!!) and click on the ad for the artisanal dog treat that has miraculously appeared in my Facebook feed, there is practically no lag time. It is an example of perfectly aimed and successful internet marketing.

In a recent interview, Barry Diller suggested that it is ironic that after reaching “the holy grail” of placing ads with “precise targeting,” the internet is now being widely criticized for this “momentous” achievement.

Diller may have missed one critical point. When we watch a Rolex ad on the Tennis Channel, we have no doubt that Rolex bought that spot for several reasons, including cost and the lack of incentive for an imposter to advertise there.

On Facebook, however, a targeted fake Rolex ad, which would be relatively low cost, might lead browsers to click through and buy a watch immediately without verifying the authenticity of the messenger. The targeting can be precise, but the source of the ad might be opaque.

We are learning that one of the most intractable problems with the digital platform model is that advertisers pay to make impressions on viewers but impersonators abound. Awareness of counterfeit ads or “fake news” is likely to lower user confidence in the origination of Facebook ads, potentially reducing the click-through rate, and prompting advertisers to demand discounted rates.

Ad revenue accounts for virtually all of Facebook’s $40.6 billion of sales in 2017. Media, entertainment, luxury goods and financial services are among the larger advertisers, and all of them could raise the issue of credibility erosion.

As investors, we worry about the amount of revenue Facebook could lose because of this spiral and the increased money it must spend to police and monitor its site. There is no question that the recent stock action in Facebook suggests tremendous fear about the scandal and its impact.

As The Economist points out, the median decline for a stock after a company crisis erupts is 30 percent, and we are 10 percentage points from that level.

But many pummeled stocks recover over the following six months after management moves to quickly address the cause. Equifax, another recent debacle, fell 35 percent in the week after the company announced a massive data breach last fall, but is up 26 percent since its nadir compared to 4 percent for the S&P.

At this point, we need to calmly analyze the information we have, the range of possible outcomes, the tax implications for selling Facebook shares now, and where we feel Facebook’s users, advertisers and investors may go instead. Meanwhile, I’m buying a couple chew toys for the puppy.

Source :
CNBC
Tags: damageFacebookinvestorsScandalTechnologyvalue
ShareTweetShare

Related Posts

4 dead, 52 arrested after Donald Trump supporters storm US Capitol
Featured

4 dead, 52 arrested after Donald Trump supporters storm US Capitol

January 7, 2021
Business

China criticizes US order against dealing with Chinese apps

January 6, 2021
Featured

US has dual policy on Afghan peace process: MPs

January 5, 2021
‘Good riddance,’ says China snub Germany leaving UN Security Council
Asia

‘Good riddance,’ says China snub Germany leaving UN Security Council

December 25, 2020
Sharon Osbourne reveals she tested positive for COVID-19
Culture

Sharon Osbourne reveals she tested positive for COVID-19

December 15, 2020
Next Post
Chinese state media claims victory in trade dispute so far, saying Beijing’s tariffs will hurt Trump voters

Chinese state media claims victory in trade dispute so far, saying Beijing's tariffs will hurt Trump voters

Translate

Popular Post

4 dead, 52 arrested after Donald Trump supporters storm US Capitol
Featured

4 dead, 52 arrested after Donald Trump supporters storm US Capitol

January 7, 2021
0

The chaotic and violent scene unfolded at the US Capitol as supporters of President Donald Trump swarmed the building to...

Read more
Mattis to Reassure Nervous Asian Allies

Mattis to Reassure Nervous Asian Allies

October 13, 2017
Asian Company Invest In America As Trump Takes Office

Asian Company Invest In America As Trump Takes Office

October 13, 2017
Trump lost: 9th Circuit Court declines restoring travel ban

Trump lost: 9th Circuit Court declines restoring travel ban

October 13, 2017
Central Intelligence: Gina Haspel new Deputy chief

Central Intelligence: Gina Haspel new Deputy chief

October 13, 2017
  • About Us
  • Creative Commons
  • Disclaimer
  • Privacy Policy
  • Terms & Conditions
  • Contact Us

Topics

Follow Us

About Us

Varnum Continental is part of Varnum Continental Media Group LLC, which daily news around the globe.

© 2011 Varnum Continental

No Result
View All Result
  • Region
    • Delaware
    • Maine
    • Massachusetts
    • New Hampshire
    • New Jersey
    • New York
    • Pennsylvania
    • Rhode Island
    • Vermont
  • U.S. News
  • National Security
    • Defense
    • Politics
    • Terrorism
  • World News
    • Africa
    • Asia
      • Australia & New Zealand
      • China
      • India
      • Japan
      • North & South Korea
    • Canada
    • Europe
      • Germany
      • Russian Federation
    • Latin America
      • Mexico
    • Middle East
    • United Kingdom
  • Economy
    • Business
    • Science
  • Sports
    • Auto Racing
    • Cycling
    • Golf
    • MLB
      • Boston Red Sox
      • New York Mets
    • NBA
      • Boston Celtics
      • Brooklyn Nets
    • NFL
      • New England Patriots
      • Philadelphia Eagles
      • New York Giants
      • New York Jets
    • NHL
      • Boston Bruins
      • Buffalo Sabres
      • New Jersey Devils
      • New York Islanders
      • New York Rangers
      • Philadelphia Flyers
      • Pittsburgh Penguins
    • Soccer
    • Tennis
    • Water Sports
  • Culture
    • Art
    • Books & Literature
    • Fashion
    • Health
    • History
    • Lifestyle & Family
    • Music
    • Religion
    • Television & Movies
    • Theatre
    • Travel
      • Great Outdoors
      • Rhode Island Travel
    • Women
  • Environment
    • Climate Change
    • Green News
    • Greenpeace
    • Oceans & Marinelife
    • Wildlife

© 2011 Varnum Continental