The Real Reason Advertising Execs are Trashing Facebook

Last week I watched the gripping new film, Free Solo, which documents climber Alex Honnold’s rope-less ascent of El Capitan, a 3,000-foot wall of slippery rock in Yosemite National Park.

Braced only by his fingers and toes, like Spiderman without the webs, Honnold somehow propels himself up this sheer granite face for four harrowing hours, thirty football fields above the ground below. He does it all with no safety device or margin for error. One small slip and he would plummet to his death.

As I witnessed this feat–one of the most spectacular mental and physical triumphs in human history–an unexpected thought popped into my brain: I hope he falls.

"I hope he falls."

Surprised at its extreme nature, I examined my thinking. It’s not that I wanted Honnold to die. After all, I’m not a fan of snuff films, and I harbored no ill will toward him.

At first, I believed the wish came from my paralyzing fear of heights, which the film’s harrowing scenes provoked. But after further contemplation, I concluded it was envy, rooted in a very rigid sense of right and wrong. For whatever reason–perhaps due to twelve years of Catholic school–I cling tightly to a set of inalienable behavioral guidelines: Park within the lines. Wait your turn. And, most importantly, Play by the rules.

Alex Honnold doesn’t play by the rules. He flouts the laws of, if not precisely gravity, then certainly those of common sense. Somehow, his insistence to obliterate the line between possible and impossible threatened my fragile ego, which wished failure upon him.

In the same way that Honnold provoked my contempt, so Mark Zuckerberg’s re-ordering of the media universe has earned him the scorn of top ad agency executives. This has been long in coming because many in the media world are desperate to see the social media giant plummet from its lofty heights.

Following a New York Times report on how Facebook handled the fallout from the Russian election scandal, Rishad Tobaccowala, the well-respected chief growth officer at Publicis vented that the company’s leaders, “have absolutely no morals.” Creative agency R/GA posted the original article on Twitter with the comment, “It’s time to admit we were all wrong about Facebook. It’s actually worse.”

Then last week, The Economist quoted two anonymous advertising executives. One offered that Facebook—where I worked on the sales team for over four years—is “grossly mismanaged." The other compared the company to “Yahoo, pre-Marissa Mayer." This was not a compliment.

Be assured that these comments reflect more than moral outrage or even schadenfreude, but the scorn the vanquished heap upon an occupying force. The truth is that—in building Facebook—Mark Zuckerberg ripped away the terra firma under ad agencies, which are now doing anything they can to regain their leverage.

These comments reflect more than moral outrage or even schadenfreude, but the scorn the vanquished heap upon an occupying force.

Don Draper and his immediate descendants enjoyed advertising’s golden days. Creative agencies made millions producing thirty second television commercials in exotic locations. Media agencies earned hefty commissions running those spots across just three TV networks. It was not so much work for quite a bit of money.

Things got more complicated with the proliferation of cable channels, then really complex with the arrival of internet sites and search engines. Not only did agencies have to decide how and where to allocate dollars among these myriad outlets, they had to develop unique creative units to fit each one, with only modest increases to their compensation.

Still, if an ad-supported property wanted access to those marketers’ funds, they had to grovel for the agencies’ favor. So grovel we did. Print publishers, television networks and internet brands paid homage to these intermediaries, wooing them with golf trips, wine-soaked dinners, concerts, playoff games – anything to win their time and ears.

It was a fun way to make a living, by the way, and I made dozens of good friends on the agency side of the business. But suffice to say they were very used to getting what they wanted, and bent revenue-hungry properties to their will. Sites like Yahoo! and Myspace became victims of their own success, plastering their pages with ads designed to interrupt the user while she was checking her stocks, reading the news or emailing her friends. 

Then along came Mark Zuckerberg.

Agencies asked for disruptive homepage takeovers. Zuck said no. They asked for targeting capabilities that might compromise user data. Zuck said no. They asked for names, emails and zip codes of their Facebook fans. Zuck said no.

He turned down hundreds of millions in their short-term cash and wouldn’t take his place in the existing hierarchy of the ads business: Marketers on top, publishers on the bottom, and the agencies in between, playing the role of well-paid gatekeeper. Zuck wouldn’t kiss their ring. Hell, he wouldn’t even meet with them. This really pissed them off.

Zuck didn’t play by the rules, and as the platform he conceived ascended ever higher, so grew the resentment of those threatened by his success. That continues today when the agency business is more challenging than ever, thanks to Facebook and Google.

In 2017, the digital ad market grew to $88 billion, with Facebook and Google accounting for 90% of that growth. This market concentration might not be a big deal except that these two giant ad platforms circumvent the agencies. In the good old days, a seller and a buyer may have negotiated a $100,000 media contract over a long lunch. Today’s buyer can purchase tens of millions of dollars in ads with a few keystrokes.

Analyzing the stock woes of global agency holding firm, WPP, earlier this year, Ad Age cited Google and Facebook for “cutting out advertising agencies that act as the middlemen.” This automation allows marketers to buy the media themselves, and opens the door for competitors, like consulting firms, to serve advertisers’ needs. Perhaps that’s why net agency hiring fell last year for the first time since 2009, according to the Bureau of Labor Statistics. 

This isn’t the first time Facebook’s customers have used the press to unleash their frustration. In 2012, the company’s relationships with General Motors eroded to the point that the auto manufacturer told the Wall Street Journal they were canceling their ad deal just days before Facebook’s IPO. The timing appeared so vindictive that Business Insider concluded GM’s Chief Marketing Officer was “out for blood.”

I am not excusing what Facebook did or didn’t do to fight off Russian trolls and to manage the resulting public relations shit storm. I believe they are trying their best to manage legitimate, competing priorities in what can be a no-win situation.

What’s clear is that Facebook has permanently changed the way marketers connect with consumers. In so doing, Zuck left many in the advertising world looking up from the valley floor, begrudging his success, and rooting for a spill.

Facebook has slipped, and the haters are crowing. While these critics have some legitimate points, a large part of the media community’s motivation is an attempt to restore the order that Facebook upset.

Dressed up as morality, their outrage finds its roots in the same place I found mine, sitting on the couch in my pajamas, resenting Alex Honnold for leaving me behind in the dust.

Paul Ollinger is Facebook's former VP, West Coast Sales. He owns Facebook stock.