These are momentous times for media, including Facebook - even if it refuses to accept that it is a media company, with all the responsibilities that involves.

The firm, which claims 2.2 million active daily users in New Zealand, is under pressure over its handling of fake news and minimising taxes, and has acknowledged errors in its claims about advertising reach.

One issue is the wave of demands that Facebook - like Google and other digital giants - pay their share of tax on ballooning advertising profits. The company paid just $43,000 tax in New Zealand last year.

As well, Facebook globally has acknowledged failings in its metrics, which over-estimated its uptake, including the viewing of video content.


Facebook has made changes, which have been welcomed, but the issue has prompted concern among advertisers and ad agencies. The concern is not that they have overpaid, but that media buying decisions were made on the basis of wrong information, and money might have been better spent elsewhere.

New Zealand advertisers are demanding changes to the way Facebook estimates its uptake.

The heat goes on

Those demands are part of a global advertiser pushback against the social media giant, says Lindsay Mouat, chief executive of the Association of New Zealand Advertisers (ANZA).

ANZA is working with its international body, the World Federation of Advertisers, and Mouat says there is "tremendous heat" on Facebook. He says the firm risks losing big advertisers if it does not improve evidence of its effectiveness, having announced errors.

"Each time it happens it really reduces confidence in Facebook," Mouat says. "There is a real question of credibility, given the number of errors that have been identified.

"They [Facebook] will argue that advertisers have not been penalised. What it has really meant is that people have been investing with a view to the platform being stronger than it really is.

"Just about all of these errors have been in Facebook's favour," he says.

"It goes back to the fact that their advertising is not measured independently, as it is with traditional media.


"It is coming down to the transparency and the credibility of the platform."

On a wider level, there is a move to pull back on digital spending. Mouat says the consumer goods giant Procter & Gamble has set the tone for many advertisers, who have decided they have over-invested in digital media.

"We are not getting the results and we have to reconsider our approach," he says.

Measure again

Facebook insists that it has corrected its metrics and will continue to ensure they are accurate.

At a New Zealand level, Facebook has a minimal relationship with advertisers, let alone media.

A consultant from Pursuit PR provided a bland notice supplied by head office: "Our goal going forward is to communicate more regularly about our metrics ... serving their customers - with the best insights possible." Despite several requests, Facebook declined to address questions about the local operation.

In a statement this month, the company said it was "exploring additional third-party reviews to validate the reporting we offer partners," and was addressing requests for independent measures of the time that ads are viewed on-screen.

Facebook said it was working with the Nielsen agency to include Facebook video viewership in Nielsen's digital ratings. "This will give publishers access to third-party verification for video metrics."

Companies such as Facebook and Google are overwhelming local publishers and have undermined the business plan for news.

Demanding change from Facebook is a bit like shaking your fist at an 18-wheel truck speeding through a school crossing.

Companies such as Facebook and Google are overwhelming local publishers and have undermined the business plan for news. They appear unbeatable.

Advertising industry commentator Martin Gillman says the level of dominance of Facebook is greater than even local media companies acknowledge. For that reason, he says, issues over Facebook's metrics are important.

Mouat says pushback against Facebook will be followed by advertisers demanding better information from Google, too.

DDB Group chief executive Justin Mowday stresses that Facebook campaigns can be highly effective.

A DDB campaign for the Westpac rescue helicopter was recently named in the "Mashies" awards as the best Facebook campaign in the world.

Agencies are aware of the issues, which developed because of the rapid growth of social media platforms, Mowday says, but he warns that at a branding level, Facebook's approach to tax risks alienating New Zealand users.

Kiwis on Facebook

Total daily active users: 2.2 million
Mobile daily active users: 2 million
Source: Facebook