Facebook's New Challenge

Sheryl Sandberg decided to leave Facebook during one of the most transformative moments in the mobile adtech ecosystem. It’s impossible to know why she left, but I’d imagine that tackling the impending challenges didn’t go unnoticed in her calculations.

The challenge placed in front of Facebook is something the company never faced before. A lot of the underlying protocols driving the internet and mobile is undergoing its own type of “rug pull”. The platforms controlling browser and mobile OS information are creating new privacy frameworks that help users control which apps are able to receive cookies and advertising ids. In some cases they are banning them outright. It’s inconclusive if these changes help the user, but philosophy aside, the change is happening.

Facebook’s unfair advantage was in its efficient ability to give purchasing intent to advertisers. By joining user profiles with cookies, Facebook had a veritable moat in its ability to sell products to people. Now that a lot of this infra is stripped away, Facebook competes on foreign and uncontrolled territory, and every optimization algorithm built over the last decade will get reinvented with new thinking required to drive decision making.

We’ve seen some attempts to adapt, like mapping ATT Conversion Values to specific in app events, but little to no evidence supports the idea that Facebook still has its advantage. In fact, a lot of budgets have shifted away from iOS advertising on Facebook.

No doubt Sandberg has the ability to guide the company through this change, but the energy it takes to fly the plane through the coming storm is too tiring given her ability to work on so many different things outside of ads. It’ll be interesting to see how Facebook’s new management is able to brace for the storm and find ways to get through its next set of challenges and it’ll have to do that without the old guard.

Above the clouds, I think Facebook realizes how their applications merely sit on top infrastructure they don’t fully control: the internet’s established hardware and protocols. Full autonomy is impossible in this environment and it’s likely why Zuck is so bullish on VR – hardware his company fully controls.

As for Sandberg, she should probably step away from work, take some well deserved rest, and spend time with family. IMO she was one of the key factors to Facebook’s success, but the next challenge probably requires a fresh set of eyes.