The Q&A:

Here's a lightly edited conversation Mi3 had with Mat Baxter on his rationale for a Facebook boycott and what happened next. Plus we get a steer on whether he thinks there's a terminal threat to the current media agency model. And what marketer trust has to do with it.     

Mi3: Few have gone where you have publicly regarding Facebook. What prompted your comments and why the silence from the industry at large on Facebook’s ongoing crises?

Baxter: I felt it was the appropriate time to try and start a more serious discussion within the industry about Facebook. Our clients entrust them with vast amounts of data and they must be as accountable as any other media owner within the marketing supply chain. Ultimately, agencies are paid to represent their clients' interests and advocate for better transparency, standards and accountability from publishers. Facebook is no exception.   
It's really not surprising our industry is suffering a growing lack of trust from clients. You rarely ever hear an agency speak out publicly against the media, and that contributes to the perception that agencies are in their back pocket, doing their bidding. I want Initiative to stimulate tough conversations that everyone claims in private to be having, but never has the backbone to raise in public. 

Mi3: A lot has happened since you made those comments - governments around the world have come out strongly on the need to regulate platforms to ensure their content and privacy is better managed. Did the industry miss a trick not getting on the front foot before the regulators?

Baxter: Yes, I certainly think the industry was too slow to act. Unfortunately, a lot of the concerns that were voiced in private by people in our industry weren’t expressed more publicly and we never gained the momentum necessary for serious action. It’s a missed opportunity and now, as a result, we have governments stepping in to do the job we should have done in the first place. 

Mi3: Some of your industry peers on the golf courses and at those lunches you speak of say Facebook is the "new tobacco". Too harsh?  

Baxter: Perhaps a little. However, I believe that in years to come society will reflect on many of the negative impacts of social media on mental health. I think that's particularly the case for young people - I fear we might be cheating a whole generation of young people from experiencing true happiness in their relentless and superficial pursuit of followers and likes.

Mi3: You must have spoken to Facebook? How did that go? 

Baxter: Yes, but I'll leave the contents of that conversation private. 

Mi3: Has Initiative or any of its clients acted on your call to boycott? Has anyone pulled or wound back?

Baxter: Yes. A few of our clients responded by throttling their incremental dollars on the platform and redirecting them to alternatives capable of reaching the same audiences. I had a lot of clients (both Initiative and non-Initiative) reach out to me following the post. The vast majority were positive. Most applauded us taking a stand and starting an important discussion about data security and privacy.

Mi3: Industry peers a little less supportive, it seems? 

Baxter: I think the industry was a little shocked I would take Facebook to task so publicly. But the reality is, I didn’t say anything others haven’t being saying privately in meetings, over lunches or on golf courses for months. 

Mi3: What does the next 12-24 months look like for data, privacy and advertisers? Politicians and regulators across Europe, UK, US, India, New Zealand and Australia have upped the pressure they're applying to big tech.

Baxter: Sadly I think the tech companies have taken a principally reactive stance to these issues. In other words they fix things after they become a problem. I'd like to see a far more proactive approach where all the players take meaningful preventative actions to avoid the problems arising in the first place. Of course, that requires a degree of diligence and investment that many just don’t seem to be willing to make. The reality is simple though. If they don’t, governments will force those steps upon them and I can guarantee you that complying with strict regulation will cost much more in the long run.  

Mi3: Sentiment is shifting markedly among regulators and policymakers - is the marketing sector at risk of being out of step?

Baxter: Yes. The ability to leverage data in marketing is a privilege regulators and policymakers have historically extended to our industry with minimal constraints. In most major markets, we are largely afforded the right of self-regulation. That privilege can be swiftly removed if we lose the trust of governments to police our collective actions. GDPR is a very good example of governments stepping up their oversight of our industry and I believe these sorts of corrective actions will continue if we don't adopt a more proactive approach ourselves. 

Mi3: So what's next on that front?

Baxter: I hope our industry can work together to develop more robust standards for data privacy and security. GDPR has had massive implications for advertisers and agencies, not just in Europe but around the world. There's a strong possibility that the U.S. and other governments around the world will follow suit if we don’t demonstrate the ability and commitment to better regulate ourselves.

Mi3: On that, does the threat of tougher government-imposed regulation require more restrictions around tracking and profiling individuals and therefore less detail around levels of targeting?

Baxter: It doesn't necessarily require greater restrictions on profiling or tracking. However, there needs to be more clarity on how data is secured and under what circumstances it can be shared. 

Mi3: If regulators did enforce tighter targeting and profiling rules, is the industry prepared for that? What are the implications for marketers? 

Baxter: It would have big implications in mature data markets like the U.S. I don't think the industry is prepared for significant changes to the rules. Even with ample warning, many brands and agencies scrambled to be compliant for GDPR. History would no doubt repeat itself in other comparably sized markets. 

Mi3: What might tougher tracking standards mean for the tech platforms already advanced in detailed profiling and targeting? 

Baxter: It would mean a lot of the functionality on existing platforms would need to be wound back or switched off altogether.

Mi3: Clearly there's a lot of debate about the future media agency model. Is there one? Are the challenges existential, structural or cyclical? 

Baxter: I think it's largely structural. If you look at the way a media agency operates today it's largely unchanged from 20 years ago. Sure there are new crafts like digital, content, data and analytics but the financial design of media agencies hasn't evolved. The secret to the long term success of the sector is finding a better and more sustainable remuneration mechanism. Only when our industry cracks a financial model that enables us to be truly profit neutral, so that we make the same amount of money regardless of the channel or solution we recommend, will we be free to give objective advice. And when you give truly objective advice you rebuild the single biggest thing that's been lost with clients: Trust.