Facebook’s Recent Troubles Extend to Sports-Ticketing Market
Today’s guest columnist is Jesse Lawrence, the founder of TicketIQ and FanIQ.
With all five major sports in action this week, there is comfort in the return to a familiar and full event calendar. However, like so many other aspects of a COVID world, the new “normal” in ticketing will take some getting used to. When it comes to selling directly to fans, peak ticket season in 2021 comes with one major change, and one accentuated by this week’s Facebook outage—what to do about the world’s largest social network.
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For years, Facebook was the biggest, and often only, social network that ticket sellers used to find new fans and re-engage past buyers. Sunday’s 60 Minutes interview with a former Facebook employee and source for The Wall Street Journal’s “Facebook Files” series has accelerated the company’s public reckoning. For the ticketing business, the reckoning actually began five months earlier, when Apple released its privacy-focused iOS 14.5. According to some reports, when prompted, as many as 80% of users chose not to have Facebook track their activity in the app. While privacy advocates are thrilled that Facebook knows less about you, for ticket marketers emerging from the pandemic winter, it was a rude awakening.
During the pandemic, my company rebranded our B2B ticket marketing platform from TicketIQ to FanIQ (we still operate TicketIQ.com as a no-fee marketplace to build first-party data). In addition to the name change, we used the pandemic to refocus our mission around providing tools and tracking for ticket sellers looking to move beyond Facebook. It was a prescient and lucky decision. Since April, the cost of user acquisition in Facebook across roughly 30 clients has increased by 5x-10x.
In a September blog post, Facebook acknowledged problems. “The cost of achieving your business outcome may have increased and it’s also gotten harder to measure your campaigns on our platform,” the company’s VP of product marketing wrote, adding, “We’re optimistic about our multi-year effort to develop new privacy-enhancing technologies that minimize the amount of personal information we process, while still allowing us to show personalized ads and measure their effectiveness.”
While there are ways to make Facebook work, it’s a shadow of its former self, when teams routinely generated 15x returns on ad spend. A select few teams and promoters have the ability to test and learn their way back to positive returns, but for most it’s beyond the scope of their current, and limited, resources. Add to that the gap in group sales caused by the pandemic, plus the tight labor market for entry-level sales reps, and many sports teams have hit the panic button.
Prior to iOS 14.5, we spent 80% of ad dollars in Facebook and Instagram. In the last quarter, FanIQ has spent 80% of our ad dollars outside of Facebook and Instagram. Because our business model involves shared risk and upside, we’ve got no choice but to focus on the most efficient platforms. For now, Facebook is playing only a supporting role, and major ticketing platforms are not doing much to help their clients navigate the new reality. Last month, one FanIQ college football client was told by its ticketing platform that Facebook tracking and attribution was “literally broken.”
While that’s not exactly a true big-picture statement, for six hours this Monday, it was reality. That’s when Facebook went down for its 2.9 billion global users. For the ticketing business, the bigger news may have broken 24 hours before the outage, in a New York Times article detailing a future of social commerce led by TikTok’s viral hit-making machine. While most of the article’s success stories are for Shopify-powered ephemera, like star projectors, kitchen shears and LED light strips, it also notes that videos with #TikTokMadeMeBuy now have more than 4.6 billion views.
Along with the platform’s viral momentum, the company also recently announced TikTok shopping, a suite of tools to help accelerate commerce. As part of the launch, the company cited a report claiming that compared with competitors, TikTok users are 1.7 times more likely to have purchased products through the app. Last month, the active TikTok user base crossed 1 billion per month.
At FanIQ, while most of our TikTok efforts have been for music festival clients, we’re about to launch our first sports client, a minor league hockey team in Texas with a history of colorful promotional efforts: the Allen Americans. Last season, the team rebranded itself for several games in partnership with Ghost Tequila, and then gave away free shots to all fans over 21. While the team’s TikTok page is still a work in progress, to start the season, the Americans will lean on their mascot, Biscuit the Bulldog. With 42,000 followers, Biscuit stars in slapstick bits that drive an average of 20,000 views per post. My favorite one involves the kiss cam and Biscuit dumping popcorn on one deserving fan. That post drove 5 million views. For a team that plays in front of a maximum capacity of just over 5,000, those are numbers worth taking very seriously, regardless of what’s happening on Facebook.
In addition to TicketIQ, a leading ticket search engine, Lawrence founded FanIQ, a data-driven ticket marketing platform for sports teams, venues, festivals and other live-event promoters. You can find him on Twitter here.
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