What Backlash? Facebook Usage Jumped After Cambridge Analytica Scandal

Not unlike the stock itself, it looks like Facebook users “bought the dip” on using the social media platform after the Cambridge Analytica scandal: the backlash that we were warned about for Facebook as a result of this scandal never happened.

In fact, Facebook usage numbers were actually higher for April 2018 – the month that the scandal had the most impact and news coverage. 

As Business Insider reported, the movement for consumers to delete their Facebook accounts simply never took hold. Data provided by Goldman Sachs stated that Facebook‘s unique users on mobile devices were actually up 7% in April 2018, at the same time that the scandal was in its heyday.:

Facebook weathered the worst of the storm and usage actually increased, according to a client note from Goldman Sachs, citing ComScore figures. In other words, the #deleteFacebook backlash never really arrived.

Goldman Sachs said Facebook’s US unique users on mobile rose 7% year-on-year to 188.6 million in April, when the scandal was biting hard. Time spent on Facebook also went up. The graph below says it all.

As you can see above, the company actually wound up gaining usage according these newly released figures. This seems to prove that the cash generating social media giant made its way through “its biggest crisis” without even ruffling its feathers.

The company had announced also that it was purging more than 583 million fake accounts related to “Russian interference” recently, but Deutsche Bank noted that this purge also didn’t seem to have an effect on audience reach:

And there’s more good news for Facebook. Deutsche Bank said its advertising system checks had shown that the purge of 583 million fake accounts following Russian interference in the US election has had “little to no impact on audience reach.” It produced a graph revealing that ad targeting across all demos has actually grown.

“We note that this data represents audience reach across properties, not strictly tied to core Facebook, but we suspect they are cleaning up fake accounts across the board and view this as a broad indication that ad reach across Facebook continues to grow,” Deutsche Bank said.

As you may recall, after the Cambridge Analytical scandal broke, there was no shortage of analysts and pundits on television, including Tesla uber-bull Ross Gerber, who exclaimed on CNBC that “it’s all over”, “its going to be much worse than you’re seeing” and that Facebook “had allowed their platform to be a gutter for so many evil things”. 

“Trust me, this is just the tip of the iceberg here,” he told CNBC on the first day Facebook was down about 7%.  

Business Insider continued, echoing that “other research” showing trust in Facebook had been lost has ultimately been proven inaccurate, at least as it relates to both the stock and Facebook overall usage:

The findings, coupled with a full recovery in Facebook’s share price, completely undercut other research, which suggested that people’s trust in Facebook has nosedived since mid-March, when whistleblower Christopher Wylie first helped reveal that 87 million users had their data compromised by Cambridge Analytica.

As companies that generate $27 billion plus in operating cash per annum will tend to do, Facebook shelled out to launch a full court press PR campaign and went on the defensive, running apology videos on national television alongside of other disgraced companies, like Wells Fargo, doing the same. It worked. As a result, Facebook’s share price recovered in little time. Since then, the stock had dipped to near the $150 level but has promptly made its way back up to “pre-crisis levels” near $185 again, where it is today.

The Business Insider article notes that this should give Zuckerberg momentum during his upcoming testimony with EU lawmakers, which will take place next week:

The figures will give Facebook CEO Mark Zuckerberg confidence as he prepares for a crunch week, in which he will be grilled by top EU lawmakers. He will be questioned on privacy, fake news, and regulation by European Parliament’s political leaders.

But then Zuckerberg has already suggested that Facebook has seen little impact from Cambridge Analytica in terms of user engagement. He told Congress an immaterial number of users deleted their accounts as a result of the scandal.

We’re sure this “grilling” won’t have any tangible effect on Facebook going forward, similar to the way Zuckerberg’s testimony in the U.S. had no effect. There were some analysts who accurately prognosticated that his congressional testimony would do very little, as most congressional testimony tends to not produce any results and is simply a forum for political grandstanding.

In the meantime, Cambridge Analytica got the worst of the scandal – and recently filed for bankruptcy, as was reported 5 days ago by Bloomberg:

Cambridge Analytica, overwhelmed by a scandal over how it harvested data from Facebook to influence the last U.S. election, filed for bankruptcy in New York.

The U.K.-based political consulting firm, which had already said it would cease operations and wind down in its home country, listed liabilities of $1 million to $10 million. The Chapter 7 petition to liquidate U.S. affiliates — including SCL Elections Ltd., and SCL USA Inc. and SCL Social Ltd. — was signed by board members Rebekah Mercer and Jennifer Mercer, daughters of former New York hedge fund manager Robert Mercer whose family backed Donald Trump presidential campaign and helped reshape American conservative politics.


For the time being, Mark Zuckerberg looks to continue being “the golden child” – escaping what has arguably been his most prominent scandal to date with little to no repercussions. This should help keep his schedule wide open so that he can continue to prepare for his presidential bid.

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