The platform that refuses to die
Somewhere between the tenth thinkpiece declaring Facebook over and the hundredth marketing consultant pivoting to TikTok, a quiet fact got lost. Facebook in New Zealand is not shrinking. It is growing.
DataReportal’s Digital 2025 report recorded 3.40 million Facebook users in early 2025, up 100,000 from the previous year. That is 83.1% of all New Zealand adults aged 18 and over. Ad reach covers 65% of the total population. The IDNZ 2026 Digital Marketing Report puts daily usage at 58% of those users, averaging one hour and 24 minutes per day on the platform.
These are not the numbers of a dying channel. They are the numbers of a platform so embedded in daily life that writing it off amounts to ignoring the largest digital audience in the country.
The algorithm shift most businesses missed
The real story of the past year is not whether Facebook still works. It is that Facebook changed how it works, and most New Zealand businesses have not caught up.
Meta’s Andromeda algorithm update, rolled out globally in July 2025, was described by NZ digital agency Lucid Media as the biggest Facebook advertising change since iOS 14.5. Where iOS 14.5 broke tracking, Andromeda broke lazy creative. The algorithm now rewards ads that speak to specific customer situations rather than broad demographics. Businesses running 50 variations of the same generic ad saw performance collapse. Those building 15 to 20 genuinely different creatives addressing distinct customer pain points saw results improve dramatically.
The January 2026 benchmarks for NZ service businesses that adapted tell the story clearly. Average cost per lead dropped from $60-100 to $18-35. Consultation booking rates rose from 15-20% to 35-50%. Cost per qualified lead fell from $150-250 to $45-80. One documented case showed cost per lead dropping from $87 to $24 after restructuring creative around specific customer situations.
The key insight from Lucid Media: most NZ service businesses still have not adapted to Andromeda properly. That is not a warning. It is a competitive gap waiting to be exploited.
Quality over spend is the new rule
Andromeda actually favours smaller, smarter advertisers over big-budget operations running generic campaigns. A $100/day campaign with excellent creative diversity will outperform a $200/day campaign with generic ads. The recommended spend range for NZ service businesses sits at $75-150 per day, with anything below $50 failing to give the algorithm enough data to optimise.
For B2B specifically, Lucid Media notes that B2B campaigns took longest to recover but January 2026 performance now exceeds pre-Andromeda levels for accounts that adapted. The broader market context makes this more significant: New Zealand’s total digital advertising revenue hit $2.967 billion in 2025, up 12% year-on-year, with more than 70% of Kiwis shopping online every month.
The risks you cannot ignore
None of this means Facebook is a risk-free channel. Two problems deserve honest attention.
First, scam advertising is eroding trust. In April 2026, Westpac NZ chief executive Catherine McGrath publicly attacked Meta, stating that 64% of all scam cases handled by Westpac in 2026 originated on social media, up from 57% at the same point in 2025. McGrath herself was featured in a deepfake scam ad. Her assessment was blunt: Meta continues to make money from scam ads on its platforms and is “unwilling to do more than the bare minimum.” Legitimate advertisers share a platform with fraudsters, and that association carries a cost.
Second, account suspension remains arbitrary. Small businesses have reported losing access to their Facebook and Instagram accounts with limited recourse and no meaningful support from Meta. MBIE set up a dedicated inbox for affected businesses, underscoring how widespread the problem has become.
These are genuine risks. But they are arguments for diversification, not abandonment.
The smart play is adaptation, not retreat
The fashionable position in marketing circles is that Facebook is yesterday’s platform. The data says otherwise. An audience of 3.4 million New Zealanders, an algorithm that now rewards creative quality over spend volume, and cost-per-lead numbers that have improved by 60-70% for adapted businesses make a compelling case.
The SMEs that will struggle are those running the same tired ads they were running in 2024, or those who heard “Facebook is dead” and pulled their budgets entirely. The ones that will thrive are investing in genuinely diverse creative, spending enough to let the algorithm work, and maintaining alternative channels as insurance against platform risk.
Facebook is not dead. But the old way of advertising on it is. The businesses that understand the difference have a head start that widens every month their competitors keep listening to the wrong advice.
Sources
- Digital 2025: New Zealand — DataReportal (2025-01-01)
- NZ Digital Marketing Report 2026 | Key Stats | IDNZ (2026)
- Meta’s Andromeda Algorithm: The Biggest Facebook Advertising Change Since iOS 14.5 | Lucid Media (2026-01)
- Meta’s Andromeda Update: How Service-Based Businesses in NZ Can Fix Their Facebook Ads | Lucid Media (2026-01)
- Meta ‘missing in action’ over social media, deep fake scams – Westpac | 1News (2026-04-23)
- Business owner claims he lost money after Facebook and Instagram accounts banned | RNZ News