Boycotts of Facebook ads have hit the big time. Now what?

Carolyn Everson, vice president of global marketing solutions at Facebook Inc.

Andrew Harrer | Bloomberg | Getty Images

A steady stream of businesses have supported the “#StopHateForProfit” campaign, promising to halt ad spending on Facebook encourage the company to step up its efforts against hate speech and disinformation.

With big advertisers like Verizon join the campaign on Thursday and Unilever, Coca Cola and Honda saying they would withdraw the ad, Facebook is now facing a snowballing effect of advertisers abandoning the site. Starbucks and the giant of spirits Diageo joined the campaign this weekend.

But when it comes to Facebook’s 8 million advertisers, that can be a really big snowball.

Facebook has indicated that it intends to do things on its own terms. In a 1,600-word note to advertisers from CNBC, the company’s vice president of global business solutions, Carolyn Everson, said “boycott in general is not the way for us to move forward together.” .

“I also really hope you now know that we are not making any policy changes related to the pressure on revenues,” Everson said in the note. “We set our policies on the basis of principle rather than commercial interests.”

Facebook’s stock closed more than 8% lower on Friday.

In the week since a group of organizations used Facebook advertisers to halt their ad spending during the month of July, more than 100 marketers, including Patagonia, REI, Lending Club and The North Face, have announced their intention to join, according to a shopping list of Sleeping Giants. The organizations said they were calling on Facebook to more rigorously control hate speech and disinformation by take a number of actions, including creating a “separate moderation pipeline” for users who say they have been targeted because of their race or religion, or to allow advertisers to see how often their ads have appeared near content which were then removed due to misinformation or hate, and allow them reimbursement for those advertisements.

Last year, Facebook generated $ 69.7 billion in advertising revenue globally from its millions of advertisers. And while some of them have much larger Facebook budgets than others, it would take a large group to hold back spending to make a big financial dent. But the financial impact is not the end goal, Sleeping Giants said in a tweet Friday: “… This is a broader calculation around the platform’s lack of moderation when it comes to hate and misinformation. Advertisers don’t want to sponsor violent and fanatical content. or lies. ”


Facebook CEO Mark Zuckerberg spoke in a livestream on Friday, announcing that the company will change its policies to ban hate speech in its advertisements, but he did not directly refer to boycotts.

But Color for Change chairman Rashad Robinson said in a tweet that the address was a “failure to tackle the damage FB has done to our democracy and civil rights.”

“If this is the response he gives to major advertisers who are taking millions of dollars out of the business, we can’t trust his leadership,” the tweet continued.

Where things could go from here

In a Bank of America Note Friday (ahead of Unilever’s announcement), analysts noted that Verizon had the potential to influence other advertisers by joining the boycott. Analysts said channel checks suggest the impact of boycotts “may not be significant” since Facebook has so many advertisers in its auctions, but if “key influencers” in other major industries also choose to join, there is a risk of “short term”. snowball effect. ”This certainly seems to be the case with Unilever, a large advertiser.

Nonetheless, Bank of America analysts said they expected tighter restrictions on hate speech “in response to a changing society” and possibly new policies on fact-checking content.

Bernstein analysts said in a note following Unilever’s announcement that this was different from the 2018 “#deletefacebook” campaign after the Cambridge Analytica scandal.

“The current environment is very different,” they wrote. “It is very visible who participates and does not participate in the boycott where silence marks [equals] complicity.”

Analysts also said they expected other brands to boycott both Facebook and Twitter platforms and extend the boycott window beyond July, and said Google could also find itself included in the boycotts. (This estimate turned out to be prescient; Coca Cola said on Friday night he would pause the ad on all social networks around the world.)

“Other brands will follow, and if nothing changes, how can a brand simply reactivate its ad spend in August? ” they said. “That would be misleading. That said, there is also a long school of advertisers who would gladly accept the cheapest ad inventory as it becomes available.”

The shakeout could also be a boon for other players. “While many brands were planning to cut spending anyway given the current macro, some of the dollars allocated by Facebook could end up on Snapchat, Pinterest, Amazon, Walmart, etc.

They wrote that Zuckerberg has been firm in his position on what he thinks is right, but if enough brands participate he may start to question that position (or could stand firm, and advertisers might still feel the need). come back if they start missing their own income goals).

Advertisers respond

Many advertisers are unhappy with Facebook’s response to the industry so far.

Goodby, Silverstein & Partners, a major advertising agency that is part of Omnicom Group, said earlier this week that he was joining the campaign and pledging not to post on his Facebook page, which he uses to promote his work, talk about his people and his clients.


“I’m one of those who feels that trust has been broken,” co-chair and partner Jeff Goodby told CNBC in an interview Thursday, ahead of the Verizon and Unilever announcements. “I’m not sure what they will do, to tell you the truth. I am optimistic that they will listen and do something, but experience has shown otherwise.”

“As an industry, we talk to them about it all the time,” he said. “You can’t ask advertisers to invest in this thing with content coming in from all over the place without having the assurance that it’s going to be safe for us. There’s no guarantee. Facebook doesn’t even care. its own rules of the road. ”

Goodby said he expects the movement to grow. He said to his knowledge that none of the agency’s clients joined on Thursday morning, but said the agency’s intention was to informally show them that it was joining the campaign and that “it would be great if they joined us”.

“I’ve heard hints from bigger brands that they’re thinking about it as well,” he said. “I wouldn’t be surprised to see it get bigger.”

For now, the industry is waiting.

“I am waiting to see who will join us,” he said. “I feel like I’m at the end of the diving board and I’m looking back to see if anyone is climbing the ladder.”

Barry Lowenthal, CEO of The Media Kitchen, said that although Facebook promised significant investments, the problems continued.

“It looks like nothing is changing,” he said. “Misinformation and harmful content is spreading on Facebook and the division in this country continues to increase… just giving me a 15 point plan, when it looks like things really haven’t changed it really doesn’t work . ”

Lowenthal also said taking a hiatus in July is a different action than in the fourth quarter, when brands are trying to boost holiday sales. And he wonders why, if advertisers are so eager to leave, they’ll be back soon after.

“If it’s bad enough for you to leave in July, how do you justify going back?” ” he said.

He said a more meaningful decision might be to find alternative channels to shift spending.

David Jones, the founder of You & Mr. Jones and a founding member of the Facebook Client Council who served on the board for four years, said he doesn’t think Facebook is ignoring advertisers.

“I don’t think there is any danger in [that they’re] ignore it and don’t take it seriously, but are they really acting on it, and how big is that action? “he said.” There is a lot you can do to help solve this problem. They cost money. ”

He said the company has a comprehensive plan to respond to criticism or risk losing relevance.

“None of the big tech platforms could be the big tech platforms a decade later,” he said.

– CNBC’s Julia Boorstin and Michael Bloom contributed to this report.

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