This week marks the second week of a boycott against Facebook’s advertising platform by over 100 advertisers worldwide, including well-known consumer brands such as Coca-Cola and Starbucks. As part of the Facebook boycott, marketers are expressing their unease with the platform policies on misinformation and hate speech. Namely, its permissive approach to problematic posts by President Trump.
A Brief History of the Facebook Boycott
On June 17, 2020, a coalition of civil rights groups launched a campaign asking businesses to “stop hate for profit” in solidarity with “American values of freedom, equality and justice”. The organizing groups include the Anti-Defamation League (ADL), the National Association for the Advancement of Colored People (NAACP) and Color of Change. As part of the protest, companies have been asked to pause advertising on Facebook and Instagram in July to protest Facebook’s nearly $70 billion in annual ad revenue.
Among the grievances outlined by the #StopHateForProfit campaign are the following:
- [Facebook] allowed incitement to violence against protesters fighting for racial justice in America in the wake of George Floyd, Breonna Taylor, Tony McDade, Ahmaud Arbery, Rayshard Brooks and so many others.
- [Facebook] named Breitbart News a “trusted news source” and made The Daily Caller a “fact checker” despite both publications having records of working with known white nationalists.
- [Facebook] turned a blind eye to blatant voter suppression on their platform.
What Advertisers are Participating?
The North Face was the first company to come out in support of the boycott. From there, brands began joining the boycott along category lines, pointing to peer pressure. It started with the outdoor companies (The North Face, REI, Patagonia); then consumer packaged goods (CPG) (Unilever, Clorox, Coca-Cola, PepsiCo, Hershey); beverage (Diageo, Beam Suntory; Starbucks), tech and telecommunications (HP, Mozilla, Verizon) and footwear (Adidas, Puma, Vans).
Currently, there are over 100 advertisers participating. The majority of companies are small businesses, however, major players have also given their support. Here’s a rundown of the top 5 advertisers who have joined the campaign, based on the amount of ad dollars they spent on Facebook’s platforms in 2019.
Major advertising agencies have also signaled their intention to join the boycott. This includes Proctor & Gamble, the world’s largest advertiser, which made a statement on June 25, 2020 that it “wouldn’t rule out” pulling Facebook ads if the company did not meet its standards of avoiding content that is "hateful, discriminatory or denigrating".
Top 5 Advertisers Based on Ad Spend
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Starbucks: $94.9 million
The coffee chain announced on June 28, 2020 that it would “pause advertising on all social media platforms while [they] continue discussions internally, with...media partners and with civil rights organizations in the effort to stop the spread of hate speech.”
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Pfizer: $54.5 million
The pharmaceutical corporation released a statement on June 29, 2020 that it would remove all ads on Facebook and Instagram for the month of July to demonstrate its core value of ‘Equity’ by protesting “all forms of hate speech [that] go against that value”.
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Unilever: $42.4 million
The consumer goods corporation’s support of the campaign was first announced by ice cream brand, Ben & Jerry’s, which is owned by Unilever. On June 23, Ben & Jerry’s announced its support of the campaign, calling for “Facebook, Inc. to take the clear and unequivocal actions called for by the campaign to stop its platform from being used to spread and amplify racism and hate.”
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Hershey’s: $36.5 million
Hershey co.’s CMO announced its participation in the boycott in an interview with Business Insider on June 26, 2020. Jill Baskin reported that the chocolate manufacturer’s decision came after it had made previous complaints to Facebook in early June. “Despite repeated assertions by Facebook to take action, we have not seen meaningful change”. Hershey has also reportedly cut its spending on the platform by a third for the remainder of the year.
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HP: $24.7 million
The technology company announced in a press release on its website on June 29, 2020 that it would stop U.S. advertising on Facebook and Instagram until the platform had “more robust safeguards in place”. The company also said they would pause unpaid organic publishing on both platforms.
What Are Advertisers Demanding?
Organizers have released a list of 10 recommended next steps for Facebook to take in response to the boycott. Here are the highlights:
- Elect a C-suite level executive with civil rights expertise in charge of evaluation of all products and policies for discrimination, bias, and hate.
- Submit to regular, third party, independent audits of identity-based hate and misinformation.
- Refund advertisers whose ads were shown next to content that was later removed for violations of terms of service.
- Find and remove groups focused on white supremacy, militia, antisemitism, violent conspiracies, Holocaust denialism, vaccine misinformation, and climate denialism.
- Create a mechanism that automatically flags hateful content in private groups for subsequent human review.
- Remove misinformation related to voting and prohibit calls to violence by politicians in any format.
- Enable individuals facing severe hate and harassment to connect with a live Facebook employee.
Facebook’s Response So Far
So far, Facebook has signaled it intends to take actions based on its own terms. In a memo to advertisers, the company’s VP of global business solutions, Carolyn Everson, said “boycotting in general is not the way for us to make progress together.” Also in the memo, Everson said “We set our policies based on principles rather than business interests.”
On June 26, 2020, in a livestream, Facebook CEO, Mark Zuckerberg, announced the company would change its policies to prohibit hate speech in its advertisements. He did not reference the boycotts directly or that the move was a response to pressure from advertisers.
Under its new policies, Facebook will ban ads that claim people from a specific race, ethnicity, nationality, caste, gender, sexual orientation or immigration origin are a threat to the physical safety or health of anyone else.
Additionally, Zuckerberg said the company would do more to protect certain groups from ads that suggest they are inferior. Also, ads that express contempt, dismissal or disgust directed at them. The protected groups include immigrants, migrants, refugees and asylum-seekers.
How Will the Boycott Affect Ad Tech?
With many advertisers cutting their Facebook ad spend, the cost of media will decrease for those players that continue spending. Of course, those players face the potential for negative publicity for passing on the protest.
Emarketer is currently projecting the decline of Facebook ad revenues as a result of the boycott. Their 2020 forecast shows an over $4.8 billion fall in advertising revenue.
Source: eMarketer
Where will these ad dollars move? The boycott will likely be a boon for other advertising platforms. For example, backpack brand JanSport is shifting more of its back-to-school campaign dollars to TikTok and YouTube. The North Face plans to spend more with Google and Pinterest. Smaller players will likely see gains as well, including programmatic display ads, sponsored content and affiliate marketing.
Percentage of North American Facebook advertising dollars in 2019 from top brands
Source: Axios
How Will the Boycott Affect Facebook?
Regardless of this shift in ad dollars, analysts don't see Facebook facing a major crisis in its bottom line. Facebook has more than 8 million active advertisers and relies mostly on a very large number of small and medium-sized businesses. The millions of small businesses that this includes can't afford to buy ads on television or billboards. This leaves Facebook (and duopoly rival Google) as one of the most efficient platforms online to market goods and services. Most marketers still benefit too much from Facebook advertising to really give it up long-term. It’s also important to note that many of the brands participating in the boycott, have only pulled their U.S. ad budgets. This includes international giants like Honda and Unilever.
Not only has Facebook weathered worse (in 2018, its market cap plummeted $43 billion in one day after reports of the Cambridge Analytica data violations), but its stock is buoyed by bullish investors who will buy any dip in value.
On a societal level, the Facebook boycott does indicate a far-reaching shift in public opinion. Increasing numbers of consumers and users have started associating brand silence with hate speech complicity. That said, unless the 70% of American adults who use Facebok forgo the platform, the meaningful change at the root of this public opinion shift will have little momentum.
The Takeaway
Though the Facebook boycott is a PR nightmare, it’s unlikely to have a significant material effect on Facebook’s financials. To impact on the company’s moderation policies, the task lies with millions of U.S. users to forgo its products. Ad dollars flow where eyeballs go.
