Major advertisers like Unilever, Verizon, and Honda said they would halt ads on Facebook after civil rights groups called on the social platform to better police hate speech and misinformation.
The moves by big brands is unlikely to make a big dent in Facebook’s $70 billion advertising business since most of its advertisers are small to midsize marketers.
Meanwhile, these boycott statements are temporary and vaguely written, which could make it easier for brands to resume spending after July while winning goodwill in the meantime.
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On Friday, a parade of advertisers including Unilever, Honda America, and Coke said they would temporarily quit Facebook, citing hate speech on the platform.
They joined nearly 100 advertisers like The North Face, Patagonia and Ben & Jerry’s, that have responded to the call to boycott Facebook.
Facebook has faced pressure before for letting toxic content spread, but there are differences this time. The boycott grew out of a widespread movement against police brutality that has employees calling on their employers to take a stand. Company boards are now getting involved as well, marketing veteran Rishad Tobaccowala said. Even House Speaker Nancy Pelosi has called for advertisers to use their power to hold Facebook accountable.
But most experts agree: Facebook’s $70 billion ad business will be just fine, at least for now.
Take Unilever. The packaged goods giant is one of the world’s biggest advertisers but only spent $42.4 million on Facebook ads in the US last year, according to data from analytics firm Pathmatics cited by The New York Times.
Most of Facebook’s advertising comes from small companies that can’t afford to turn off the channel. Smaller brands that join the boycott could risk losing up to 80% of their monthly revenue, said Devin Whitaker, director of performance marketing at ad agency Good Moose.
Meanwhile, advertisers like Coke can come off looking virtuous by pulling their ads.
“There is no place for racism in the world and there is no place for racism on social media,” Coca-Cola CEO and Chairman, James Quincey, said.
“It’s a good PR move,” said Jonathan Mendez, a longtime ad tech entrepreneur and now adviser to Telephónica. “There’s a sensitivity for brands around social causes, and brands want to be on the side that’s good. There’s very little margin for error. Part of the natural outgrowth of that strategy is a need to become more sensitive. That’s why they’re coming out against Facebook.”
Plus, a lot of advertisers spend less in the summer and in an election year anyway because sales are slow and there’s so much noise to break through.
Also, the boycotts are temporary and follow carefully scripted language, which enables the companies to resume advertising in a few weeks or when their CMOs’ vague conditions are met.
Honda America said it would stop advertising on Facebook and Instagram “for the month of July.” Verizon said it was “pausing our advertising until Facebook can create an acceptable solution that makes us comfortable” but didn’t give specifics.
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Source:: Business Insider