What the Facebook Boycott Means For (Small) Advertisers
For years, Facebook has been monopolizing the market for online ads as one of the most visited and used social media platforms. Its global reach and user activity have made it an indispensable digital advertising platform for big and small businesses looking to reach the social network’s vast audience.
Not even several controversies surrounding unethical practices on blockchain and crypto-focused ads in the months ahead of Facebook announcing the launch of its crypto Libra or users complaining of targeted ads on their phones after talking about specific products or services were able to slow down Facebook’s growth.
That is, until now.
Most recently, Facebook stirred up a new controversy as a growing number of prominent household names are joining a Facebook advertising boycott over its handling of hate speech and misinformation. This culminated with the news that home goods giant Unilever would halt ad spending for at least the remainder of the year on Facebook, as well as Twitter (TWTR). And the list doesn’t stop there. Eddie Bauer, Magnolia Pictures, Ben & Jerry’s, Patagonia, the North Face, REI, and other socially-conscious and engaged brands announced that they would stop advertising on the platform through July.
Starbucks (SBUX), the sixth-largest advertiser on Facebook, also confirmed it would pause all social media advertising, although it did not explicitly link the action to the #StopHateForProfit campaign.
Other companies — including Adidas and Clorox — are also pulling ads, though they have not formally joined the campaign.
This official advertiser boycott is part of a protest against what these brands claim are the site’s failures to stop the spread of hate speech.
A civil rights coalition, which includes the Anti-Defamation League (ADL) and the NAACP, launched the #StopHateforProfit campaign at the start of July when it called on major corporations to put a pause on advertising on Facebook, citing the company’s “repeated failure to address the vast proliferation of hate on its platforms meaningfully.”
The movement itself comes during escalating protests across the US from Black Lives Matter activists who feel it is high time that companies re-examine their role in society and the value they bring to their employees, communities, and social equity.
In such tumultuous times, when the world is facing a crisis of unprecedented proportions, ‘adding value to people and society’ is more crucial than ever. The more socially-engaged brands like Unilever, Coca-Cola, Honda, and Patagonia are getting involved, the more apparent how important it is for companies to adopt a “mindset,” both culturally and societal, to succeed today.
It is not just about being responsible or meeting public expectations. In this new era of corporate leadership, consumers are looking for brands that are deeply engaged in the world's issues, and corporate social responsibility is part of their brand vision rather than a ploy to attract clients.
With Facebook’s roughly $70 billion in annual revenue almost all coming from advertising, both big and small businesses are vital to the social media giant. The company has to deal with the outflow of smaller companies, scaling back on advertising spending due to the pandemic, and the more prominent brands pulling out.
Of the companies that have joined the boycott so far, three — Unilever, Verizon, and the outdoor equipment retailer REI — are among the top 100 advertisers on Facebook, according to data compiled by Pathmatics, a marketing intelligence firm.
The highest-spending 100 brands accounted for $4.2 billion in Facebook advertising last year, according to Pathmatics data, or about 6% of the platform’s ad revenue. Topping the list were Home Depot (HD), Walmart (WMT), Microsoft (MSFT), AT&T (T) (which owns WarnerMedia, CNN’s parent company), and Disney (DIS).
The #StopHateforProfit campaign's effects were enough to tank Facebook’s stock and prompt speculation of a possible domino effect among large advertisers.
While it is still unclear where this action will go in the weeks and months ahead, a new trend is emerging. Many companies — both big and small — are turning to other platforms and channels.
Reallocating to other social media, other digital publishers linear TV and platforms like Hulu may soon become the new norm if Facebook doesn’t step up efforts to answer the demand for better moderation and take real action against the spread of hate and misinformation on its platform.
While everyone is waiting for Facebook to take a stronger stance on such a pressing social issue, the current situation is a perfect opportunity for up-and-coming brands to position themselves at the forefront of social change. Indeed, consumers have a low tolerance for dishonesty and insincerity and will be able to tell if a company is trying to capitalize on a sensitive topic such as the Black Lives Matter movement and the related #StopHateforProfit campaign. However, for brands that wholeheartedly want to be part of the social change they champion, joining in the Facebook ad boycott maybe that initial move that puts them on the radar of consumers.
Naturally, it takes some time to develop an intuitive feeling for the new media landscape's nuances. Still, it is crucial to building that skill as consumers today connect with brands and with each other on a more emotional level than before. Therefore, companies need to be fully ‘socialized’ and passionate about social media and willing (and keen) to use their social media profiles and communities to spread a message of positivity, inclusivity, and tolerance.
A recent report by Sprout Social, “Creating Connection: What Consumer Want From Brands in a Divided Society,” found that people are expecting a lot of social media in general and brands, particularly in a survey of 1000 consumers.
The social media management solutions provider found that four out of five consumers believe society is more divided now than ever before, with 68 percent pinning the blame on the government and political leaders and 55 percent pointing to social media. However, 91 percent of respondents believe social media can successfully connect people, with 78 percent saying that they want brands to do their part and make this happen.
Consumers have evolved to expect more from brands than simple statements to get into the media and have that clickbait. They are looking for actual values and beliefs, brands listening to their audience, and understanding their corporate views align with that audience.
And Facebook’s boycott is allowing companies to do just that. One of the upsides of this socially-charged issue is that small businesses can take advantage because social media has democratized the market. It no longer takes multi-million marketing budgets to reach consumers — all it takes is joining and believing in one worthwhile, socially responsible cause that can impact the world we live in.
