Can Facebook Fix Its Biggest Problem? The Advertisers Want to Know

Mazin Hussain
Jul 15 · 8 min read
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(Image credits: Justin Sullivan | Getty Images)

Mark Zuckerberg is no longer the 3rd richest person on the planet. Several advertisers announced they’d be boycotting Facebook. The growing list includes household names like Coca Cola, Honda, Unilever, Hershey, and many more. The news saw Facebook’s stock falling and $7 billion being wiped from Zuckerberg’s personal fortune.

The push for advertisers to boycott Facebook and its products is organized by the Anti-Defamation League and five other civil rights organizations. With the Stop Hate for Profit campaign, these organizations are, “Calling for some of the world’s largest corporations to pause advertising on Facebook during the month of July 2020.”

Its goal is for Facebook to finally address its problem with hate speech. An issue that the company has tried to ignore. But will the departure of big name advertisers actually force the tech giant to finally change?

The real impact of the ad boycott

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When an advertising giant like Coca Cola announces it’ll halt advertising on Facebook, the market listens. (Image credits: Ylann Meyer | Unsplash)

In the world of advertising, Coca Cola is more than an influencer. It’s a case study used to teach what is good marketing. When the iconic brand says it will boycott Facebook, people listen. When other household names like Adidas, Ben & Jerry’s, Ford, Viber, and so many more say the same, Facebook’s stock price drops.

In 2019, Facebook made $69.7 billion from advertising. That accounts for 98% of its total revenue. It’s not surprising that the market is worried when big advertisers pull out. Yet, it remains to be seen whether this will result in long-lasting change.

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Not all companies are serious about pulling advertising to get Facebook to combat hate speech. Unilever’s Indian subsidiary has said the boycott only applies to the US. (Image credits: Asian Nikkei Review)

Digging into the details, you’ll find the actions taken by advertisers don’t always match their press statements. Some companies like Clorox have said they’ll be boycotting the platform until December. Viber also announced that it will cut all business ties with Facebook.

But Coca Cola like many other brands only committed to avoiding Facebook for the month of July. Meanwhile, Unilever Hindustan (the Indian subsidiary of Unilever) stated it’ll continue running ads on Facebook because the boycott is only applicable to the US. Some companies like Verizon have said they’re pausing advertising simply because it looks bad for their brands right now.

Granted, the goal of the #StopForHate campaign is for advertisers to boycott Facebook for a month. Yet, the social network has an abysmal record of ignoring the hate speech issue. So it’s highly questionable whether a single month where large advertisers are inactive will bring meaningful change.

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Due to the coronavirus, traditional media is being phased out in favour of digital advertising channels. But analysts forecast a dip in the global ad market. (Image credits: Gabrielle Lurie | The San Francisco Chronicle)

It’s no secret that the coronavirus pandemic has forced companies to cut costs. Stories of mass layoffs and salary cuts are evidence of this. It’s a time of crisis. Often in such times, among the first costs to be cut are related to marketing. Therefore, global ad spending is set to drop by $49.6 billion this year.

Traditional media companies have been the worst affected. British TV broadcaster ITV saw ad revenue drop by 42% in April. The Financial Times witnessed a 39% drop in print sales. In the US, the Fox broadcasting network saw its ad revenues halved. The crisis has also put local newspapers at greater risk of failure.

Yet, this doesn’t mean advertising will stop. Companies will continue to do so as a reminder to consumers that they exist. With the pandemic forcing us to remain indoors, the limited advertising budgets are going towards digital channels. But while Q1 went relatively smoothly, Facebook and other tech companies expect ad revenues to drop in Q2.

“We are understandably cautious given that most economists are forecasting a global GDP contraction in Q2, which, if history were a guide, would suggest the potential for an even more severe advertising industry contraction.” — Dave Wehner, Chief Financial Officer at Facebook

Hence, one could argue that companies supporting the #StopForHate movement are doing so for a marketing win. Taking the above factors into account, it’s hard to dismiss this cynical argument. Especially given the actions of Coca Cola, Unilever, and Verizon.

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The bulk of Facebook’s ad revenue comes from small and medium businesses. Many of whom simply can’t afford to halt advertising on the platform. (Image credits: Foxhouse Media)

Large companies can afford to boycott Facebook for a month. Unfortunately, the same cannot be said for smaller companies. Many of them rely heavily on Facebook to gain customers. As CMO of Dashlane, Joy Howard stated in a blog post, “Indeed it’s so reliable, that we don’t even call it advertising anymore: it’s user acquisition. Do you want customers? Just buy them.” This is a fact that Facebook is well aware of.

During an earnings call in 2019, Facebook COO Sherly Sandberg stated, “Our top 100 advertisers represented less than 20% of our total ad revenue.”

While they may not create headlines, the bulk of Facebook’s ad revenue comes from small businesses. Hence, analysts believe the company‘s financial impact would be insulated. Meaning Facebook simply needs to keep its head down. This storm of controversy will pass just like the others before it. But we should not accept that.

The pandemic of hatred created by Facebook

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Hate speech and misinformation on Facebook is a global problem (Image credits: U.C. Berkeley)

To its credit, Facebook has done much good. Yet, it has also brought great harm to the world. The tech mogul has always dismissed the issue of hate speech on its platform. Offering only a token PR response before attempting to sweep the issue under the rug. This inaction is killing people.

We live in a world where social media platforms have been weaponized. In the US, Russian misinformation campaigns have disrupted elections. In Sri Lanka, terrorists used the platform as a means of indoctrination. This is despite multiple warnings from the authorities. Sadly, the bloodiest example was seen in Myanmar. The nation's military used the Facebook to incite violence for a genocidal campaign of ethnic cleansing. Facebook’s inaction enabled all of these atrocities.

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Facebook COO Sheryll Sandberg said the company would work to improve its efforts to fight hate speech. Such words have proven to be empty PR statements in the past. (Image credits: Matt Winkelmeyer | Getty Images)

Sadly, Facebook has shown no signs of addressing these failures. The company leadership recently met with the civil societies behind the Stop Hate for Profit. The meeting was criticized as a PR exercise with the civil rights leaders leaving disappointed. Among the attendees were Zuckerberg and Sandberg. Neither of whom showed commitment to solving the issue.

“Instead of committing to a timeline to root out hate and disinformation on Facebook, the company’s leaders delivered the same old talking points to try to placate us without meeting our demands,” said Co-CEO of Free Press, Jessica J. González

A civil rights audit of Facebook also came to an end this week. The company commissioned it in 2018 following critical calls from Congress and civil rights The final report paints a damning picture of Facebook’s policies, describing them as, “A seesaw of progress and setbacks.” The audit acknowledged its progress thus far. It has expanded moderation policies around hate speech, worked to prevent discriminatory ad targeting, and more frequently engage with civil rights leaders.

However, the auditors led by the former director of the ACLU legislative office, Laura Murphy, went onto say, “Unfortunately, in our view, Facebook’s approach to civil rights remains too reactive and piecemeal.” Their report highlights how the tech giant hasn’t been impartial in the enforcement of its policies.

For proof, it points out the content posted by President Donald Trump. Particularly, recent posts encouraging violence against peaceful protestors and two more facilitating voter suppression. “The Auditors vigorously made known our disagreement, as we believed that these posts clearly violated Facebook’s policies. These decisions exposed a major hole in Facebook’s understanding and application of civil rights,” commented Murphy.

Regrettably, nothing may change and more will die

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Despite its noble intentions, The Stop Hate For Profit campaign may not bring about positive change where Facebook seriously commits to fixing its biggest issue. (Image credits: The Telegraph)

At the time of writing, 900+ companies have joined the Stop Hate for Profit campaign. But as we saw earlier with the likes of Coca Cola, Unilever, and Verizon, not all are truly committed to holding Facebook accountable. Corporate activism generally comes with a side of hypocrisy. Even if they were, their departure is a tiny percentage of Facebook’s revenue.

Further, companies can’t afford to be away from the social network for too long. This is painfully true for smaller companies. Facebook too is well aware of this. Alongside Google, the duo has a virtual duopoly on the digital advertising market. Given how the coronavirus has upended our lives, even if it shrinks in Q2 2020, overall growth will likely continue. Especially since many of us are now stuck indoors and glued to our screens.

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Facebook is simply too big for companies to ignore. The tech giant knows that businesses can’t afford to stay away from their platforms. (Image credits: MIT Technology Review)

This is why Facebook shows no commitment to fix the issue. Instead, opting for cheap PR exercises in an attempt to buy goodwill. Despite its destructive flaws, the social media giant is too big to ignore. Its platform is used by 2.6 billion people every month. That’s before you count the 1 billion on Instagram and 2 billion on WhatsApp. Both apps are also owned by Facebook.

It may seem like Zuckerberg and the rest of Facebook is scrambling to put out a raging fire. In truth, the fire will die out over time. The advertisers will return sooner or later. They can’t afford a prolonged boycott. It’s a war of attrition that Facebook knows it’ll win. Hence, it has no incentive to actually commit towards fixing the issue. Ultimately, this paints a grim picture of the future.

By choosing silence, the tech giant continues to wash its hands with blood. For the plague of hatred, Facebook unleashed upon the world has taken countless lives.

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Mazin Hussain

Written by

A journalist in the tech industry with over 7 years of experience. Expect long forms about technology. Feel free to reach out on: mazin.hussain9@gmail.com

The Startup

Medium's largest active publication, followed by +718K people. Follow to join our community.

Mazin Hussain

Written by

A journalist in the tech industry with over 7 years of experience. Expect long forms about technology. Feel free to reach out on: mazin.hussain9@gmail.com

The Startup

Medium's largest active publication, followed by +718K people. Follow to join our community.

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