Facebook has come under increased scrutiny for allowing the spread of racist, violent, and verifiably false content across its platform.
Over the past few weeks, Facebook has come under increased scrutiny for allowing the spread of racist, violent, and verifiably false content across its platform.
The #StopHateforProfit Movement
The weaponization of Facebook by racists and partisan provocateurs has brought corporate chorus within the social media giant, but Facebook isn't the only platform under scrutiny. The movement brought attention to YouTube and Twitter's identical problem with racists and bigots using its platform to stir up unrest. On June 17, 2020, the NAACP, Colors of Change and the Anti-Defamation League (ADL) launched the #StopHateforProfit campaign and requested that companies pause Facebook advertising for July encouraging the networks to take action against the rampant racism and hate speech that floods the platforms.
The North Face, REI, Upwork, and Patagonia were some of the first brands to pull their ads, while some of the world's biggest companies, including Coca-Cola, Starbucks, Verizon, Walt Disney Co., and Puma have followed their lead to join the efforts. Some companies such as consumer goods giant Unilever, whose brands include Dove, Ben & Jerry's, and Hellmann's, are taking the boycott a step further by pausing all ad spending on Facebook, Instagram, and Twitter through to the end of 2020. Fellow Advertising agency Goodby Silverstein, owned by the Omnicom Group, also showed their support the movement and announced that they will pull advertising from Facebook for the next month to support the cause
"Given our Responsibility Framework and the polarized atmosphere in the U.S., we have decided that starting now through at least the end of the year, we will not run brand advertising on social media newsfeed platforms Facebook, Instagram and Twitter in the U.S. Continuing to advertise on these platforms at this time would not add value to people and society." – Unilever, as reported to the Wall Street Journal
How Facebook Has Been Impacted
The recently-formed alliance of over 800 participating businesses should put a dent of over $7 billion in Facebook's advertising revenue. Although $7 billion is something to be proud of from a protester's perspective, it doesn't particularly impact the $70+ billion in advertising revenue that the social media giant annually rakes in.
Facebook may be able to withstand the political heat and financial hits associated with the boycott, but the real concern fell within the company's stock prices. Although the boycott doesn't indicate any major long-term risk to the company's stock, Facebook's stakeholders witnessed an 8% decrease in the company's stock price upon Unilever's announcement stating the withdrawal of ads from the platform. As consumer demand falls and ad projections start to decline, estimates surrounding earnings per share are also expected to lower with the triple hit of coronavirus, all-time low engagement rates, and the increasing pressure from marketers and clients alike.
"I won't fund an organization that fails to act against divisiveness and hate, hiding behind 'freedom of speech,'" - Sara Spivey, Chief Marketing Officer of Braze
What This Means for Advertisers
As many marketers know, reduced competition for ad space can often reflect in cheaper CPMs (Cost per thousand impressions), although that may not be the case for the social media giant. Back in March 2020, Facebook's CPM ad pricing fell as much as 50% as a result of the coronavirus pandemic, but unfortunately, it's unlikely that advertisers will notice a second wave of reduced ad spend moving into the summer months. This is because ad prices are determined by a lot more than platform revenue. With cost-per-impression (CPM) you pay when Facebook shows your ad 1000 times; two major factors that impact a campaign's fixed CPM include the campaign type and the target audience.
The impact on Facebook's ad business may be insignificant as the boycott will likely do more damage to Facebook's reputation over all else. Regardless, the #StopHateForProfit movement has increased awareness surrounding policies and discussions regarding improvements have already commenced via Zoom meetings with guidance from representatives partnered with the movement. Facebook has agreed to hire a top executive with a civil rights background, submit to regular independent audits, and plans to soon update its community standards. As of now, these changes don't necessarily meet the primary demands behind the movement. The Stop Hate for Profit Coalition has released an Update to Advertisers outlining a list of changes that are expected of Facebook before the end of the boycott including a request to improve accountability, decency and support for victims of harassment as well as a more aggressive effort to combat voter suppression based on race and ethnicity.
With the power currently laying within the hands of the user, it is up to us to decide what we as a community want to do with this information. To learn more about the Black Lives Matter movement and what you can do to help fight disinformation, visit blacklivesmatter.com or take a look at Karen Amundson's list of alternative media plan considerations for businesses participating in #StopHateForProfit.
If you or your company would like additional information about the movement or require assistance with executing a media plan consisting of viable platform alternatives to participate in the boycott, feel free to reach out to Hotspex Media's team of expert planners to make your advertising dollars work as hard as you do.