The big bulls like Coca Cola, Verizon, Ben & Jerry’s, Unilever, Honda, and other advertisers have boycotted their advertising spends on Facebook
By Rahul Tekwani
The year 2020 has been a truly roller coaster ride, times are tough and one can’t predict what future beholds. In recent trends, we have seen two terms gaining popularity, ‘COVID19’ and ‘Digitalisation’. When all the major industries eye to take advantage of the new digital advertising we see the biggest of names pulling out the major share of their marketing spends from Facebook. The big bulls such as Coca Cola, Verizon, Ben & Jerry’s, Unilever, Honda, and hundreds of other advertisers have boycotted their advertising spends on Facebook.
Facebook, the global social media colossus has been confronting a new pressure campaign from advertisers unlike anything in its recent history. A growing number of big multinationals have joined a Facebook advertising boycott over its handling of hate speech and misinformation.
How it all started?
Facebook acted lenient and was seen to take no action on controversial posts by US president Trump — including one during the racial justice protests. Silicon Valley giant which has been a bunny over Cambridge Analytica and fake news issues in India has now been a culprit of lacking privacy policies against critical issues, lacking moderation of hate and disinformation.
What can this lead to?
Brands don’t want to associate themselves with something that sponsors violent, biased, fake news and hate content. As the companies with the biggest marketing budget stop advertising on Facebook and Instagram, it is expected that they will be shifting their digital ad budget to other platforms such as Snapchat, Pinterest, Amazon, TikTok, Google and YouTube. The share of the social media giant has seen a major dip of close to 9% last Friday and lost a market cap of more than 7 billion dollars. We can expect this trend to continue beyond July which can eventually lead to a billable loss of close to a billion dollars or more for the company.
What does the big Mark think?
On June 26, Mark Zuckerberg said in a Livestream, “We will soon start labelling some of the content we leave up because it is deemed newsworthy, so people can know when this is the case.” He also mentioned about the new policies controlling the hateful language in ads, as well as other guidelines. He further added “We already restrict certain types of content in ads that we allow in regular posts, but we want to do more to prohibit the kind of divisive and inflammatory language that has been used to sow discord.”
How does it affect the India advertising scenario?
The media report suggests that the boycott is only applicable for the US businesses of these brands but it is expected that this will have some indirect effect on the balance sheet of Facebook and its products in India. There have been dark clouds over Facebook’s India business, with fake news menace, the slow growth in payment unit business, and the data privacy issues. Facebook India has faced some major competition from the products such as Chinese platform TikTok and Google’s YouTube in the past few months.
The uncertain road ahead
As many companies look towards “brand safety” as the motto for their advertising it is believed that companies will maintain a good distance from the social media platforms till the time there is an improvement in the moderation policies. With the marketing budgets shredded down due to the pandemic, companies are willing to spend every single penny carefully. So, we do expect the budgets to be reallocated to other channels and medium, till the time the situation improves.
The author is group brand manager (Planning), Enormous Brands