Global brands are looking to cut their spending on social media at a scale never since the emergence of social media..
It is a raging battle between thumbs down and thumbs up!
Global brands are looking to cut their spending on social media at a scale never since the emergence of social media. There are indications that the boycott could spread. Here’s what is happening.
Why do brands want to boycott social media?
Several large brands have recently announced that they are stopping advertising on social media. Unilever, Coca-Cola, Pepsi, Diageo, Honda, Starbucks, Hershey, Verizon, Levi Strauss, Ben & Jerry’s, Patagonia, and others are among a growing list. They are boycotting social media because they believe that the social media giant has not done enough to control hate speech on its platform. Facebook and Instagram have specifically come under fire.
A group of six organisations, including Anti-Defamation League, Free Press, Color of Change, NAACP, Sleeping Giants, and Common Sense urged large Facebook advertisers not to support a company that puts profit above safety. The group claimed Facebook allowed “racist, violent and verifiably false content” to run rampant on its platform. The campaign began on June 17.
Can the movement impact Facebook’s revenues?
Facebook has nearly eight million advertisers and earned $69.7 billion in revenue in 2019. Last quarter, its revenue was over $17 billion. Some companies have said that they will stop advertising on the platform for 30 days, in line with the call given by the six groups. Companies like Coca-Cola and Starbucks have decided to pull out of all advertising on social media and focus on alternative marketing channels. According to eMarketer, Facebook’s US revenue from digital advertising could rise this year to $31.43 billion.
The big brands that have announced their decision have hogged the limelight. Some advertising agencies are also advising clients on similar lines. Together, these brands drive over $100 billion worth of advertising, across all platforms. But for small companies that thrive with advertising on Facebook or Instagram, there is little option. Their businesses could be hit if they stop spending on Facebook and/or Instagram.
Facebook CFO Dave Wehner had said during the last quarter results that it was seeing a slowdown in advertising.
Which brands have joined?
The large brands which have announced that they are stopping advertising on Facebook and/or Instagram are among the biggest in the world. Unilever, Coca-Cola, Microsoft, Volkswagen, Mars, Target, Ford, Diageo, Honda, Starbucks, Pfizer, Verizon, Levi Strauss, Daimler, Pernod Ricard, The Body Shop, Upwork, including over 150 others. If companies in Europe support the campaign, more companies could be part of the boycott.
The six groups are driving the hashtag #StopHateforProfit. It is important for Facebook to keep an eye on the developments since the large advertisers together account for nearly a fourth of its revenue. The six groups now want to spread their wings and also appeal to companies in Europe and Asia. Online advertising is nearly twice as big as television in the US.
What has been Facebook’s reaction?
Last week, Facebook introduced new tools that would label hate speech from politicians. The six companies leading the campaign have dismissed the steps that have been announced as, calling it not strong enough. Facebook has also promised to work with the rights groups to identify hate speech more aggressively. It also plans to use its AI to remove most of the hate speeches. Facebook also organised a call with nearly 200 clients and said that the company had a “trust deficit” and wants to repair it with a dialogue with its clients.
The online advertising boycott could also hit Twitter, Snapchat, and could spill over to Google, Tencent, and others.
Getting social media companies and brands to do thumbs up could now be a tough ask!