Since last week, a number of big companies have announced their support for the campaign of “StopHateForProfit”, promising to suspend advertising spending on Facebook in an attempt to force the company to step up its fight against hate speech and disinformation. The big customers include Us telecoms operator Verizon, European fast-track giants Unilever, Coca-Cola and Honda. More than a hundred advertisers have also expressed interest in joining.
Starbucks became the latest to join the boycott on Sunday ( June 28 ) . The company said it was not part of the campaign, but it will then discuss with civil rights groups and media partners how to stop the spread of online hate speech and has decided to suspend advertising on social platforms.
Facebook shares closed down 8 per cent in the previous session (June 26) on the back of controversy over hate speech and a boycott by advertisers, wiping $56bn off its market value. That sent chief executive Mark Zuckerberg’s fortune down $7.2 billion to $82.3 billion, falling from third in the world’s richest list to fourth place, behind Amazon founder Bezos, Microsoft founder Bill Gates and luxury goods giant LVMH president Bernard Arnault.
The dispute dates back a month. Demonstrations against the violent law enforcement of white police forces erupted across the United States following the death of African-American man George Floyd. President Trump also took to Facebook and Twitter to warn: “If someone’s robbing, you shoot,” it was seen as a call for violence, and was branded a glorified violence on Twitter, but Facebook didn’t do it.
In a speech to employees in early June, Zuckerberg defended his decision to keep Trump’s post. He did not believe that the platform should act as “an arbiter of all truths”. This has sparked internal discontent, with hundreds of employees taking part in “online strikes” and technicians announcing the firing of their bosses.
But as more and more opposition emerged, Zuckerberg compromised again on Friday. He stressed in a live broadcast that the company would take a number of steps to combat hate speech. Posts that violate policies, for example, are tagged and government officials’ statements are censored; hate content in ads will be expanded, especially if there will be no divisive or inflammatory content in ads aimed at immigrants and refugees.
However, the domino effect has been triggered. As of June 29, the number of customers who stopped running ads was still growing. In 2019, Facebook’s 8 million advertisers contributed $69.7 billion ($493.3 billion) to the company worldwide, or 98 percent of its total revenue ($70.7 billion). About a quarter of that advertising revenue comes from big companies, and the rest comes from small businesses, according to Reuters.
If it wants to have a material impact on Facebook’s finances, there are far more advertisers announcing a boycott than it currently has. Analysts said the survey showed that the impact of the boycott “may not be significant” but if other major industry leaders, such as Unilever, opt edited, the boycott would have a snowball effect, attracting more advertisers.
This is not the social giant in crisis. In 2018, Facebook was hit by a data breach scandal involving Cambridge Analytica, when a global boycott was launched. But Bernstein analysts said in the report that the current environment is very different: “It is clear that who participated in the boycott, who did not participate in the boycott, brand silence (equivalent to) is complicit.” “
For brands or advertisers involved in the boycott, however, the ultimate goal is not to reduce Facebook’s revenue, but to express an attitude that they don’t want to sponsor violent or bigoted statements.
Carolyn Everson, Facebook’s vice president of global business solutions, responded that the company is committed to eliminating hate speech, but that “resisting is not our way forward together” and that “we don’t make policy changes because of revenue pressures . . . We make policies based on principles, not business interests. “
At the same time, other platforms have been hit. Coca-Cola announced on Friday that it would suspend advertising on all social media platforms worldwide; Unilever would stop advertising on Facebook, Instagram and Twitter until December 31; and Starbucks would only exempt YouTube, the video site owned by Google, from other platforms.
According to Reuters, the groups that launched the campaign, including “Free Press,” “Common Sense,” “Color of Change,” the National Association for the Advancement of Colored People and the Anti-Defamation League, are planning to expand their campaigns globally to increase pressure on Facebook.
As a surge in confirmed cases of new crown pneumonia were detected in the United States during the resumption of work, many places slowed or suspended the economic restart process, forcing some advertisers to scale back marketing spending. Analysts now expect Facebook to maintain only 1 percent revenue growth in the current quarter and 7 percent in the third quarter. It will also be the company’s worst-growing quarter since it went public.