Starbucks and Levi's join Facebook ad boycott – but what will be the impact?
An advertising boycott against Facebook is gaining momentum, with global brands such as Starbucks and Diageo joining the growing throng of businesses pulling marketing dollars in order to put pressure on the social network to tackle hate speech.
Over 160 big spenders – including Verizon, The North Face and Ben & Jerry’s – have now boycotted the social network over its handling of damaging content and misinformation.
Brands joining the Facebook boycott in July and beyond including Unilever, Levi's and Verizon
The ‘Stop Hate for Profit’ movement began calling on major companies in Europe to stop investing in Facebook for the month of July and many have obliged. Reports emerged this week that several US counterparts had also taken the pledge, such as Levi's and Coca-Cola.
With brands already culling their marketing budgets amid the Covid-19 pandemic, some industry onlookers have dismissed advertisers' temporary pledges as little more than a PR stunt. Others, meanwhile, have suggested that the movement is unlikely to have the desired material impact on Facebook's bottom line, given that the majority of its revenues are derived from small-to-medium businesses.
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Here we give you a primer on the reasoning behind the boycott, which companies are taking part (and for how long), and the potential long-term impact.
Why are brands boycotting Facebook?
The 'Stop Profit for Hate campaign' first launched on 17 June, backed by civil rights groups including the NAACP, Color of Change and the Anti-Defamation League.
The coalition has been calling on major corporations to put a pause on advertising on Facebook, citing the company's "repeated failure to meaningfully address the vast proliferation of hate on its platforms".
The initiative launched in the wake of Facebook's decision not to take action on incendiary posts from President Trump and amid widespread protests over the death of George Floyd in police custody in the US. It also comes ahead of the 2020 elections in the US.
The boycott began with socially conscious lifestyle brands, like The North Face and Patagonia. Now, huge advertisers like Verizon, Unilever and Starbucks are getting involved.
What's Facebook's stance?
After Unilever waded in, Facebook CEO Mark Zuckerberg promised “new policies to connect people with authoritative information about voting, crack down on voter suppression, and fight hate speech”.
Actions include labelling posts that are potentially harmful and even in violation of the platform's policies but are not censored by the platform because they are deemed newsworthy.
Facebook will also add a link to its voting information centre to posts that reference voting, including those made by politicians such as President Trump.
But, it's stopping short of pledging to outright remove all divisive political material.
Which major brands are pausing Facebook ad spend, and for how long?
The North Face
First out of the gate, The North Face said it was pulled spend from “all Facebook owned properties”.
Patagonia has frozen its Facebook and Instagram spend has “at least [until] the end of July pending "meaningful action" from the social media giant.
Unilever won't run ads on Facebook, Instagram or Twitter in the US for at least the rest of 2020, ahead of the election period.
The Dove owner said in a statement: "Continuing to advertise on these platforms at this time would not add value to people and society. We will be monitoring ongoing and will revisit our current position if necessary."
Unilever subsidiary Ben & Jerry’s, famous for its social activism, had already confirmed it would be joining the boycott early last week.
Procter & Gamble
After its rival pulled out, P&G was next to move.
Top marketer Marc Pritchard said: “We’ve initiated a comprehensive review of all media channel, network, platforms and programs to ensure the content on which we advertise accurately and respectfully portrays Black people – and all people for that matter – and that we are not advertising on or near content that we determine is hateful, denigrating or discriminatory.
It emphasised that the review would be “broad” and cover all media formats.
Diageo will pause ads on all social media platforms starting from July and “will continue to discuss with media partners how they deal with unacceptable content”.
Verizon is believed to be the biggest spender to have paused all Facebook and Instagram spend.
It's reasoning: “Our brand safety standards have not changed. We have strict content policies in place and have zero-tolerance when they are breached, we take action. We're pausing our advertising until Facebook can create an acceptable solution that makes us comfortable and is consistent with what we've done with YouTube and other partners."
Jen Sey, chief marketing officer of Levi's, said in a statement late last week the company was pausing all paid Facebook and Instagram advertising globally at least through the end of July across all of its brands. "When we re-engage will depend on Facebook’s response.”
All social media has been paused at Coke “at least 30 days”.
James Quincey, chairman and chief exec of The Coca-Cola Company, said: "We will take this time to reassess our advertising policies to determine whether revisions are needed. We also expect greater accountability and transparency from our social media partners.”
Like Coca-Cola, Starbucks is pulling social media spend on all platforms, not just Facebook.
The company didn't mention 'Stop Hate for Profit' in its statement on the matter: "We will pause advertising on all social media platforms while we continue discussions internally, with our media partners and with civil rights organisations in the effort to stop the spread of hate speech."
Ok - what other advertisers are joining in?
The full list is currently running at over 160. Here are some more names you might recognise: Arc'teryx; Beam Suntonry; Birch Box; Dashlane; Eddie Bauer; Eileen Fisher; Hershey's; Honda America; JanSport; Lululemon; Magnolia Pictures; REI and Upwork.
How will it actually impact Facebook's business?
The idea of the exodus is to put financial pressure on Facebook to change its policies. Facebook generated $69.7bn in revenues from advertising in 2019, 99% of total sales.
A boycott could inflict pain in a year that will already see momentum slow thanks to Covid-19. Facebook's ad revenue is currently forecast to hit $18.5bn in Q3.
Following Unilever's announcement, Facebook's shares took a tumble on Friday, finishing the day down more than 8% at $216. This fall shows that there's potential for advertisers to influence Facebook's trajectory if they continue to speak out against its policies.
According to data analytics provider Pathmatics, Verizon had splurged $850,000 (£689,000) on Facebook ads in June up to this point. So brands are putting significant budgets to the side, which could hurt Facebook's revenues in the long-term.
However, the majority of Facebook's revenues are derived from SMEs, not big brands. The bulk of the six million advertisers using its platform are local and online businesses, not big household brands.
The magnitude won’t really be clear until Facebook releases its Q3 results in October.