Bill Bernbach once said that 'a principle isn't a principle until it costs you something.' Well, the marketing industry is finally stepping up to the challenge, writes The Drum’s Promotion Fix columnist and global marketing speaker Samuel Scott.
As of yesterday (7 July), a public Google Drive spreadsheet maintained by Sleeping Giants listed nearly 1,000 businesses that had joined the Stop Hate For Profit campaign. The movement is encouraging advertisers to boycott Facebook until the social network makes a better effort to remove racist material posted on the platform.
“I don’t see those big brands come back if there hasn’t been structural change,” World Federation of Advertisers (WFA) chief executive Stephan Loerke told CNBC on Friday. “That’s my take on the basis of my conversations with them.”
The effect of the coronavirus on marketing and economies in general will likely be brutal but short. Earlier boycotts against Facebook and Google had negligible results. But this time might be different because of the greater business and social contexts. The Black Lives Matter movement will be the issue that changes marketing the most.
“Given our Responsibility Framework and the polarized atmosphere in the US, we have decided that starting now through at least the end of the year, we will not run brand advertising in social media newsfeed platforms Facebook, Instagram and Twitter in the US,” a Unilever spokesperson told me 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. We will maintain our total planned media investment in the US by shifting to other media.”
YouTube and Facebook’s past ad boycotts
In March 2017, one of the first major brand safety scandals occurred after some of the world’s biggest brands unknowingly funded terror groups by their ads appearing on the YouTube videos and websites of extremist organizations through programmatic methods.
In response, companies including M&S, HSBC, Lloyds, McDonald’s, RBS, L’Oreal, O2, BBC, Audi, Royal Mail and Domino’s stopped spending ad money on YouTube. Google announced changes to YouTube that month.
According to US ad analytics platform MediaRadar, YouTube lost 5% of its top advertisers in April 2017. Mizuho Bank in Japan said at the time that Alphabet, YouTube’s parent company, would lose 1% of its value if 10% of advertisers had pulled their spends.
And what happened in the end? Alphabet’s revenue increased from $24.8bn to $26bn from the first to the second quarters of 2017. (The company does not break down earnings down to those of specific, individual platforms such as YouTube.) The boycotting advertisers had returned by October that year.
In March 2019, the WFA called on the industry to hold Facebook to account after the social network was used to live-stream a terror attack in New Zealand.
But despite several of the country’s major companies pulling their Facebook ad spend at least temporarily, advertisers in the rest of the world did not seem to care. Facebook’s average revenue per user increased 16% from April 2018 to April 2019.
“Advertisers largely seem to have priced in temporary outrage as a cost of doing business with platforms,” Ana Milicevic, principal and co-founder of management consultancy Sparrow Digital Holdings in the US, told The Drum at the time.
“In the past year, we've seen several protests and theatrical pulling of ad spend only to have it quietly return to earlier levels within mere weeks of the most recent offending event.”
But Facebook’s new advertiser boycott is different
Today, we need to put Facebook’s current controversy in context. The social media platform is not facing a one-off scandal as with the New Zealand shooting in 2019 or the programmatic placement issue that hit Youtube in 2017.
The anger at Facebook today is partly the culmination of long-simmering business tensions that have boiled over – along with everything else during this tense year of 2020. For that reason, the new advertiser boycott is much more serious.
First, advertisers are applying greater scrutiny to numbers and performance data.
P&G built its own database of 1.5bn people because the company has misgivings about social platforms' figures. Facebook paid a group of advertisers $40m to settle a lawsuit claiming it had inflated its video metrics by as much as 900%.
Facebook’s reporting issues are just one reason why I wondered at a speech in England last year exactly how much of the internet is fake. Remember: Google and Facebook’s numbers are not audited by independent third parties.
Google has had its share of advertising issues, so why is Facebook the primary target today? Simple. Google, to its credit, has typically been much more responsive to advertiser concerns. During the March 2017 brand safety crisis on YouTube, Google simply fixed the problem.
“My guess is that all these advertisers will be back on the platform soon enough,” Facebook chief Mark Zuckerberg told employees at a video town hall last week, according to a transcript of the meeting obtained by The Information. “We’re not gonna change our policies or approach on anything because of a threat to a small percent of our revenue or to any percent of our revenue.”
After a meeting with Facebook yesterday, boycott organizers say they "didn’t hear anything to convince us that Zuckerberg and his colleagues are taking action".
Third, the business world is increasingly wary of being connected to the brand safety issues that stem from Facebook’s political controversies.
Facebook fell to number 14 in Interbrand's annual ranking of the best global brands last year. Two years before, the company was eighth.
The effect of Black Lives Matter on Facebook
The coronavirus will change marketing tactics only temporarily. Programmatic technology that can misplace ads is an arcane topic, even for most marketers. The New Zealand massacre was a single – albeit tragic – event in a country far away.
But the Black Lives Matter movement will fundamentally change how companies operate externally and internally. It is a visceral topic that affects every single person on an emotional level in terms of identity, history and society. In short, the issue will affect everyone in the market permanently.
Facebook – and, to a lesser extent, Google and Twitter – has been swept up in the mass political action in a negative way with corporate pressure that did not exist during prior boycott efforts.
“There is no place for racism in the world, and there is no place for racism on social media. The Coca-Cola Company will pause paid advertising on all social media platforms globally for at least 30 days,” chairman and chief executive James Quincey said in a statement. “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.”
Reddit deleted thousands of forums for hate speech. Twitch suspended Donald Trump’s official account for “hateful conduct.” YouTube banned the accounts of several influential people for racism. The entire staff of the US agency Periscope walked out over the reported resistance of its parent company, Quad, to the BLM cause.
McKinsey found that companies that are not inclusive are losing 39% of applicants. Derek Walker, founder of Brown and Browner Advertising in the US, told The Drum’s John McCarthy that the marketing industry needs to stop paying lip-service to diversity. Rania Robinson, chief executive at Quiet Storm, also wrote here that marketers should eliminate their unconscious racial bias when hiring agencies or suppliers.
Color of Change is calling on Facebook to fire vice president of global public policy Joel Kaplan. The Anti-Defamation League went from working with Facebook to cofounding the boycott against the platform.
“The Volkswagen Group stands for open interaction with each other based on equality. An environment of fake news or hate speech is therefore unacceptable to us,” a company spokesperson told me in a statement. “That is why the Volkswagen Group and its brands are suspending central advertisements on Facebook.”
“Hate speech, discriminating comments and posts containing dangerous false information must not be published uncommented and must have consequences.”
And more and more people are feeling the same way. Detox Facebook is a new, anonymous group of journalists and activists who say they are “searching for a fairer Facebook.”
“It's clear that some brands are starting to see they need to get on the right side of history. Facebook is on the wrong side, but we think we've discovered the one part of Mark Zuckerberg's body that appears to have nerve endings: his wallet,” an organiser told me in a statement.
“This campaign can and will hit him where it hurts,” the person added. The Detox Facebook organizer agreed to be interviewed on the condition of anonymity out of fear of reprisal from the social media platform.
What you should do
The Drum’s readers, especially in this time, want information that is immediately useful. So, in this regular column, I will now offer concrete suggestions as relevant.
Longtime readers know my feelings towards Facebook, but it is not my place here either to advocate for or to dissuade the current boycott. Instead, I will make some observations that both activists and Facebook can use in their offensive or defensive brainstorming.
Cutting spend directly. If I wanted my company to stop advertising on Facebook, I would go up the corporate hierarchy from my manager to the director to the vice president to the chief marketing officer to the chief executive until someone signed off on it.
Since the first instinct of companies during a recession is to cut marketing expenses, I would argue that we should start with Facebook while possibly showing that we could maintain or even increase performance by moving all or part of the spend elsewhere.
If I were Facebook, I would respond by preparing messaging, sales collateral and presentations aimed at each hierarchical level. After all, everyone from individual contributors to chief marketing officers has different needs and priorities.
Then, I would deploy account teams to any advertiser who has joined or may join the boycott and persuade them of Facebook’s value while also communicating what the company is doing to combat hate.
Knowing the pros and cons of personal tracking. Social – and many other ad tech platforms – have made their fortunes by convincing marketers that surveillance capitalism leads to the best marketing results.
If I were a boycott advocate, I would argue the opposite and use new research by Brave’s Johnny Ryan on Dutch national broadcaster NPO as one example. The company increased revenue by 61% from January 2019 to January 2020 by changing from tracking-based, third-party targeting to contextual targeting.
If I were Facebook, I would point to my friend Adam here in Tel Aviv. He runs a boxing training business. He knows nothing about brand safety or third-party tracking. He does not read The Drum. All he knows is that he can create a video, target the ad on Facebook to people in Israel who like boxing, spend a few hundred dollars, and see how many leads he gets with the cost per lead.
I would also know that Adam and the millions like him in the long tail who spend only a few dollars from time to time are my company’s real customers – not Marc Pritchard. And they do what, for them, simply works. An advertising or PR campaign reaching everyone like Adam would be important to do.
After all, Bloomberg researchers found that the new boycott could cost my company only $250m in ad sales – a tiny part of its $77bn in annual revenue. I would also know Morningstar research citing Pathmatics data finding that the top 100 brands on Facebook brought in only 6% of our revenue last year.
Seeing that ad blockers are a secret weapon. If I wanted to hurt Facebook’s wallet, I would focus not on advertisers but on users. People who use browser extensions such as Adblock Plus, Ghostery and FB Purity rarely see any advertising, sponsored posts or promoted material on Facebook (or on most of the internet).
Facebook’s revenue – as well as that of most ad tech platforms – would collapse tomorrow if everyone would use those tools today. If I wanted to support the boycott, I would heavily promote their use.
If I were Facebook, ad blocking would keep me up at night the most. Almost all online ads are delivered by some script in website code executing somewhere. Ad blockers stop the scripts from loading. It is really that simple.
To defend against ad blockers, I would create desktop and mobile app platforms and advertising that are immune to them (but such a battle can only remain one step behind because technology constantly changes). I would also consider partnerships with the major ad blocking companies that would make my platforms immune to their products.
But if I did work at Facebook, I would mainly advocate that the company better itself and the world by becoming a subscription-based platform without advertising and personal data collection at all.
Brand purpose and brand hypocrisy
This image that recently circulated on social media is the perfect example of Bill Bernbach’s sentiment. The pub is taking a stance that will likely cost it customers and revenue.
The advertisers who are joining the Facebook boycott are doing something similar. For better or worse, they believe in real brand purpose rather than brand hypocrisy – and they have the best chance of succeeding to date. But whether they will do so is anyone’s guess.
The Promotion Fix is an exclusive column for The Drum contributed by global keynote and virtual marketing speaker Samuel Scott, a former journalist, newspaper editor and director of marketing in the high-tech industry. Follow him on Twitter. Scott is based out of Tel Aviv, Israel.