Facebook Ad Boycott
Social media giant Facebook Inc has been facing plenty of heat lately. It has been accused of failing to check misinformation and hate speech. More than 90 major marketers have joined an ad boycott campaign, known as “Stop Hate for Profit”, against Facebook. The list includes prominent brands like Coca-Cola, Unilever, Starbucks, Diageo, Clorox, Honda, Hershey, and Verizon.
The criticism against Facebook centers primarily around the social media platform’s failure for not conducting robust fact-checking and not removing political messages that contain misleading or false information. There is also no labeling of inflammatory posts in a manner that Twitter labels potentially offensive content with warnings.
Facebook seems to be taking action to address the issue. The company’s CEO, Mark Zuckerberg, said in a blog post recently that Facebook will start blocking content that violates company policies and will take other measures to fight hate speech as well as crackdown on voter suppression. Zuckerberg said, “Even if a politician or government official says it, if we determine that content may lead to violence or deprive people of their right to vote, we will take that content down.”
Meanwhile, analysts do not seem to be too perturbed by these developments. They have argued that the impact on revenue from the ad boycotts will be less than 5%. Analysts have even suggested that the pullbacks by many of the brands mentioned above may even result in lower facebook ads cost for a direct-response campaign, which may boost the demand among advertisers. During the last earnings call, Facebook had revealed that total advertisers on Facebook went up from 7 million in 2019 to 8 million in 2020.
FB stock closed at $220.64 on 20th June 2020, down 4.86% for the month.