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Companies face tough decision on Facebook boycott

By , Incubeta’s head of data solutions
South Africa , 14 Jul 2020

As Facebook continues to battle the rising ire at how it handles (or rather fails to handle) hate speech, I am sceptical about the #StopHateForProfit ad boycott affecting lasting change.

Incubeta’s head of data solutions, Andrew Smit.
Incubeta’s head of data solutions, Andrew Smit.

To put this latest boycott in perspective the move by big brands like Coca Cola and Unilever to pause or pull advertising from the social media platform harkens back to the YouTube Adpocalypse.

In 2017 major advertisers froze ad spend on the video channel based on a growing concern that they were inadvertently supporting objectionable content through their ad dollars.

In response to the Adpocalypse, YouTube was forced to change and, if you speak to YouTube content creators, they will tell you that they felt the effect of the campaign. While YouTube didn’t lose out in the long-term, the boycott hit it sufficiently in the short-term to prompt change. Unfortunately, I don’t think it will have quite the same effect with Facebook.

Firstly, the type of companies advertising on YouTube are brand advertisers. They are not after a direct response. By pulling ads they are able to show their displeasure and, at the same time, reinforce the brand culture with their customers by distancing themselves from the mega-platform.

However, most advertisers on Facebook are direct response advertisers. They rely on the return on investment from their ad spend. So, if you were spending R10 000 a month on ads on Facebook you would be doing it because you are seeing a R50 000 or R100 000 a month return on that spend. If an advertiser like this suspended or pulled ads in support of the boycott, it would actually cost them money.

If you take a scroll through Facebook and Instagram, you are far more likely to see and advert for an app or a game than from a big liquor company or a bank.

It is an unfortunate reality that the majority of those advertising on Facebook can’t afford to take the moral stand many of them may want. The old 80 / 20 rule doesn’t apply here. Facebook makes its money from the millions of small advertisers rather than the big global brands. And, as of April 2020, there were 8 million Facebook advertisers, so Mark Zuckerberg has a fair size customer base that he knows won’t shift their spend. This is more of a reputational issue than a financial threat.

While advertisers will not be keen to have their brands alongside hate-filled content, it remains to be seen how effective this boycott will be, or how long advertisers will hold out before they essentially have no option but to have their brands back on these platforms.

With all the news surrounding the boycotts, the meetings between Zuckerberg’s team and the various civil rights groups, things may well change in a week. For now though, companies should use the time to revisit their brand culture and ethos and check where they stand on issues like this. In mercurial times such as these, this will not be the last time they will be required to make a call on matters like this one.

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