The Facebook Boycott: Should you join?
No doubt you’ll be familiar with the latest Facebook saga which has seen many major brands pull advertising from the social media giant in response to its stand on hate speech. You may even be wondering whether your brand should pull its advertising from Facebook. In this article, we take a look at the consequences of the boycott and what it means for brands.
The consequences for Facebook
It’s been reported that the founder and CEO of Facebook is not too concerned about the boycott saying that it’s a “reputational and a partner issue” as opposed to an economic issue. And yet, reputational issues are not mutually exclusive from economic issues; contrary to the adage “there’s no such thing as bad press”, reputational issues can have a significant impact on a business’ finances.
The impact on Facebook’s coffers
So what is the impact on Facebook’s finances? Zuckerberg is reported as saying that the threat is “to a small percent of our revenue” whilst a spokesperson for Facebook has indicated that there are pressures on finances, saying “we make policy changes based on principles, not revenue pressures”.
Facebook primarily makes its money from advertising; in 2018 98.5% of its revenue ($55 billion) was generated by advertising. So in order for the financial pressure exerted by the boycott be noteworthy, the boycott will need to hit a substantial percentage of that revenue. Given the sheer size of the Silicon Valley company and its dominance in the market (a long-time source of consternation for the Competition Markets Authority) it’s possible that the revenue lost to the boycott won’t reach double figures as a percentage of Facebook’s annual advertising revenue. Certainly the resilience of Facebook’s share price suggests that it will not be unduly shaken by the campaign.
Who is and isn’t boycotting
Over 800 brands have now signed up to the Stop Hate For Profit campaign, including massive names like Absolut, Ben & Jerry’s, Coca-Cola, Honda, Innocent, Levi’s, Pfizer, PlayStation, Puma, Unilever and Vans.
Some other brands haven’t formally joined the boycott but have “paused” advertising. With brands like Lego, Starbucks and Target taking this approach, it’s clear that the impact on advertising revenue won’t just come from companies boycotting Facebook advertising as part of the official campaign.
But many more companies are still advertising with Facebook including many major players. A study from Pathmatics last year identified that the brands that made up the top spenders between August 2018 to August 2019 were Microsoft, Huel, Tesco, Nestle, Proctor & Gamble, Vodafone, Sainsbury’s, Priceline Group, Unilever and Amazon. With the exception of Microsoft it seems that the majority of these brands are still advertising with Facebook. And, of course, they’re not the only ones.
The consequences for retailers
Boycotting as way of boosting or protecting your brand
Joining the boycott gives your brand an opportunity to make some noise for itself and can be a form of marketing in and of itself. What brands need to consider is if the attention from the boycott is equivalent to what it would usually get from advertising on Facebook for the equivalent period.
To properly evaluate the risk it’s necessary to understand the context of the decision: July is not a significant month for sales (much like August) and this year comes in a period of recession exacerbated by the coronavirus pandemic. Potentially, brands are not losing much by choosing to remove adverts from Facebook for the month of July which is what those signed up to the Stop Hate for Profit campaign have pledged to do.
At this point in time (post-July), purely joining the boycott may not be sufficient – brands need to make sure their actions reflect their brand image. It may be that developing an advertising policy is more appropriate as that would demonstrate an ongoing dedication to standing against hate speech. This also gives your brand more control over the approach it wants to take.
It’s also important to consider whether the boycott reflects your brand’s image at all. If your brand’s value is predicated on social consciousness, then boycotting Facebook is something that’s worth thinking about: there’s a risk that not signing up to the campaign or otherwise “pausing” your adverts could damage your brand image, causing more harm than joining the boycott ever could. What’s noticeable about many of the brands that have joined the campaign is that social consciousness is a part of their brand image and, from a cynical perspective, the boycott is good for that brand image.
From an even more cynical perspective, it’s worth noting that some of the pledgors have also had their own bouts of bad press lately in relation to their response to the Black Lives Matter movement and it’s arguable that this campaign gives those brands the opportunity to re-focus that press.
It’s also worth noting that there has been no public condemnation of brands that have not chosen to boycott; indeed that would be a bold move for anyone to make as in spite of the many brands that have joined the boycott (whether officially or not), boycotting brands still form a minority in the grand scheme of things.
As a retailer what are your alternatives to Facebook?
If you do decide your brand should boycott but can’t afford to stop advertising there are alternative methods.
Social media alternatives to Facebook, and its subsidiary Instagram, include the established website Pinterest and relative newcomer app Tik Tok. Given the ongoing effect of coronavirus, online channels will remain important. Other ways to build loyalty online are with blogs and e-mailing lists.
Whilst print publications have a dedicated following and may be a good alternative if you can find the right match for your brand, they can be expensive and nowadays often don’t have the same reach as can be achieved online.
Another way to enter the consumer consciousness is through radio or streaming sites (like Spotify), again the key is to select the right match for your brand. An advantage to advertising on streaming sites is that you can often tie your campaign into a playlist that people can listen to and develop a connection with your brand.
One advantage of the popularity of online advertising is that is seems to be having a positive impact on rates for advertising on television channels potentially making television adverts affordable to brands that historically wouldn’t be able to afford such adverts.
The issue with all these methods is that the reach is much more limited than that of Facebook – with over 2.6 billion monthly active users few methods can compete. The time, effort and money invested in other methods will need to be considered against the relative ease and cost effectiveness of advertising via Facebook.
The consequences for the AdTech industry
Channels like billboards and e-mailing lists have one thing in common: they are of little use to the AdTech industry as brands won’t be paying for adverts using AdTech. This means that not only will the publishing platforms struggle but so will all the intermediary players as they can’t make money from placing adverts if there are no adverts to place.
Platforms like Pinterest will be able to compensate by collaborating with influencers for editorials but for small platforms created in Facebook’s image more creativity will be required.
The consequences for smaller publishing platforms
Smaller platforms also need to be pro-active in their response to the campaign as many brands participating in the boycott have already expanded their stance to review all social media platforms that they advertise on. Whilst Facebook may have the financial backing to weather the storm, smaller providers will need to pay close attention to public sentiment to avoid being wiped out in the wake of this campaign.
Such brands would do well to take action quickly as the longer a brand takes to respond, the more damage control they have to do: Facebook has already said that they will be labelling content that violates standards much as Twitter has been doing (notably by including warning notices on some of President Trumps tweets) but what seemed revolutionary when first done by Twitter is not perceived the same way in relation to Facebook. The message: take impactful action asap.
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