What is the boycott?
Facebook has been under fire for allowing posts that promote hate speech, threats of violence, and misinformation on its platform. While other platforms like Twitter have taken down similar posts that promoted this behavior, Facebook has chosen not to. The Facebook ads boycott is a movement that encourages brands not to spend their advertising budgets on Facebook and Instagram for July. The #StopHateforProfit campaign, and others, who advocate for equal rights are hoping the boycott will influence Facebook to change its policies on these issues. As we are over halfway through July, it is very interesting to see how companies have responded to this.
How is this impacting Facebook?
Facebook made over $69 Billion in ad revenue in 2019, according to Statista. While that may seem like a lot, there are about 8 million advertisers that spend their advertising budgets with Facebook every year, most of them are small to medium-sized businesses, according to Marketwatch.
While more large corporations are boycotting than small businesses, Facebook will only lose out on a small fraction of their ad revenue in July. CEO Mark Zuckerberg said, “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,” according to The Information. Facebook does not seem worried about the boycott and is expecting things to return to normal soon. If the boycott continues, Zuckerberg may have a different opinion on the situation. Only time will tell.
How does this impact advertising?
A basic rule of digital advertising is that the more competition there is for ad space, the higher the costs are to advertise and the less competition there is, the cheaper costs are to advertise. With that being said, Facebook is seeing slightly lower costs on their platform. This is not something to go crazy about, but you can get more bang for your buck. If the boycott continues into August or September, we expect to see costs to lower as Facebook will need to fill ad space.
If you are curious how Anvil can help you succeed on social media please read about our services here.
Who has stopped their advertising on Facebook?
Hundreds of companies around the world have joined in the boycott of Facebook advertising. The highest-spending 100 brands accounted for $4.2 billion in Facebook advertising last year, according to Pathmatics data, or about 6% of the platform’s ad revenue. Some of the well-known companies are Adidas, Coca-Cola, Starbucks, Ben & Jerry’s, and Patagonia. You can read the full list of companies here. As more and more companies jump on board the boycott, Facebook does not seem worried that the boycott will last long. Facebook CEO and Founder Mark Zuckerberg said, “ My guess is that all these advertisers will be back on the platform soon enough.”
Should my company stop advertising?
At Anvil, we have gotten many questions from businesses on whether or not they should join the boycott of Facebook advertising. At this moment, we ask you and your business to consider your company values and well-being to see if this is something your business wants to support. We, unfortunately, can’t make these difficult decisions for you, but we can give you some insights to both sides.
If you decide to boycott Facebook advertising, you can promote that you are not supporting Facebook as they are allowing hate on their platform. We recommend promoting this by releasing a press release statement to tell your customers and followers that you won’t tolerate this behavior. This could be a great public relations gesture that could be even more beneficial for your brand reputation. We also highly recommend steering your advertising efforts toward Google or Bing, to not lose momentum.
On the flip side, if you choose to continue advertising, there has been less competition for ad space leading to lower costs while the big advertising giants take a break in July. If you decide to continue advertising, it does not mean you support hate speech and Facebook’s approach to this behavior. With Covid-19 present and cases skyrocketing daily in some areas, businesses have had to close retail stores, reschedule events, and cancel other revenue streams. Digital advertising may be the last way for you and your business to bring in revenue or stay afloat during these unknown times. If this is the case, we recommend making this decision very clear to your customers as to why you are not joining the boycott.
In summary, the Facebook ad boycott is happening, and while many companies participating, others are not. It is up to you and your company to decide whether or not to boycott Facebook advertising at this time. And, as your partner in digital, Anvil will be here to give you a better understanding of the situation and clarify any questions you may have.
For more information on how Anvil can assist you in social media advertising and in other digital platforms please contact us.