Ree­bok and Ford join Face­book boy­cott

Boy­cott won’t hurt as smaller ad­ver­tis­ers drive Face­book sales, writes Matthew Field and Han­nah Boland ‘The worry is it’s a bush­fire that will spread. Right now, it should be about stem­ming the bleed­ing in terms of ad­ver­tis­ers leav­ing’

The Daily Telegraph - Business - - Front Page - By Lau­rence Dodds in San Fran­cisco

FACE­BOOK’S boy­cott cri­sis deep­ened last night as brands such as Ford, adi­das and Ree­bok re­vealed they would with­hold ad­verts on the plat­form.

At least 184 com­pa­nies have now joined the protest against Face­book’s mod­er­a­tion poli­cies, ac­cord­ing to the ac­tivist group Sleep­ing Gi­ants, in­clud­ing some of its big­gest cus­tomers.

Ree­bok, adi­das, Levi’s and the US clean­ing com­pany Clorox have frozen spend­ing, in some cases for as long as six months.

Mi­crosoft had al­ready done so in

May, ac­cord­ing to re­ports. At the week­end, drinks gi­ants Di­a­geo – which pro­duces Guin­ness – and Star­bucks said they would be sus­pend­ing ad­ver­tis­ing on the plat­form.

A spokesman for Ford said: “The ex­is­tence of con­tent that in­cludes hate speech, vi­o­lence and racial in­jus­tice on so­cial plat­forms needs to be erad­i­cated.

“We are ac­tively en­gaged with in­dus­try ini­tia­tives led by the As­so­ci­a­tion of Na­tional Ad­ver­tis­ers to drive more ac­count­abil­ity, trans­parency and trusted mea­sure­ment to clean up the dig­i­tal and so­cial me­dia ecosys­tem.”

Face­book has at­tempted to head off the cri­sis by an­nounc­ing new curbs on hate speech in po­lit­i­cal ad­verts.

Many boy­cotts in­clude Face­book’s sis­ter ser­vice In­sta­gram. Some have also been tar­geted at its ri­val Twit­ter.

An ad­ver­tis­ing boy­cott of Face­book has at­tracted some of the world’s big­gest brands, and even mem­bers of the Royal fam­ily. Al­most 200 com­pa­nies have pledged to stop ad­ver­tis­ing spend­ing on the so­cial net­work. The cam­paign, led by “Stop Hate for Profit”, is push­ing for hate speech to be re­moved from the site and has gained the pri­vate back­ing of the Duke and Duchess of Sus­sex.

The big­gest ad­ver­tis­ers join­ing the boy­cott ac­counted for just un­der $245m (£200m) in Face­book ad­ver­tis­ing last year, ac­cord­ing to an­a­lyst firm Path­mat­ics.

Last week, it gained sig­nif­i­cant mo­men­tum as Unilever, Coca-Cola and Ver­i­zon said they would cut so­cial me­dia ad­ver­tis­ing.

Over the week­end, drinks gi­ant Di­a­geo and Star­bucks joined the boy­cott, and yes­ter­day the wave con­tin­ued, as Mi­crosoft, Ford, Adi­das and Ree­bok were added to the list of com­pa­nies paus­ing spend­ing on Face­book.

“The worry is it’s a bush­fire that will spread,” says Dan Ives, an an­a­lyst at Wed­bush. “For Face­book and Mark Zucker­berg, right now, it should be about stem­ming the bleed­ing in terms of ad­ver­tis­ers leav­ing the plat­form, and mak­ing sure it’s tem­po­rary and not longer term.”

This might prove a tough task. The cam­paign, set up by Amer­ica’s an­tiRight wing pres­sure group the Anti-Defama­tion League, is ap­peal­ing to com­pa­nies out­side of the US to fol­low suit and cut ties with Face­book, at least for July.

All this comes in the wake of Black Lives Mat­ter protests, and in par­tic­u­lar a back­lash against Face­book’s de­ci­sion to leave a con­tro­ver­sial post by US pres­i­dent Don­ald Trump on­line.

Yet the “Stop Hate for Profit” cam­paign goes fur­ther than this in call­ing for change. There are other gripes, such as Face­book al­low­ing Right-wing pub­li­ca­tion Bre­it­bart to be con­sid­ered a “trusted news source”. It has set out a se­ries of “rec­om­mended next steps” for Face­book.

There is a risk for Face­book that such a cam­paign could snow­ball, af­ter years of wran­gling be­tween tech firms and ad­ver­tis­ers about how their ads ap­pear along­side con­tent. “Af­ter all, it will ul­ti­mately be ben­e­fi­cial for them to get so­cial me­dia firms to sort their plat­forms out as well,” says one ad­ver­tis­ing vet­eran. Zucker­berg ap­pears rat­tled. Last week, he made moves to pla­cate the re­bel­lion, hold­ing calls with top ad­ver­tis­ers and civil rights groups in a bid to re­store or­der.

On Fri­day, Face­book an­nounced it would be in­tro­duc­ing fur­ther bans on racist ad­verts, in par­tic­u­lar a loop­hole that al­lowed ads that claimed spe­cific races, gen­ders or other pro­tected char­ac­ter­is­tics pre­sented a threat.

Yet, it might not be the larger ad­ver­tis­ers who are mak­ing Zucker­berg ner­vous. Af­ter all, those com­pa­nies who have pulled spend­ing are un­likely to make a dent in Face­book’s top line.

Just last quar­ter, the so­cial me­dia gi­ant made $17bn in rev­enue, more than 20 times Twit­ter’s first-quar­ter rev­enue. Over the month of July, the com­bined ad­ver­tis­ing boy­cott would amount to a hit of just over $20m, based on Path­mat­ics’ data.

The vast ma­jor­ity of Face­book’s rev­enue, in fact, comes from a “long tail” of small and medium sized firms that are un­likely to aban­don Face­book.

Colin Se­bas­tian, an an­a­lyst at Baird who mon­i­tors Face­book, says the com­pany has “about 8 mil­lion ad­ver­tis­ers”, and just 150 have chosen to boy­cott the so­cial me­dia firm.

“Their bread and but­ter is small and medium sized busi­nesses. If (or when) this ‘long tail’ of ad­ver­tis­ers joins the boy­cott, I would be more con­cerned about the po­ten­tial fi­nan­cial im­pact on Face­book and other so­cial me­dia.”

Right now, this does not look on the cards. One smaller com­pany that ad­ver­tises on Face­book said it couldn’t imag­ine waves of SMEs fol­low­ing suit.

“If you’re a smaller busi­ness, I don’t know how Face­book wouldn’t be in your reper­toire,” they said. “There’s noth­ing else which can tar­get at that level that Face­book does with such con­sum­mate ease.”

Its reach is in­dis­putable. The so­cial net­work has a huge user base across mul­ti­ple chan­nels – be it via its Face­book site, or In­sta­gram, or What­sApp. Dur­ing the Covid-19 pan­demic, Zucker­berg has said around 3 bil­lion peo­ple were us­ing at least one of its apps. If brands want to be “so­cial”, ex­perts say, there are very few other av­enues to do so other than through

‘Do brands use this as an op­por­tune mo­ment to go, we’re spend­ing less any­way post-Covid, this would make us look pretty good?’

Face­book. For now, the reliance of such com­pa­nies on Face­book to reach their cus­tomers may pro­vide some sup­port to Zucker­berg. In the longer term, there are those who say he shouldn’t be too con­cerned.

Af­ter all, how com­mit­ted larger firms are to “Stop Hate For Profit” re­mains to be seen. Com­pa­nies were al­ready rein­ing in spend around Covid-19 any­way, one in­dus­try ex­pert says. “Do brands use this as an op­por­tune mo­ment to go, we’re spend­ing less any­way post-Covid, this would make us look pretty good? I don’t know.”

Michael Hewson, at CMC Mar­kets, says there is some truth in this. While it is “prob­a­bly a mi­nor­ity view”, he says, “a lot of it may be virtue sig­nalling”.

Face­book may ap­pear at risk now, with the back­lash against the so­cial net­work site ramp­ing up and a seem­ingly Her­culean task ahead of it to re­gain trust. But, if the past decade showed any­thing, with Face­book fac­ing Cam­bridge An­a­lyt­ica and the DeleteFace­book cam­paign, it is that it may be too soon to write the firm off.

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