Facebook ad boycott wipes billions off market value
June 30, 2020 - Facebook faces a growing boycott by advertisers unhappy with its handling of hate speech and misinformation. The rising tally is creating peer pressure on other brands to join the boycott.
Starbucks, Diageo, Pfizer and HP joined Unilever, Coca-Cola and Verizon, pledging to cut ad spending. Microsoft -- the social networking service’s third-largest advertiser in 2019, spending an estimated $116 million -- has paused global ad spending on the site because of concerns about ads appearing next to inappropriate content. Britvic, Patreon Inc. and The Clorox Co. all said they would stop advertising on Facebook while auto-maker GM said it’s “reviewing and reinforcing” its marketing policies.
Civil rights groups launched the campaign following the death of George Floyd, an unarmed Black man killed by Minneapolis police on May 25.
While these advertisers include big-name brands, they aren’t necessarily the biggest spenders on Facebook, according to marketing analytics company Pathmatics.
However, the growing campaign did not appear to trouble investors on Monday, as they sent Facebook shares up more than two per cent.
Facebook’s fall in stock price had wiped out $61.5 billion in market value since June 23 and shaved the net worth of Chief Executive Officer Mark Zuckerberg around $8bn, according to Bloomberg Billionaires Index.
Facebook generated $17.7bn in revenue in the first quarter, including $17.4bn from advertising. Civil rights groups say they expect more corporations to join the boycott, as peer pressure rises.
The current boycotts around Facebook’s hate speech policies and Zuckerberg’s lack of action on misinformation could cost more than $250 million in the third quarter if 25% of its top 100 buyers pull spending, according to Bloomberg.
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