With more than 160 major companies pulling their advertising from Facebook, traditional platforms like TV through to digital giants such as Amazon, TikTok and YouTube look set to benefit.

Mark Zuckerberg Facebook CEO regulation

Facebook: Suffering as more companies boycott advertising on their platform

Over the past fortnight, an advertising boycott against Facebook has rapidly gained momentum amid accusations that the social media giant has failed to tackle hate speech. 

Over 160 major brands, including Unilever, Verizon, Starbucks, Coca-Cola, Verizon and Levi’s have joined the boycott, which began last month after the Stop Hate for Profit Campaign called on advertisers to pause advertising on Facebook. 

The Stop Hate for Profit campaign started after coalition of six civil rights organisations that includes the Anti-Defamation League (ADL), the NAACP and Common Sense called on major corporations to halt advertising on Facebook during July, due to the platform’s “repeated failure to meaningfully address the vast proliferation of hate on its platforms.” 

Launching the campaign on June 17, the coalition said #StopHateforProfit 

“is a response to Facebook’s long history of allowing racist, violent and verifiably false content to run rampant on its platform.” 

Shares in Facebook fell around 10% as advertisers in the aftermath of the boycott, although at the time of writing its stock price has recovered. 

This rebound reflects the fact that much of Facebook’s ad revenue comes from small and medium-sized businesses, potentially insulating it from too much of a revenue shortfall from the boycott. Of the $69.7 billion that Facebook made in advertising revenue last year, the bulk is from local and online businesses. 

Facebook has also responded, pledging to take some action including labelling posts that are potentially harmful. However, it has stopped short of agreeing to remove all divisive content. 

Investors also recall previous advertiser boycotts against YouTube in 2017 and again in 2019. Neither lasted long, with YouTube’s ad revenue rising from $8.1 billion to $15.1 billion in the same years. 

Voting with their wallets 
Still, with a politically divisive US election looming in November, it’s likely that major advertisers will continue to withhold spend from Facebook and other social media platforms beyond July.  

Citing the “polarised election period in the US” Unilever said last week in a statement: “We have decided that starting now through at least the end of the year, we will not run brand advertising in social media newsfeed platforms Facebook, Instagram and Twitter in the US.” 

The consumer goods giant added that it would maintain its planned advertising investment by shifting its spending to other media. 

The big question now for many media owners is where big advertisers such as Unilever will spend instead.  

TikTok (Ascannio shutterstock)

Adverts: Many predict TikTok, YouTube and Amazon will assume a larger role

Source: Ascannio Shutterstock

Many advertisers, of course, have cut back on expenditure during the pandemic and will chose to simply reduce spend. 

However, it’s likely that YouTube, Amazon and TikTok will assume a larger role in many advertisers’ digital campaigns. 

The Wall Street Journal reported this week that backpack brand JanSport is shifting more of its back-to-school campaign to TikTok and YouTube. North Face plans to increase spend with Google and Pinterest. Outdoor company Eddie Bauer will redirect some money to tools that it already uses, such as Google and Amazon search. Password manager Dashlane Inc. said it will spend more on sponsored content, online display ads and social media platforms such as Pinterest. 

Turning on the TV ads 
Many companies are likely to explore TV advertising as a replacement. Thanks to heavier regulation, TV is regarded as a trusted and safe environment for brands – and far more so than social media. According to TV marketing body Thinkbox research, 42% of adults cite TV as the most trusted form of advertising, ahead of newspapers (13%), websites (9%) and social media (5%). 

Television advertising can also be targeted more effectively than ever, allowing brands to address specific types of consumers with their campaigns. Addressable TV advertising is showing signs of becoming increasingly popular with brands, and partly because of the higher degree of trust that consumers have for TV advertising.  

Internet Advertising Bureau (IAB) research published May – titled Covid’s Impact on Ad Pricing - shows that connected TVs have been the most resilient in terms of holding on to ad spend in the US during Covid-19, registering a 6% decline in advertising rates (CPMs) compared to desktop (-27%), smartphone (-28%) and tablet (-29%).  

It’s early days as yet, but rival platforms from TV through to TikTok will be looking to lure the ad spend lost by Facebook in July – and possibly beyond.