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AS THE BRAND BOYCOTT GROWS, WHAT'S NEXT FOR ADVERTISING ON FACEBOOK?
Facebook heads into July with a growing number of brands pausing advertising spend on the platform. Over this weekend, Unilever and Starbucks added their name to the growing list of large brands who say they are going to pull advertising spend from the platform. A campaign that started in the US is now reaching global ad budgets.
Part of campaign against how Facebook moderates controversial comment and content on its platform, brands are pausing advertising for anything from a month to the entire run-up to the 2020 Presidential Election in November. Some brands are going further and pulling advertising from all social media platforms between now and November. Reflecting, perhaps, the anticipated nature of the campaign in the US over the next few months that will be played out on these very social networks.
Of course advertiser boycotts are not new. In recent years, YouTube was subject to a significant boycott with advertisers concerned about the content their ads were being played before. In the UK a boycott of some news media has also got traction with some brands.
But how big of a deal is this for Facebook?
1. Big names, but big spend?
Each individual advertiser that pulls spend from Facebook is a loss of revenue that Facebook does not want. But whilst the likes of Unilever, Coca-Cola and Starbucks are big buyers of advertising, these large advertisers make up a smaller proportion of Facebook’s ad income.
Facebook makes about $70bn a year from advertising, the majority from a a huge number of small and medium-sized businesses each spending a relatively small amount of money (indeed it is cited for the loss of revenue from classified advertising in newspapers). Large advertisers make up less than a third of their ad income. So losing some of these, whilst significant, does not impact the base of small businesses that make up Facebook’s revenue.
But the power of big names is the news coverage they bring, and the impact that has on perceptions of Facebook in the public and in the City. Indeed, during last week, Facebook’s share price fell by about 10%. So whilst this may not have as big an impact on Facebook’s revenue as might be expected, it exposes the questions and issues about content moderation and can have an impact on the share price.
2. A boycott, or just stopping ad spend?
If brands stop spend but continue to post and engage audiences with organic content, is this really a boycott? Many of the brands on the list, such as Ben and Jerry’s, continue to post organic content – promoting products and driving action on issues they care about. They have not left the platform, but their ad money has.
This could be seen as something as a contradiction – if you want to boycott the platform, why continue to produce content that helps to drive usage of the platform?
Or it could show a more complicated interpretation of this action. Undoubtedly, brands are pulling advertising spend as a way of aligning themselves with the debate about content moderation. And undoubtedly this revenue loss will impact Facebook. But as we continue to live through a global pandemic, with the economic impact hitting brands, we would expect brands to review their overall ad budgets and (in many cases) cut this spend. Cutting Facebook provides them with a way of both showing their commitment to a cause and cutting spend on a channel that they might have been questioning in any case.
3. But what is the evolving role of brands on Facebook?
Because the role of Facebook for brands continues to change. The rise of more private places for people to communication – of Messenger and WhatsApp – as well as more content-rich experiences such as TikTok, should force brands to re-evaluate the role that these channels play in the advertising and content strategies.
If it is harder to reach people who have retreated to private spaces then what is the role of advertising on Facebook news feeds – it could be seen as becoming more programmatic in nature, closer to display advertising than richer, more engaging content that people discover as they are consuming other content from friends and organisation they follow. Instead, brands need to establish how they can get their brand into discussions in these private spaces. They need to develop richer content ideas that truly engage people – on Facebook or on platforms like TikTok. So does advertising on Facebook’s newsfeed have less value for some brands?
4. Will brands notice when they cut spend?
So, it is undoubtedly true that these brands want to align themselves with campaigns about content moderation on Facebook, and also that they might not want to be alongside the expected increasingly difficult debate on the platform in the run up to the 2020 Presidential Election in the US.
But this boycott also gives them an opportunity to evaluate the impact that Facebook has on their advertising effort – if they switch off advertising for a month, or a few months, do they notice a difference? Where is this difference and can the use it as an opportunity to interrogate and then plan a more nuanced role for Facebook as part of their advertising plans moving forward.
Because as use of social media changes and goes more private, and the debate about content moderation rages, the question of the benefit and the role of channels for advertisers is brought to the fore. This boycott gives us a good opportunity to see what impact advertising can have for these brands here, and how the role they play in the advertising mix might change as we move forward.
After collaborative efforts achieved so much during 2020, Engine’s CSO argues the industry should work together to bring about change.