Verizon has joined the growing boycott against Facebook and Twitter, in a July 2, 2020 story. (Photo by THE ASSOCIATED PRESS)

Social media companies face revenue hit from boycotts

#StopHateforProfit campaign continues

Verizon’s decision to join the growing boycott against Facebook and Twitter risks hurting the social media giants where it hurts most: their advertising revenue.

Advertising accounts for nearly all Facebook’s $70.7 billion annual revenue, and a similar share of Twitter’s $3.46 billion. Both already faced declining ad spending as big advertisers like Ford and Coca-Cola cut their budgets amid the pandemic and recession.

The #StopHateforProfit campaign launched June 17 by the Anti-Defamation League, the NAACP and other advocacy groups seeks to pressure the social media giants into doing more to curtail racist and violent content on their websites. So far, the campaign has signed on more than 200 companies and organizations.

Outdoor gear retailers Northface, REI and Patagonia were among the first companies to join the boycott. Patagonia said it made the move because the social media giant failed to take steps to stop the spread on its platform of “hateful lies and dangerous propaganda.”

But Verizon, which spent $3.07 billion on advertising in 2019, appeared to tip the scales for investors, who sent Twitter shares plunging 7.4% and Facebook shares sliding 8.4% on June 26 after it joined the boycott.

Facebook and its CEO Mark Zuckerberg have been the main targets of the boycott. But several large corporations are suspending all social media ad spending as the industry fumbles with how to maintain open platforms for expression while determining which posts contain hateful or offensive rhetoric and need to be flagged or deleted.

“We’re pausing our advertising until Facebook can create an acceptable solution that makes us comfortable,” New York-based Verizon said in a statement.

Coca-Cola and Starbucks are among the other consumer products titans to halt all their social media advertising. Large companies are protective of their reputations, and social media already presented them a delicate balancing act of exposure versus risk.

“We’re kind of going back to a much earlier mindset where advertisers seem that they are not comfortable advertising with user-generated content where they don’t have greater control over things that are said,” said Nicole Perrin, principal analyst at eMarketer.

Facebook and others have faced criticism for years for their hands-off approach to content. Facebook’s own employees publicly criticized Zuckerberg for leaving up posts by President Donald Trump that suggested police-brutality protesters in Minneapolis could be shot.

Facebook has faced criticism in the past over some of its practices, including the Cambridge Analytica data harvesting scandal, and its stock is normally resilient. Analysts expect the company to weather this controversy too, especially if the boycott is short-lived.

Perrin said the boycotts might not have much a financial impact for Facebook, considering its more than 8 million advertisers. Many of those advertisers are small operations that need social media exposure. The boycott movement could lead to large brands drastically scaling back their spending, however, or quitting social media companies completely.

Between the boycott and the pandemic, investors have a nearly impossible job trying to forecast Facebook and Twitter’s finances this year.

“We’re doing this in the middle of a pandemic where advertisers of all sorts are pulling back spending and cutting back costs where they can,” Perrin said. “We’ll never know how much of Facebook’s third-quarter results are due to the boycott or due to the pandemic.”

By The Associated Press

facebookracism

Get local stories you won't find anywhere else right to your inbox.
Sign up here

Just Posted

BREAKING: Ponoka kidnapping suspect at large, two others charged

Charges laid against three individuals after Sept. 7 incident

COVID-19: Central zone cases down to 32 Wednesday

No active cases in some central Alberta communities

PHOTOS: High School Rodeo action

AHRA D2 Battle River High School Rodeo was held at in Ponoka Sept. 12 and 13

Active cases down in central zone Tuesday

No active cases in some local municipalities

Notley to stay on as Alberta NDP leader for 2023 provincial election

The NDP took almost all of Edmonton but few seats outside of the city

B.C., Alberta sending nearly 300 fire personnel by Friday to help battle wildfires in Oregon

Some 230 firefighters, most from British Columbia but including a number from Alberta, will be deployed Friday

Death of mother grizzly a ‘big loss’ for bear population in Banff park: experts

The bear, known as No. 143, spent most of her time in the backcountry of Banff

U.S.-Canadian border closure reportedly could extend through November

The border between the two countries has been closed to non-essential travel since March 21

Threat of fall federal election eases as COVID-19 cases continue to rise

Congeniality emerged as fears of second wave of COVID-19 were heightened after another case increase

Intoxicated male arrested by Ponoka RCMP passes away after fall

Incident remains under investigation by ASIRT

Breton RCMP activate Search and Rescue to locate four overdue adults

Four adults found safely near the North Saskatchewan River.

‘Everything comfy’: Fashion brands drop heels, officewear to COVID-proof collections

Gone are the days when retailers would advertise formal wear, suits or gowns

Most Read