More than 150 companies have signed up for the #StopHateForProfit campaign and paused advertising on social media platforms, including Facebook, Instagram and Twitter. The campaign is targeting social media for making a profit from user posts that promote hateful behaviour. The companies joining the boycott include some of the largest brands in the world: Unilever, Coca-Cola, Verizon, Starbucks and Honda.
More than 150 companies have signed up for the #StopHateForProfit campaign and paused advertising on social media platforms, including Facebook, Instagram and Twitter. The campaign is targeting social media for making a profit from user posts that promote hateful behaviour. The companies joining the boycott include some of the largest brands in the world: Unilever, Coca-Cola, Verizon, Starbucks and Honda. Some of the brands announced a 30-day suspension while Unilever notably announced its intention to pause advertising with Facebook, Instagram and Twitter through to the end of 2020. Verizon has also put pressure on Facebook and said it will pause advertising until Facebook comes out with an acceptable solution that addresses the issue.
Facebook has acknowledged the concern and is teaming up with civil rights groups to develop tools, on top of its investment in artificial intelligence, to limit hate speech on its platforms.
This is yet another brand safety precaution taken by global advertisers to avoid being associated with offensive content and, in this case, divisive content that promotes hate in the wake of the #BlackLivesMatter anti-racist advocacy. It also marks the importance of global platforms’ reaction to such movements – failure to respond adequately is almost certain to negatively impact revenue, especially at a time when ad budgets are being curtailed across the board.
Facebook’s Q2 and Q3 advertising revenues under pressure
Facebook’s advertising revenues grew 27% to $70 billion in 2019; contributing 99% of the company’s total revenue. Omdia projects Facebook’s ad revenue growth to slow to 6% in 2020 in view of the ad boycott and the prolonged COVID-19 pandemic in the US. The US and Canada is the company’s biggest market, contributing to 48% of its total ad revenue in 2019.
The #BlackLivesMatters protest occurred amid the spread of COVID-19 which is already expected to impact Facebook’s Q2 advertising revenues. Even though it is unclear how long the boycott will continue and whether these advertising budgets will be rediverted elsewhere, it is certain that the company’s revenue growth will be impacted through Q3. Both Facebook and Twitter will also face considerable challenges throughout 2020 as the US elections – including the Presidential election – are likely to generate controversies focused on hateful content and freedom of expression.
Twitter has been proactively dealing with hate speech, thus less exposed to the boycott
Twitter has been more proactive in dealing with hate speech compared to Facebook. The divisions were apparent after Twitter started adding fact-check warnings and removing content posted by Trump while Facebook abjectly refused to do so. It also moved to remove all political advertising from the platform last year, with Facebook again refusing to take any similar action.
Advertising made up 87% of Twitter’s total revenue in 2019, with the remaining 13% of revenues derived from data licensing. Its Q1 2020 financial reports show advertising revenue increased less than 1% due to the pandemic, whereas data licensing grew 17% as companies continue to consume Twitter’s user data. We expect data licensing will take a bigger portion of the company’s revenue in 2020 in view of the vulnerability of advertising income against COVD-19 and the ad boycott.
Facebook and Twitter should lead the efforts to clean-up social media content
As the list of participating companies continues to expand and spread to wider geographies, leading social networks such as Facebook and Twitter will have to speed up their commitments to police hateful content on their platforms in order to regain trust. This should include further investment and utilization of artificial intelligence (AI). Facebook has made several investments in AI since 2017, including the acquisition of image recognition AI startup Ozlo in Q3 2017, natural language AI startups Bloomsbury AI in Q3 2018 and Grokstyle in Q1 2019.