Facebook’s boycott problems worsen as SAP, Microsoft and HP suspend ad spend, but it’s SMB activism that’s needed to get the message home

Summary:
Leading tech vendors have joined the July advertising boycott of Facebook, but it's likely to need a bigger army of SMB customers in revolt to make a real difference in this fight.

Facebook
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Leading enterprise tech firms are the latest to turn their backs on Facebook. Microsoft and HP have added their voices to the #StopHateForProfit advertising boycott, joining SAP, which flagged up its support last week.

They join hundreds of B2C brands in the global boycott of Facebook and other social media platforms, such as adidas, Clorox, Denny’s, French Connection, Mars, Patagonia, Pepsi, Target and Volkswagen among others. (You can check out a running list of boycotting firms here). 

The boycott campaign was launched by a coalition of US civil rights groups, including the Anti-Defamation League, the NAACP and Color of Change, in the wake of the killing at police hands of George Floyd last month. As outlined on Color of Change’s website, the campaign calls for Facebook’s advertisers to: 

...hit pause on ad spending for July 2020 so that we can show Facebook that enough is enough: Users and advertisers demand that Facebook address racism across their platforms.

Tech stand

For its part, Microsoft is estimated to have splashed out around $116 million in Facebook advertising last year, according to ad analytics firm Pathmatics, reportedly making it the third largest sponsor of the platform after Samsung and P&G. No formal declaration of support for #StopHateForProfit has been made to date - Axios quotes an internal Yammer message from Chief Marketing Officer Chris Capossela arguing that:

We’ve also learned from experience that it doesn’t help our customers, our media partners, or Microsoft to publicize our media spend strategy.

But in the same message exchange with a Microsoft staffer, the CMO says that the firm took its suspension decision back in May and has communicated to Facebook what changes in behavior and practices it needs to see put into action before it will consider revising its position. 

On the other hand, SAP’s decision has been made explicitly in support of #StopHateForProfit: 

SAP will suspend all paid advertisements across Facebook and Instagram until the company signals a significant, action-driven commitment to combating the spread of hate speech and racism on its platforms. In order for real, meaningful change to occur, we must recognize, acknowledge and address our own role in the systems that perpetuate systemic racism.

Meanwhile HP Inc states bluntly: 

HP is a purpose-driven brand and we expect all platforms on which we advertise to uphold responsible policies that prevent our ads from appearing alongside objectionable content, regardless of the source. We have expressed deep concerns to Facebook and are stopping US advertising on the platform until we see more robust safeguards in place.

What will be interesting to see here is how much pain such big brand defections cause Facebook. SAP, for example, isn’t one of the bigger ad spenders, but the bad optics of such a high-profile firm taking a stand and expressing disapproval is only likely to encourage others to take similar positions.  

It all adds more weight to the negative commentary against the firm, perhaps most most openly articulated by Salesforce CEO Marc Benioff and his persistent comparison between the firm and the cigarette industry to make the case for regulation. This past week, he’s renewed the criticism: 

[Facebook’s] highest values are not truth and trust. They don’t really care what the quality is of their content on their platform. That’s amazing to me. And you know, if your company values are not about truth [as] the highest value and most important thing to you in the business world is not about trust, I don’t have a lot of time for that.

Revolting SMBs

That said, with every big name involved in the boycott is keeping its options open - suspending rather than terminating ad budget for the time being to allow for a cleaning up of acts - there will be siren voices within Facebook arguing that while this is all hugely inconvenient and embarrassing in the short term, ultimately it’s a storm that can be ridden out  with some public mea culpa gestures and a private stiffening of nerves. 

As Drew Benvie, founder and CEO of social media consultancy Battenhall, frames it: 

This advertising boycott is largely confined, for now, to the month of July and geographically to the US. So on the face of it, this should all blow over before harming the social network too much, financially at least. But lost revenue isn't Facebook's biggest problem here. The reputational damage is hitting Facebook Inc's share price…Facebook will be looking to show it is doing the right thing, but not just for the big-spending corporate advertisers, as the long tail of SMBs who together spend vast amounts with Facebook too consider whether to join in abstaining from ad spend. 

And those SMBs do need to be factored in. Of the near $70 billion that Facebook generated from advertising in 2019, only $4.2 billion - or roughly 6% of total - came from the top 100 spending ‘big brands’. The overwhelming majority of business comes from ‘mom and pop’ outfits, small-and-medium sized businesses, the sort of advertiser that Chief Operating Officer Sheryl Sandberg goes out of her way to court and praise. Talking about Facebook’s response to COVID-19 recently, she said: 

In this very difficult time for SMBs, we're really focused on doing everything we can to help them survive and even thrive as they help transition online. SMBs are also a major part of our business going forward….All of the work we do to continue to allow targeting, all of the work we do to make the ads more personalized, all of the work we do to make free tools available, which is important for all the online businesses who use our free tools, - there are 140 million of them as well as the 8 million, who are our advertisers, and the funnel between those - that's the nuts and bolts of our business. 

If there's a revolt among those 'nuts and bolts' in relation to Facebook’s lack of action over offensive content on its platform, then that would seriously focus CEO Marc Zuckerberg’s attention. But how such a pushback would realistically scale is another question altogether.  Battenhall’s Benvie says:

It is the smaller advertisers that Facebook will be just as concerned about, as they account for the vast majority of brands that advertise on Facebook. While the precise number is a closely guarded secret, Facebook's total number of brands advertising grew to 8 million this year. If the ad boycott catches on amongst this long tail, the reputational and financial damage could be greater than it has been already.  

In order to stem the tide, Facebook needs to act fast to improve safety online. With the organisers of the boycott asking for Facebook to implement some fairly common-sense changes to its policies that will help stem radicalization and hate on the platform, the social network is really in the driving seat here.

Reaction 

So, what is Facebook actually doing in response to the boycotts? Following the earlier decision to slap a 'violent or graphic content' warning label on a Republican National Committee (RNC) election campaign video and the removal of online ads from the Trump re-election team that carried an inverted red triangle image, a symbol more commonly associated with the Nazis, there have been more public signs of stepping up to responsible policing of its platform.

The company yesterday announced it had removed 220 Facebook groups and 95 Instagram accounts linked to the anti-government extremist boogaloo movement, as well as a further 400 groups deemed to be tangentially associated with it. This was done on the basis that content therein violated Facebook policies on organized violence - Boogaloo activists have been accused by law enforcementl officials of using social media to plot the murder of a federal agent. But Facebook is pointedly not banning references to boogaloo, a slang term used by activists to refer to the coming of a second US civil war, posts relating to the movement can still be found. Have cake, eat cake…

But a seemingly beneficial side effect of Facebook’s highly-public crisis is that other social media platforms appear to have been spurred into action to prevent the same thing happening to them. Reddit, the user-moderated discussion board with more than 350 million users, took down two of its most notorious cesspools--r/The_Donald, a Trump-related subreddit that supports white-supremacist content and has more than 800,000 users, and r/ChapoTrapHouse, the subreddit for a popular podcast - as well over 2,000 other far-right and white-supremacist subreddits. Reddit co-founder and CEO Steve Huffman said in announcing the new content policy:

All communities on Reddit must abide by our content policy in good faith. We banned r/The_Donald because it has not done so, despite every opportunity. The community has consistently hosted and upvoted more rule-breaking content than average, antagonized us and other communities, and its mods have refused to meet our most basic expectations. Until now, we’ve worked in good faith to help them preserve the community as a space for its users—through warnings, mod changes, quarantining, and more…Though smaller, r/ChapoTrapHouse was banned for similar reasons: They consistently host rule-breaking content and their mods have demonstrated no intention of reining in their community. 

This is a change of tack. Reddit has long tested the boundaries of free expression (even to the point of once refusing to take down stolen nude photos), but CEO Huffman now seems eager to assure his users that the company has changed its ways:

We are committed to working with you to combat the bad actors, abusive behaviors, and toxic communities that undermine our mission and get in the way of the creativity, discussions, and communities that bring us all to Reddit in the first place.

Meanwhile, Alphabet-owned YouTube has taken down six channels associated with white supremacists, including David Duke, Richard Spencer, and Stefan Molyneux, permanently banning them from the site.  YouTube’s policy statement reads:

Our products are platforms for free expression. But we don't support content that promotes or condones violence against individuals or groups based on race or ethnic origin, religion, disability, gender, age, nationality, veteran status, caste, sexual orientation, or gender identity, or content that incites hatred on the basis of these core characteristics.

In a statement, YouTube says of the white supremacist sites takedowns:

We have strict policies prohibiting hate speech on YouTube, and terminate any channel that repeatedly or egregiously violates those policies. After updating our guidelines to better address supremacist content, we saw a 5x spike in video removals and have terminated over 25,000 channels for violating our hate speech policies.

And of course, Amazon’s live-streaming platform Twitch this week banned US President Donald Trump’s account for “hateful speech”, albeit temporarily. Among the offending flagged posts was a re-broadcast 2015 campaign event in which Trump issued allegations about Mexico sending drugs, crime and rapists over the border. The other was of his recent rally in Tulsa where he made racist remarks about a “very tough hombre” breaking into a woman’s house at 1am. A Twitch statement on its ban reads: : 

Hateful conduct is not allowed on Twitch. In line with our policies, President Trump’s channel has been issued a temporary suspension from Twitch for comments made on stream, and the offending content has been removed. 

My take

Today’s the day that the boycott should become visible on Facebook. According to various media reports and online back channel scuttlebutt, the past few days have seen senior Facebook execs hitting the phones in a bid to talk advertisers down from their public positions, while still insisting that Facebook policy will not be determined by anything so vulgar as a threat to revenues.  Good luck with that! As things stand, it’s going to be a long hot July for Facebook.