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

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

Sylvan Lake RCMP are looking for the identity of the suspect who stole from over 40 resident mail boxes. (Photo Courtesy of Sylvan Lake RCMP)
Over 40 mailboxes broken into at Sylvan Lake apartment building

Sylvan Lake RCMP are investigating the incident and searching for the identity of the suspect

File photo by Red Deer Advocate
Town Of Sylvan Lake temporarily lays-off 30 staff members

Thirty part-time staff members at the NexSource Centre have been laid off until January

Alberta’s chief medical officer of health, Dr. Deena Hinshaw, confirmed eight additional virus-deaths Monday afternoon including one in central zone. (Photo by Chris Schwarz/Government of Alberta)
Central zone up to 1,249 active COVID-19 cases

Red Deer sits at 257 active COVID-19 cases

Agriculture Minister Devin Dreeshen (Alberta government photo)
Innisfail-Sylvan Lake to receive $5,000,000 in Municipal Operating Support Transfer funding

MLA Devin Dreeshen breaks down the funding communities will receive from MOST

A logo for Netflix on a remote control is seen in Portland, Ore.,Aug. 13, 2020. Experts in taxation and media say a plan announced Monday by the government will ultimately add to the cost of digital services and goods sold by foreign companies. THE CANADIAN PRESS/AP-Jenny Kane
‘Netflix tax’ for digital media likely to raise prices for consumers, experts say

The government says Canadian companies already collect those taxes when they make digital sales

Gaming content was big on YouTube in 2020. (Black Press Media files)
What did Canadians watch on Youtube during isolation? Workouts, bird feeders

Whether it was getting fit or ‘speaking moistly,’ Canadians had time to spare this year

A teacher places the finishing touches on the welcome sign at Hunter’s Glen Junior Public School which is part of the Toronto District School Board (TDSB) during the COVID-19 pandemic in Scarborough, Ont., on Sept. 14, 2020. THE CANADIAN PRESS/Nathan Denette
Hindsight 2020: How do you preserve a year many Canadians would rather forget?

Figuring out how to preserve the story of the pandemic poses a series of challenges

Team Manitoba celebrate after defeating Team Ontario to win the Scotties Tournament of Hearts in Moose Jaw, Sask., Sunday, Feb. 23, 2020. Curling Canada wants Calgary’s Canada Olympic Park to be a curling hub for the season’s top events. THE CANADIAN PRESS/Jonathan Hayward
Calgary facility set to become curling hub during pandemic

Curling Canada has provisional approval for Calgary’s hub-city concept from Alberta Health

Ash and Lisa Van carry a freshly cut Christmas tree while wearing personal protective masks at a Christmas Tree Farm in Egbert, Ontario, Sunday, Nov. 29, 2020 THE CANADIAN PRESS/ Cole Burston
‘Everyone wants a tree and they want it now’: Christmas tree sales on pace for record

Anticipated demand for Christmas trees has sparked a rush by some to purchase more trees wholesale

A scene from last year’s Light the Night fundraiser at the Stettler Town and Country Museum. This year’s rendition is on a drive-through basis only, but it still promises to be a not-to-be-missed seasonal highlight. (Independent file photo)
Stettler Town and Country Museum hosts ‘Light the Night’

This year’s rendition is drive-through only, but will still prove to be a dazzling display

(Black Press File Photo)
Rimbey woman gathering Christmas gifts for seniors at Valleyview Manor

Margaret Tanasiuk says she doesn’t want anyone to feel forgotten on Christmas morning

Most Read