Coca-Cola to Unilever, these big brands are boycotting Facebook ads
Facebook is heavily reliant on a revenue model where it shows personalized ads from brands and generates money from the businesses for providing ad space and the resulting traction. However, in the last week or so, the company has been losing a lot of money with several big brands deciding to pull out of the company's ad platform. Here's all about them.
First, why brands are quitting Facebook ads?
On June 17, six civil rights groups, including the NAACP and Anti-Defamation League, launched the 'Stop Hate for Profit' campaign and called upon large companies to halt advertising with Facebook in response to its mishandling of racism, hate speech and violence. "Let's send Facebook a powerful message: Your profits will never be worth promoting hate, bigotry, racism, antisemitism, and violence," the campaign's organizers said.
They are not choosing to act, the organizers added
While urging businesses to boycott Facebook ads, the organizers emphasized Facebook could absolutely protect and support Black users, call out Holocaust denial as hate, and help people get out to vote, but "they are actively choosing not to do so."
Since then, several advertisers have quit Facebook ads
Ever since the campaign started, over 90 different advertisers have expressed their support and pulled out of Facebook's advertising platform for different periods. Most of them are small businesses that will not put a drastic dent in the social network's business, but a couple dozen of them are big, highly popular brands, and they are creating major problems for the Mark Zuckerberg-led company.
Which are these companies?
The well-known brands that are participating in the boycott campaign are Unilever, Verizon, Hershey's, Honda, The North Face, Ben & Jerry's, Upwork, Levi's, Dockers, and Diageo. Beyond that, Starbucks (the sixth-largest advertiser on Facebook), Coca-Cola, REI, Patagonia, Eddie Bauer, Mozilla, Magnolia Pictures, Birchbox, Dashlane, TalkSpace, LendingClub, JanSport, Eileen Fisher, Beam Suntory, Arc'teryx, and lululemon have also halted advertising in light of the matter.
Facebook's market value, Zuckerberg's net worth dipped
The action from the brands, particularly the big ones, directly affected Facebook's share-price and wiped out a whopping $56 billion from the company's market value, Bloomberg reported. And, the impact did not even spare Zuckerberg who alone lost $7.2 billion from his total net worth. It pushed his wealth down to $82.3 billion, leaving him as the fourth-richest in the world.
Changes floated as corrective measures
Given the circumstances, Zuckerberg announced a series of policy changes on Friday to appease Facebook advertisers. This included the promise to ban false posts related to polling conditions, ads claiming that people from a specific race, ethnicity, religion, sexual orientation, or immigration status are a threat, and to add warnings to politicians' posts that may be violating its policies.