It turns out Zuckerberg was right that ad boycotts won't hurt Facebook that much financially

  • Major corporations including Coca-Cola, J.M. Smucker Company, Diageo, Mars, HP and CVS Health will continue pausing their ads on Facebook after the official end of a major advertiser boycott.  
  • Several advertisers announced various degrees of pauses to their social media advertising budgets in June, after a campaign called "#StopHateForProfit" called on advertisers to boycott Facebook for the month of July.
  • Though the movement may have hit Facebook reputation-wise, there doesn't appear to have been much of an impact on revenue, and Facebook expects growth to continue despite the boycotts.

Major corporations including Coca-Cola, J.M. Smucker Company, Diageo, Mars, HP, CVS Health and Verizon will continue pausing their ads on Facebook after the official end of a major advertiser boycott of the platform. 

Advertisers announced various degrees of pauses to their social media advertising budgets in June, after a campaign called "#StopHateForProfit" called on advertisers to boycott Facebook for the month of July. Some companies said they'd only pause ads on Facebook for July. Others said they'd do it through the end of the year. And others extended the pause to other social media companies like Twitter and Alphabet's YouTube. All in all, more than 1,000 groups and companies took part in the boycott, with the goal to pressure Facebook into taking more stringent steps to stop the spread of hate speech and misinformation on its platform.

Though the movement may have hit Facebook reputation-wise, there doesn't appear to have been much of an impact on revenue. Wedbush analysts said in a research note last week that they expected "minimal financial impact from brand boycotts," writing that given the duration of announced boycotts, the firm expected roughly $100 million of "near term brand revenue is at risk, representing less than 1% of [year-over-year] growth in Q3." 

In its second-quarter earnings report last week, Facebook listed the boycotts from major advertisers as a factor that would negatively impact its revenue this quarter. Yet the company said its year-over-year ad revenue growth rate in the first three weeks of July were in-line with its second-quarter year-over-year ad revenue growth rate of 10%, and that its ad revenue growth rate for the third quarter will be "roughly similar to this July performance."

In short, Facebook signaled to investors that the boycotts won't be a huge hit, and ad revenue will continue to grow despite the boycotts.

According to marketing analytics platform Pathmatics, the top U.S. 100 advertisers on the Facebook platform in July 2020 spent a combined $338.2 million, while the top U.S. 100 advertisers in July 2019 spent $389 million, though it should be noted many marketing budgets have also been slashed amid the pandemic.

But Facebook is increasingly less reliant on big spenders as its advertiser base grows. Last week, the company said its top 100 advertisers represented 16% of its $18.3 billion in total ad revenue in the second quarter, a lower percentage than a year prior. The company now says it has more than 9 million advertisers on its platform, mostly small businesses.

A Facebook spokesperson said the company doesn't supply data to Pathmatics, and the firm's estimates are "very limited." Pathmatics bases its data on a panel of Facebook users along with other sources.  

Facebook CEO Mark Zuckerberg didn't seem too perturbed by the boycott when speaking with employees in June, saying "[his] guess is that all these advertisers will be back on the platform soon enough," The Information reported in July. 

"We've invested billions of dollars to keep hate off of our platform, and we have a clear plan of action with the Global Alliance for Responsible Media and the industry to continue this fight," a Facebook spokeswoman said Monday. Last week, the company published a blog post outlining the company's actions on civil rights issues. 

The "Stop Hate for Profit" campaign, in an email to supporters last week, said the success of its campaign was "unmistakable" and that it "forced Facebook to make a series of concessions to long-standing demands of civil rights organizations," such as the creation of a senior role to oversee civil rights and a dedicated team to study algorithmic bias. But they said they still wanted to see more from the company. 

"To be clear, Mr. Zuckerberg has not yet approached the type of meaningful action that we want to see," they wrote. "The issue is not that Facebook just lags competitors in working systemically to address hate and bigotry on their platform. To use a favorite term of Facebook's leadership, Facebook's attitude towards seriously addressing how their algorithms push hate, violent conspiracy theories and disinformation is transparently 'inauthentic.'" 

Stop Hate for Profit said last Thursday that it sees the movement growing in Europe and in other areas and have "explicit commitments" from advertisers to participate in future pauses and new actions if they see fit. The organization didn't provide specifics in the letter on new advertisers joining the boycotts in Europe. They also said many companies said they aren't ready to return to Facebook's platforms.

Those companies include a number of high-profile companies. Here's a look at some of the companies that will continue to withhold advertising on Facebook and/or other social networks. 

  • American Honda said it will continue to evaluate Facebook's efforts to curb hate speech and has not resumed advertising thus far.
  • Beam Suntory said it was extending its U.S. boycott through August and would continue through the rest of the year if Facebook doesn't change policies sufficiently in the next month.
  • Unilever-owned Ben & Jerry's said in the U.S. it was stopping all paid advertising for products on Facebook, Instagram and Twitter for the rest of 2020. It said it would continue to run paid ads in support of its activism campaigns that focus on racial justice and equity and 2020 elections.
  • Coca-Cola, which said it would be returning to channels like YouTube and Microsoft's LinkedIn as of August 1, said it will continue pausing ads on Facebook, Instagram and Twitter globally, among other platforms. 
  • CVS Health, which originally said it would be pausing for at least 30 days, said its pause would remain in place as it continues "to define [its] go-forward strategy."
  • Denny's said it would not resume advertising on Facebook in August.
  • Spirits giant Diageo, which said it would be pausing paid advertising globally on "major social media platforms" beginning in July, said Monday its pause still stands. 
  • Consumer goods company Henkel said it will not "automatically resume our spending on Facebook and its platforms in the U.S. at the beginning of August, but will continue to monitor and evaluate the developments before we will take further actions." 
  • HP said following a review of its social media strategy globally and pausing its U.S. advertising on Facebook and Instagram, it decided to expand the policy globally for the rest of the year across Facebook, Instagram and Twitter. 
  • The J.M. Smucker Company also said it has not yet been satisfied that Facebook has put forth an adequate plan to eliminate hate speech and discriminatory content from its platforms. It will continue to pause global ad spend across all of Facebook's properties.
  • Marssaid its initial statement to pause paid advertising globally across news-feed based social media platforms, including Facebook, Instagram, Twitter and Snapchat, will stand as it continues to work with agencies, industry and social media partners "to make progress."
  • Verizon, which said in June it would be pausing ad spend on Facebook, told CNBC Monday the company is continuing its pause and staying in close contact with the Facebook team "as they work on a solution that makes us comfortable." 
  • Volkswagen said it will extend its boycott in the U.S. until negotiations lead to a "satisfactory result," but said it has seen progress in other regions. It said it will resume paid advertising activity in August in all regions except the U.S.

Some companies, when announcing their pauses, said they already planned to continue their pauses beyond just July. Unilever said it would be pausing Facebook and Twitter advertising through the rest of 2020; Clorox said it was stopping advertising on Facebook and Instagram through December and will shift its ad spend to other media; and Conagra said it would stop U.S. advertising with Facebook and Instagram through 2020. 

Other companies are resuming their spend on Facebook, though many said they plan to continue to review the platform on an ongoing basis. 

  • The North Face, which was an early company to join the boycott, said it has held "constructive conversations" with Facebook and intends to "resume its working relationship" with Facebook and Instagram in August. But it said it has also joined parent company VF Corporation to hold regular check-ins with Facebook evaluate their progress and "determine on an ongoing basis if they are a partner and platform that upholds our values."  
  • Dunkin' said it temporarily paused paid media on Facebook and Instagram last month to send a message that it expects all business partners to take a stand against hate speech, spreading misinformation. The company said it's resuming spending in August. 
  • Eileen Fisher said it plans to resume paid advertising on Facebook and Instagram in early August. "Along with our external agencies and partners, we will continue to monitor the conversation and shift our strategy if need be," a spokeswoman said.
  • Heineken, which said it paused Facebook and Instagram in July, said it's resuming advertising on Facebook platforms in August. The company said it had engaged in "detailed conversations with Facebook" and was "pleased to see their new commitments." 
  • Puma said the company would resume advertising with Facebook as of August 1, and said the boycott had led to "direct, positive discussions with Facebook." 
  • Vans, which is also owned by VF Corporation, said it's also resuming its working relationship with Facebook and Instagram in August. "While we are encouraged by the initial progress of the movement, we do recognize that change doesn't happen overnight," a spokesman said in a statement. 

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