Facebook Inc. CEO Mark Zuckerberg has finally agreed to join a meeting with the civil rights groups behind the #StopHateForProfit ad boycott of Facebook, which aims to get the company to institute stronger measures against hate content.
However, internally, he indicated that the financial aspects aren’t particularly significant, that advertisers’ return is likely just a matter of time, and that the company will not change its policies in response to such pressure, according to The Information, citing what it says is a transcript of Zuckerberg’s remarks at an in-house video town hall meeting last Friday.
Zuckerberg reportedly said that the boycott is more a “reputational and partner issue” than an economic one, and that his “guess” is that “all these advertisers will be back on the platform soon enough.”
Zuckerberg “noted that large advertisers participating in the boycott make up a small portion of Facebook’s overall revenue, and he said, ‘We’re not gonna change our policies or approach on anything because of a threat to a small percent of our revenue, or to any percent of our revenue,'" according to the report.
DND has reached out to Facebook Inc. for comment on The Information’s report, and will update this article if the company replies.
Meanwhile, in an analysis of the boycott’s possible financial ramifications, The Wall Street Journal points out that Facebook, which has more than 8 million mostly small and mid-sized advertisers, “is unlikely to take a substantial financial hit unless the boycott becomes far more expansive and companies carry it out for a very long time."
As of yesterday (July 1), just eight of Facebook’s largest advertisers had paused advertising on the platform, the analysis notes. Together, those advertisers — Microsoft, Starbucks Unilever, Hershey, Diageo, Pfizer, Clorox and Target — spent an estimated $57.4 million on Facebook and Instagram in May, compared to an estimated $529.6 million in Facebook ad spend by all 100 of its top advertisers.
Even in the unlikely event that all of Facebook Inc.’s top 100 advertisers boycotted both Facebook and Instagram for a full year, it would amount to revenue hits of 18.6% in North America and 9% globally, WSJ estimates.
Politico’s Jack Shafer goes further, suggesting that, like Google’s YouTube after content-driven advertiser boycotts in 2017 and 2019, Facebook Inc. will emerge bigger and stronger from the current boycott.
“By reducing Facebook’s $70.7 billion in annual revenues, even by a tiny bit, corporate bosses get to flip off the advertising business at relatively little cost to themselves — or, really, to Facebook,” Shafer writes, noting that July is an historically low sales month, and on top of that, this boycott is occurring during a quarantine and a recession.
According to analysts, “the loss of annual Facebook revenue from the July boycott might be as low as 5%,” Shafer adds. “Every Fortune 500 advertiser on Facebook could plummet into a volcanic fissure, and the company would still be minting gold.”
Further, the company’s stock has already rebounded from recent days’ losses driven by bad publicity surrounding the boycott, Shafer notes. (The stock rose 5% on July 1.)
Shafer predicts that Zuckerberg, as YouTube did, will “bend, apologize and make promises about better future conduct as he customarily does when facing a PR crisis. He’s already stooping to the current boycott, labeling iffy but newsworthy content that violates its standards (such as some Trump posts), deleting posts designed to suppress voter turnout, and yanking ads that make calls to violence or express overt racism (although some of his accommodations appear to have been in the works before the boycott commenced).
“When Facebook emerges from today’s boycott bigger and stronger, you’ll have the right to ask if the whole thing wasn’t a Facebook conspiracy from the beginning,” he concludes.