A boycott against Facebook (NASDAQ: FB), which began last month and saw several major brands pulling advertising from the platform, is intensifying as major Facebook advertisers join the boycott. Facebook lost billions in market value after shares tumbled for two days straight.
The boycott is part of the "Stop Hate for Profit" movement, which was launched by a coalition of rights groups, including the National Association for the Advancement of Colored People, Anti-Defamation League, and Color for Change. The movement was launched in protest of Facebook's lack of regulation and allowing disinformation and hate speech to proliferate on its platform.
The boycott quickly attracted several brands and companies, such as popular ice cream brand and longtime civil rights advocate Ben & Jerry's (parent company Unilever) (NYSE: UN) and outdoor clothing brand Eddie Bauer.
In the weeks since The North Face (parent company VF Corporation) (NYSE: VFC) became the first major brand to join the movement, many massive names in the business world have joined the ranks of advertisers that have pulled their ads from the social media platform. Many of these companies also happen to be among Facebook's top 100 advertisers.
The Coca-Cola Company (NYSE: KO), Facebook's 47th largest advertiser, pulled its advertising from the platform and joined the movement, joined by 33rd largest advertiser Honda Motor Company (NYSE: HMC), and 13th largest Ford Motor Company (NYSE: F), among others. Verizon (NYSE: VZ), Facebook's 10th largest advertiser, was among the companies that joined the movement in its first week.
Some companies, including Starbucks (NASDAQ: SBUX) and Microsoft (NYSE: MSFT), have pulled advertising from Facebook but have not joined the Stop Hate for Profit campaign.
The en masse exodus of many advertisers has put a dent in Facebook's reputation and has not done its share price any favors. Facebook's share price dropped for two days straight amid a slew of companies joining the boycott, leading to $60 billion in market value being erased. The boycott will not do lasting damage to the company's profits; however unless a far greater number of the company's advertisers join the movement. The company possesses 8 million advertisers, and rakes in billions of dollars of advertising revenue a year; the companies that have currently boycotted the social media giant only account for a small fraction of that revenue.
The pressure to meet the movement organizers at the bargaining table will likely not come from the immediate financial ramifications, but will probably come from the growing pressure for Facebook, and all social media platforms, to better police their content.
While the boycott is significant for the number of significant companies voicing their displeasure with the company's practices, dissatisfaction with Facebook and other social media sites as advertising platforms is nothing new. Concerns were raised after a bombshell report by the Times of London that brought attention to advertisements from major corporations appearing in online videos posted by terrorist organizations, as well as on websites operated by hate groups. More significant concerns were raised after the 2019 Christchurch mass shooting incident in New Zealand, in which the massacre was live-streamed on Facebook.
Many companies have taken issue with the propagation of disinformation, hate speech, and graphic content on social media platforms for years, but aside from a few isolated responses, no substantive action has been taken. The Stop Hate for Profit movement may have been the catalyst to motivate companies to act on this dissatisfaction and finally pressure social media platforms into better policing their content.
The sudden surge of pressure against the company finally seems to have rattled Facebook's resolve, as the company has announced it is willing to meet with campaign organizers. Facebook confirmed on July 1 that CEO and Co-Founder Mark Zuckerberg has agreed to meet with the coalition that organized the movement. The coalition has prepared a list of demands that it intends to pass on to Facebook, including hiring an executive with civil rights expertise, refunding advertising fees to companies whose ads have been shown alongside controversial content, and changing policies to prevent hate groups from using the platform.