Facebook Will Lose No Power With This Boycott
And those advertisers are definitely not coming to publishers...
I admire a good boycott. It’s the constitutional right of us Americans to protest and boycott when we believe the right thing is not being done. The recent boycott of Facebook is no different. Brands are stepping up and yanking their advertising from Facebook, believing that their dollars will have an impact on the business.
This is the market attempting to regulate a perceived bad actor. It’s good to see brands trying; however, like every boycott before it, it’s not going to make a different to Facebook. After paying some lip service to changing things, Facebook will continue with how it operates and the vast majority of those advertisers will be right back.
The Stop Hate for Profit campaign is attempting to encourage Facebook to make a variety of changes. The full list can be seen here. In an effort to get Facebook to act, the campaign encouraged brands to stop spending in July. Their message is simple:
Let’s send Facebook a powerful message: Your profits will never be worth promoting hate, bigotry, racism, antisemitism and violence.
Some small brands kicked off the process, but it started to gain steam when The North Face announced that it would no longer be running ads on Facebook for the month of July. A few other brands followed soon after and, since then, it has been quickly cascading. Major brands like Coca Cola and Unilever have all pulled their marketing budgets from Facebook.
According to Felix Salmon at Axios:
Agencies have been reconsidering their social-media spending for years. Procter & Gamble cut $100 million from its digital marketing spend in 2017 and said it saw "little impact on its business," while Adidas admitted last year that it had "over-invested" in digital.
It's normally impossible for an agency to persuade a client to turn off social entirely, even if they would love to do that just to see what effect it has. But when turning off social comes with an easy PR win, while staying on Facebook is a PR loss, then the conversation becomes a lot easier.
Two primary things to look at here. First, nothing is done altruistically. Why take the bad PR hit when you can earn plenty of free publicity for participating? Secondly, it’s easy to cut the budget and track what happens. If your business suffers, then you just start again. And if nothing happens, congratulations, you’ve saved a ton of money for your business.
Nevertheless, 400 major advertisers pulling their budgets certainly has to sting for Facebook, right? Unfortunately, it doesn’t. It stings about as much as a paper cut. Sure, it really hurts, but it doesn’t actually do any long-term damage to the business. Here’s why…
First, it’s only a month; and it’s not even a month that actually matters. Advertising budgets start slowly because it’s the beginning of the quarter and the 4th of July.
Second, these major advertisers aren’t Facebook’s most important clients. And here’s where it gets interesting. CNN reported last week on the scale of Facebook’s ad business.
Facebook has 8 million advertisers, it said earlier this year. Of those, the highest-spending 100 brands accounted for $4.2 billion in Facebook advertising last year, according to data from marketing research firm Pathmatics -- or only about 6% of the platform's ad revenue. The last time Facebook shared that data itself was in April 2019, when COO Sheryl Sandberg said the top 100 advertisers represented "less than 20%" of total ad revenue.
And that’s the real thing here… For the millions of small advertisers, Facebook is the primary game in town. Targeting people by geography gives advertisers the ability to find the right people, reduce the cost per acquisition and, likely, increase ROI.
Additionally, the ease in which a new campaign can be spun up really is quite impressive. As I wrote a few weeks ago (paid):
I think this [self-serve] is critical for local publishers because it introduces the opportunity for businesses to advertise in an easier way. If I’m a lawyer working in that city, I can spin up a Facebook or Google ad quickly. On the other hand, many of these publishers make it difficult to advertise. These geographic publishers should be spending time thinking about how to engage local businesses. Their ad buys may not be large, but because it’s self serve, there’s no need to manage it from a sales perspective.
Every single one of Facebook’s users tells the platform where they live, so it is brain dead simple to find the right people for your offering. Additionally, if you only want to spend a few hundred dollars a day—versus the thousands required for TV or print advertising—Facebook is perfect for you. What small business is going to cut off their primary advertising channel for that?
To make matters worse, the CMO role has never been a particularly safe one. According to a report by Spencer Stuart:
What this chart is showing us is the average time a CMO holds their position. However, Spencer Stuart rightfully started tracking median because outliers can warp averages. In 2018, it was 27.5 months that the average CMO kept their job. Let’s say that a CMO decides they’re going to withhold their advertising for the entire 3rd quarter. That’s 11% of the average tenure of their job. If the boycott hurts their business, replacing the CMO is the easiest thing that can be done.
All of this is to say that I don’t believe the boycott is going to matter all that much to Facebook in the long-term. That said, brands can take the little victories. Facebook did agree to a brand safety audit, which is one of the things the Stop Hate For Profit campaign was pushing for. According to Adweek:
The announcement comes as a number of brands have said they will take their advertising dollars elsewhere this month and generally reexamine their social media spends over what they characterized as the social network’s inaction against violent and misleading messages.
Facebook said its “partner and content monetization policies and the brand safety controls we make available to advertisers” will be reviewed by the Media Rating Council (MRC), a nonprofit that certifies the reliability of audience measurement services.
The council has tried to convince the social media company to submit to an evaluation based on MRC’s brand safety standards, which were introduced in 2018. But Facebook only agreed to the audit in recent days, according to David Gunzerath, svp and associate director of MRC.
It’s good lip service, but I would wager by September, we’ve moved onto something else and most of the major advertisers that pulled their budgets will be right back to spending on the platform.
Now… Before publishers get excited and assume that the brands are going to come running to work with us, let’s not forget that our ad products still suck. Why would someone want to go from a targeted, native advertisement like Facebook’s to a general, non-targeted 300x250?
This tweet by Rameez sums up my thoughts on that:
You’ll notice it takes getting to #4 for a digital outlet to get money and, even then, Rameez qualifies it by adding “that work” at the end of it. Facebook provides incredible tracking so you know exactly how well your campaigns are doing. The targeted publications that can provide campaigns that perform might get some marketing budget.
But for many publishers, the products just aren’t good. Until they are good, advertisers have plenty of other opportunities where they can spend their money. It’s a paid piece, but if you’re a local newspaper, I encourage you to subscribe and read this essay.
And before any of us try to get on our high horses and suggest that advertisers should “do the right thing” and advertise on our websites, we shouldn’t forget that we’re big customers of Facebook as well.
According to this piece by Digiday:
Facebook is a top driver of subscriptions because of its unrivaled scale, ease of use and precision targeting making it ideal for direct response-driven advertising. During the economic and ad downturn, it’s only become more important in the hunt for revenue.
It’s clear to see why publishers advertise on Facebook, even if they say they don’t like it very much. Cost-per-customer acquisition for the publishers that consultancy The Sterling Woods Group works with is usually between 50% and 100% of the cost of the year-one subscription price, according to CEO Rob Ristagno.
If you’ve read A Media Operator over the past few months, you’ll know I’ve been advocating for publishers to spend on Facebook. With CPMs dropping and advertisers having to pull budgets because of COVID, it was a great opportunity to get more bang for your buck.
The reality is, we’re as hooked to the incredible targeting as everyone else is. So long as we’re all hooked to it, Facebook will only need to change as much as it wants to. There’s nothing a boycott can do about that, unfortunately.
Thanks for reading. If you have thoughts, please let me know. As always, consider sharing this piece with your colleagues. And if you are not already a paying subscriber, consider joining the community. Thanks and have a great week!