US telecoms giant Verizon has become the latest company to suspend advertising on Facebook, threatening to further damage the social media firm’s primary revenue stream after it has already taken a hit from the coronavirus pandemic.
On Thursday Verizon joined other companies, including Ben & Jerry’s, Patagonia and REI, in halting advertising across Facebook-owned platforms.
The boycott stems from a campaign launched by advocacy groups, including the Anti-Defamation League (ADL), the NAACP and Color Of Change, on Wednesday called “#StopHateForProfit”.
The campaign calls for Facebook to implement stricter policies on racist and hateful content and follows the firm’s handling of inflammatory posts from President Donald Trump.
Verizon suspended Facebook advertising after one of its ads appeared alongside a video from the conspiracy group QAnon, which the ADL described as “drawing on hateful and antisemitic rhetoric”.
“We have strict content policies in place and have zero-tolerance when they are breached, we take action,” Verizon’s chief media officer, John Nitti, said in a statement.
“We’re pausing our advertising until Facebook can create an acceptable solution that makes us comfortable and is consistent with what we’ve done with YouTube and other partners.”
In response to Verizon’s announcement, Carolyn Everson, vice president for Facebook’s Global Business Group, said: “We respect any brand’s decision, and remain focused on the important work of removing hate speech and providing critical voting information. Our conversations with marketers and civil rights organisations are about how, together, we can be a force for good.”
Facebook’s looming advertising problem
The #StopHateForProfit campaign, created in the wake of the George Floyd protests, comes at a difficult time for Facebook.
Hard-hit companies have been reducing advertising spend during the pandemic, threatening to impact the bottom line of the world’s second largest digital advertising platform.
In its first-quarter earnings, the company said it had experienced a “significant reduction” in demand for advertising.
Despite this, Facebook’s advertising revenue rose 17% year-on-year between January and March. But the language used by Facebook in its earnings report suggests the strong advertising growth in the first two months of the year masked a decline in March. This was the period when the World Health Organization formally declared a pandemic and lockdown measures in much of the world were introduced.
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The full impact of the pandemic on Facebook’s revenue will not be apparent until the firm reports its second-quarter earnings in July.
In the meantime, Verizon’s move threatens to compound Facebook’s advertising challenges. According to marketing analytics company Pathmatics, Verizon spent nearly $1.5m on Facebook ads and nearly $500,000 on Instagram between 22 May and 20 June this year.
Verizon’s decision does not harm Facebook solely from the direct revenue loss, either.
A company of Verizon’s stature making a public move may increase the likelihood of other advertisers to follow suit – particularly at a time of heightened corporate responsibility.
“When it comes to dealing with rampant hate and harassment, [Facebook] continues to come up short,” said an open letter by the ADL. “What are they doing with $70bn in revenue and $17bn in profit?” Their hate speech, incitement, and misinformation policies are inequitable.
“Their harassment victim services are inadequate. Their advertising placement’s proximity to hateful content is haphazard. And their ‘civil rights’ audit transparency reports aren’t helpful to the civil rights community.”