Advertisers struggle for power over Facebook as boycotts surge

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Advertisers struggle for power over Facebook as boycotts surge

It’s the same understanding that has made Facebook a central part of political campaigns. President Donald Trump and his alleged democratic challenger Joe Biden have spent over $ 65 million on Facebook ads together over the past two years, despite harsh criticism of the company.

Now, some corporate advertisers are committing to giving up the captive Facebook audience – at least for a few weeks or months – as they are under their own pressure to respond to heightened awareness of racial injustices and misinformation in US elections.

Still, the corporate brands that have announced Facebook boycotts are a fraction of Facebook’s $ 70 billion in annual advertising revenue, meaning that even the largest advertisers will struggle to set the terms. And Facebook’s massive bottom line provides enough cushion to achieve financial success.

“I haven’t seen a single example of an advertising boycott that has had a significant impact on the Internet,” said Mark Mahaney, who follows Facebook and other Internet companies at RBC Capital Markets. A boycott might be supported with sufficient support, Mahaney said, but he said it was unlikely even if Verizon and Unilever join the campaign. “In my opinion, Facebook’s policy of moderating as little content as possible is not controversial enough to trigger a widespread boycott of advertisers.”

Matt Rivitz, whose advocacy group, Sleeping Giants, helped organize the project Stop hatred for profit The boycott alongside Color of Change, NAACP and others admitted that advertisers are in a difficult position.

“There is now a lack of advertising opportunities,” he said. “There are only a few monopolies and it is really difficult to circumvent them.”. ”

Facebook’s Mark Zuckerberg announced certain changes to how the company will flag posts that violate its policies. “Facebook stands for giving people a voice, and that means in particular that people who haven’t had that much voice or power before can share their own experiences,” he said.

But these were in the works before the boycott and did little to reassure the organizers.

“What we saw in Mark Zuckerberg’s speech today is a failure to deal with the damage [Facebook] has affected our democracy and civil rights ”. Rashad Robinson, president of Color of Change, tweeted. “If that’s the answer he’s giving to large advertisers who are pulling millions of dollars out of the company, we can’t trust his leadership.”

“Our fight for justice on Facebook is far from over,” said Jessica González, co-CEO of Free Press.

Trump and Biden won’t let up on Facebook either, though they’re unlucky enough to get the company to change its policies. Trump continues to pound Facebook and other social media sites for alleged bias against him, and just last month abolished an executive order to contain them. Biden has meanwhile filed a petition asking Facebook to review political ads – something the company has so far refused to do.

Even though Facebook can handle the financial risk and political heat of the boycott, its reputation among advertisers and users is at stake. The changes Zuckerberg unveiled on Friday are part of an ongoing effort to curb divide reduction and stop suppression of voters who critics say have not gone far enough. The company said it removes almost 90 percent of hate speech before users report it.

Some organizers took Zuckerberg’s announcement, albeit modestly, as a sign of their collective power. “Strange what happens when brands start asking for more accountability.” Sleeping Giants tweeted in response to the news.

“There’s a pressure point here,” said Hany Farid, a professor at the University of California at Berkeley, who testified before the congress about misinformation. “It may not take forever, but if you can withhold 10 or 20 percent of sales for a few months, that would likely get someone’s attention.”

Some of the funds that companies withhold are substantial, if not bankruptcy, for Facebook. According to Pathmatics, a digital marketing researcher, Unilever spent $ 42.3 million on Facebook ads in the U.S. in 2019, and Coca-Cola spent $ 22.1 million.

And the company has contacted advertisers in the past few days to alleviate their anger. Facebook’s trust and security policy director Neil Potts admitted to the advertisers this week that the company has a “lack of trust”. according to the Financial Times. The Wall Street Journal reported on Friday that Zuckerberg and Chief Operating Officer Sheryl Sandberg contacted companies directly.

However, Facebook also claims that it is not bent by customer pressure. “We are not making any policy changes related to sales pressure,” Carolyn Everson, vice president of Facebook’s Global Business Group, told advertisers last weekend in an email. “We set our guidelines on principles rather than business interests.”

Everson said in a statement, “We deeply respect each brand’s decision” and will continue to eliminate hate speech and misinformation in elections.

The presidential campaigns also leverage. Despite their criticism, both continue to practice Facebook with money. Trump has spent $ 45 million and Biden $ 23.4 million only on their individual campaign Accounts since May 2018, according to the Facebook ad library. These numbers will only increase when the November election approaches.

Just last week, the Biden campaign bought ads on Facebook that criticized Facebook.

The Trump campaign is pushing supporters to their official app and competing social media platforms, especially an upstart named Parler who has few moderation guidelines. However, there is no evidence that ads on popular social media will be withdrawn.

Political advertising is a growing part of Facebook’s sales as more and more campaign ads go online. However, campaigns also have limited bargaining power. Politicians have few other ways to reach Facebook’s critical audience, particularly with alternatives like Google and Twitter that restrict or ban political advertisers altogether.

Neither campaign commented on the story, but their behavior reflects the fact that there are few places where advertisers can reach so many Americans, let alone target them based on their location, demographics, and interests. According to the research company eMarketer, Facebook has about 175 million users in the United States. It’s hard to resist this appeal, whether you’re selling coats or getting votes.

Senator Ted Cruz (R-Texas) announced this week that he has joined Parler, although he has no plans to leave Facebook, Twitter, or other major platforms, a spokesman noted.

Meanwhile, Democratic House spokeswoman Nancy Pelosi said advertisers at an event last week “have the power to stop platforms from amplifying dangerous and even life-threatening disinformation.” It has spent more than $ 2 million on advertising on the platform since May 2018, as records show.

The greatest power to influence Facebook policies still seems to be in the world’s capitals, including Washington, where regulators and lawmakers on both sides of the aisle are now questioning the business models that have enabled Internet companies to do so, with relatively few Checks to get so big.

Facebook’s dominance in the social media market has led to investigations by state and federal anti-trust authorities, some of which suspect that too much control over online language is a symptom of poor competition in the market. And more and more legislators are proposing laws to change the way social media companies regulate online language.

“There is pressure and advocacy here, which is important but will not solve the underlying problem. This will be resolved by regulators, “said Jason Kint, CEO of Digital Content Next, a digital media trading group that includes Disney, Condé Nast, and The New York Times.

Kint has been a fierce critic of the market power that Facebook and Google have amassed, and he said the advertisers’ complaints provide the anti-trust authorities with evidence that their size is real harm. Kint is not directly involved in the boycott, but was an avid online supporter and tagged companies like Coca-Cola, Nike and Under Armor on Twitter to urge them to participate.

Trump has tried to exercise executive power against social media companies. Signing of an executive ordinance last month to punish social media giants for allegedly shutting down conservatives, although it has already done so was challenged in court.

As part of the job, Trump began to prevent federal agencies from advertising on social media sites that are considered politically biased. But he pushed back liberals who tried the same pressure tactics and had a lot more dollars at stake. He recently told The Daily Caller that he did not support the boycott of the industry.

“It must be illegal in some way” said the president. “How can you allow that? This is really a takeover of the entire system. “

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