By Sahil Patel and Nat Ives
Some advertisers that left Facebook Inc. for July to protest the
proliferation of hate speech on its platforms say they are coming
back, while the tech giant's financial outlook suggested the
boycott isn't taking a major financial toll.
VF Corp.'s North Face, arguably the first widely known brand to
join the campaign, said it would resume doing business with
Facebook in August. "We are encouraged by the initial progress and
recognize that change doesn't happen overnight," said a spokeswoman
for North Face.
Marketers including brewer Heineken, sportswear maker Puma SE
and spirits giant Pernod Ricard SA also said they would return to
Facebook.
Other brands said they would extend their planned July boycotts
into August at least, however, calling Facebook's moves
insufficient. They include packaged-goods marketer J.M. Smucker
Co., spirits maker Beam Suntory Inc., retailer Eddie Bauer LLC,
business-software company SAP SE and Boston Beer Co.
In June, civil-rights groups including the Anti-Defamation
League and NAACP asked marketers to pull ad spending on Facebook
and Facebook-owned Instagram for July, recommending 10 steps that
they said Facebook should take to reduce hate speech and
misinformation on its platforms. The steps included appointing a
civil-rights expert at the upper echelons of the company and
providing refunds to advertisers whose ads appeared next to
objectionable content.
Since the boycott began, Facebook said it would hire an employee
at the vice-president level to focus on civil-rights work. It also
agreed to a new audit by industry measurement watchdog the Media
Rating Council, expected to begin in August, that will evaluate the
rules publishers and creators must follow if they want to make
money from their Facebook content through ads, among other aspects
of Facebook's ads business.
"We've invested billions of dollars to keep hate off of our
platform, and we have a clear plan of action with the Global
Alliance for Responsible Media and the industry to continue this
fight," said a Facebook spokeswoman. The Global Alliance for
Responsible Media is a group of advertisers, media companies, tech
companies and others focused on improving safety standards online.
Facebook's commitments to GARM include adopting proposals regarding
the definition of hate speech and two outside audits of its
transparency reports and ad policies.
In a call Thursday afternoon to discuss second-quarter earnings,
Facebook Chief Executive Mark Zuckerberg said the company valued
all of its advertisers but wasn't dependent on major brands. Chief
Operating Officer Sheryl Sandberg said the company is working on
civil rights "not because of pressure from advertisers, but because
it is the right thing to do."
Facebook said ad revenue in the first three weeks of July, when
the boycott was in effect, increased at roughly the same 10%
year-over-year rate as it did in the second quarter. It cited the
boycott among the factors contributing to its performance in the
third quarter, along with economic uncertainty related to the
coronavirus pandemic and new restrictions on ad targeting.
Facebook had more than 9 million advertisers in the second
quarter, it said. More than 1,100 advertisers participated in the
boycott, according to organizers.
Jonathan Greenblatt, chief executive of the Anti-Defamation
League, said Facebook's decision to appoint a civil-rights leader
and its creation of teams to study and address potential racial
bias on its platforms proved that the "Stop Hate for Profit"
boycott campaign produced results.
While some advertisers may resume spending on Facebook, Mr.
Greenblatt said, the company still hasn't done enough and the
campaign will continue. "Ultimately, this movement will not go away
until Facebook makes the reasonable changes that society wants --
they have shown a willingness to do some of that," he said.
He said some advertisers agreed to join a future boycott if
required, though he declined to name them.
Beyond the North Face, two other VF Corp. units -- backpack
brand JanSport and sneaker marketer Vans -- also said they would
end their boycotts when July ends. All said they would hold regular
check-ins with Facebook about its policies and the content on its
platform.
A spokesman for Puma, one of the companies ending its boycott,
said the company was "encouraged by the progress that has been made
in regards to tackling hate speech, racism and discrimination on
Facebook's platform."
But Smucker, whose brands include Folgers coffee and Jif peanut
butter, and other marketers extending their boycotts said Facebook
hadn't delivered an adequate plan.
And advertisers that paused their Facebook spending for longer
periods or without a set return date, such as Unilever PLC,
Coca-Cola Co., Chipotle Mexican Grill Inc. and Verizon
Communications Inc., said they aren't ready to come back.
Coca-Cola, which pulled back from all social-media advertising
on July 1, said it was returning to YouTube and LinkedIn on Aug. 1
but not Facebook, Instagram and Twitter.
Verizon didn't join the "Stop Hate for Profit" campaign but
suspended Facebook and Instagram ads in June after the
Anti-Defamation League released a screenshot showing a Verizon ad
next to a Facebook post alleging that FEMA was preparing to put
people in concentration camps.
That incident reflected one major area of concern for
advertisers: the chance that their ads could appear next to
objectionable content.
That is particularly true within Facebook's news feed, where
advertisers don't have controls to limit what type of content or
posts their ads might appear next to. Facebook said it is looking
into the issue, but advertisers want concrete actions and results,
according to two senior ad buyers who have had discussions with
Facebook executives on the matter.
Advertisers have brand-safety controls for ads on other parts of
Facebook, such as videos on Facebook Watch, but Facebook's biggest
and most important ad placement remains its news feed, the buyers
said.
"Everyone is buying feed," said one of the buyers, whose agency
spends hundreds of millions of dollars on Facebook annually. "And
that's the biggest thing we're dissatisfied with -- their [lack] of
commitment to making changes in the news feed."
Facebook has around $70 billion in annual advertising revenue,
providing plenty of insulation during the boycott.
Many brands, especially so-called direct-to-consumer companies
and other performance marketers, didn't cut Facebook ad spending
because they regard it as an effective and important marketing
vehicle.
"There's a middle segment of clients who boycotted and are not
happy with Facebook but can't afford not to be on Facebook in some
capacity -- because their business models say they need to be on
Facebook or because their audience is already there," said one of
the ad buyers.
In a sign of Facebook's continued importance and consumer reach,
Unilever-owned Ben & Jerry's Homemade Inc. said it won't
advertise its products on Facebook, Instagram and Twitter for the
rest of the year -- but it will still buy ads from the companies
for its social-justice and election-related work.
"This work is too important to 'unilaterally disarm' across
these platforms that remain powerful channels to engage citizens on
these critically important issues," a spokesman said.
Brad Reagan contributed to this article.
Write to Sahil Patel at sahil.patel@wsj.com and Nat Ives at
nat.ives@wsj.com
(END) Dow Jones Newswires
July 31, 2020 06:14 ET (10:14 GMT)
Copyright (c) 2020 Dow Jones & Company, Inc.
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