Disney Slashed Ad Spending on Facebook Amid Growing Boycott--2nd Update
By Suzanne Vranica
Walt Disney Co. has dramatically slashed its advertising
spending on Facebook Inc., according to people familiar with the
situation, the latest setback for the tech giant as it faces a
boycott from companies upset with its handling of hate speech and
Disney was Facebook's top U.S. advertiser for the first six
months of 2020, research firm Pathmatics Inc. estimates. It joins
hundreds of other companies that have paused spending, including
Unilever PLC, Starbucks Corp., Ford Motor Co., Verizon
Communication Inc. and many small marketers.
Civil-rights groups including the Anti-Defamation League and
NAACP called on advertisers to pull ad spending for July, arguing
Facebook hasn't made enough progress enforcing its policies on hate
speech and misinformation.
Some brands paused spending for longer stretches; the time frame
for Disney's pullback wasn't clear. Unlike many other companies,
Disney didn't make a public announcement that it was cutting back
on Facebook, but instead shifted advertising plans quietly.
The entertainment giant, which is concerned about Facebook's
enforcement of its policies surrounding objectionable content, has
paused advertising of its streaming-video service Disney+, the
people familiar with the situation said. Disney has promoted the
service heavily this year and it makes up a substantial portion of
the company's spending on marketing.
In the first half of this year, Disney spent an estimated $210
million on Facebook ads for Disney+ in the U.S., according to
Pathmatics. Disney was the biggest ad spender during that period.
Last year, it was the No. 2 Facebook advertiser in the U.S., behind
Home Depot Inc.
Disney also paused spending on Facebook-owned Instagram for its
sister streaming service Hulu, a person familiar with matter said.
Hulu spent $16 million on Instagram from April 15 to June 30,
Other divisions of Disney are also re-examining their
advertising on Facebook. Ads for ABC and Disney-owned cable
networks such as Freeform have all but vanished from the site.
While there are fewer shows to market during the summer, a person
familiar with the matter said, it is unlikely that ads will return
when new episodes need to be promoted, unless the social platform
polices itself better.
Disney representatives had no immediate comment.
"We know we have more work to do," Facebook said in a statement,
adding that it would work with civil-rights groups, a leading ad
trade group and other experts "to develop even more tools,
technology and policies to continue this fight."
Facebook has said it invests billions of dollars to keep its
platforms safe and has banned 250 white-supremacist organizations
from Facebook and Instagram. It also has said artificial
intelligence helps it find nearly 90% of hate speech before anyone
Earlier this month, the company said it would start labeling
political speech that violates its rules and take other measures to
prevent voter suppression and protect minorities from abuse.
Facebook has around $70 billion in annual advertising revenue,
generated from over eight million advertisers. It would take a
sustained boycott from its biggest advertisers to put a significant
dent in the company financially.
Some marketers are reducing ad spending broadly because of
financial pressures caused by the coronavirus pandemic. Many brands
prefer not to cut Facebook ad spending, because they regard it as
an especially effective marketing vehicle.
While Disney has been aggressively marketing Disney+ during the
pandemic, it has had less reason to market other areas of its
business, such as its theme parks unit, which have closed until
recently. Disney's movie studio, which is typically a heavy ad
spender, has been forced to delay the release of new movies because
of theater closures.
Marketers are demanding that Facebook find ways to keep their
ads away from objectionable content.
The company, which has been meeting with advertisers and
agencies, said late last month that it plans to evaluate the rules
publishers and creators must follow if they want to make money from
their Facebook content through ads. It will also assess the tools
it gives brands to ensure their ads don't appear near inappropriate
content. The audits will be handled by industry measurement
watchdog Media Rating Council.
Write to Suzanne Vranica at email@example.com
(END) Dow Jones Newswires
July 18, 2020 16:40 ET (20:40 GMT)
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