Shareholder Proposal at Omnicom Questions Ad Buyers' Role in Online Hate
January 18 2021 - 6:29AM
Dow Jones News
By Alexandra Bruell
Shareholders are taking aim at buyers of social-media
advertising for their possible role in spreading disinformation and
hate speech.
New shareholder resolutions call upon advertiser Home Depot Inc.
and agency group Omnicom Group Inc. to investigate whether their
advertising policies inadvertently contribute to "violations of
civil or human rights" by funding platforms that spread
inappropriate content, according to copies of the proposals filed
in late 2020.
The effort was organized by Open MIC, an organization that uses
shareholder engagement to promote causes such as diversity and
privacy.
Advertisers have come under pressure to withhold their spending
from controversial TV programming or social-media platforms such as
Facebook Inc. and to use their weight to push for more content
moderation.
Civil rights activists including the Anti-Defamation League and
the NAACP last summer pressured advertisers to boycott Facebook in
an effort to get the social-media giant to better enforce policies
around hate speech and misinformation.
The proposal at Omnicom differs from the usual campaigns by
putting the spotlight on agency ad buyers. Advertisers hire buyers
at large agencies to help them plan and allocate their media
budgets.
"The ad buyers and the big ad agencies are typically behind the
scenes, and yet they have an enormous amount of influence on what
happens in the media environment, particularly on social media,"
said Michael Connor, executive director of Open MIC, which stands
for Open Media and Information Companies Initiative. "They are
making recommendations and helping their clients manage billions of
dollars in spending, and all too often they escape any kind of
scrutiny for what they do."
The votes on such proposals are advisory and nonbinding.
The shareholder proposals were filed before the Jan. 6 assault
on the Capitol, but the rioters' use of social media to organize
underscored the need for moderation at the social platforms, he
said.
"Omnicom is committed to ensuring our client's ads do not appear
next to harmful content on social media platforms while holding
them accountable to the ethical standards our clients are demanding
and with which we are aligned," said an Omnicom spokeswoman in a
statement.
The statement outlined various efforts to hold social-media
platforms accountable, including the formation of the Council on
Accountable Social Advertising last July to ensure there is
accountability and transparency similar to what has existed for
decades within other media channels.
"We're addressing the proposal through the appropriate process,"
said a Home Depot spokeswoman in a statement. "We're saddened and
outraged by the violent attack on the U.S. Capitol and our
lawmakers, and like others, we're disgusted by hate speech and
discriminatory content we see on social media."
Open MIC identified shareholders in line with its efforts to
push for change, ultimately working with Omnicom shareholder Nathan
Cummings Foundation, an organization focused on social justice, and
an individual Home Depot shareholder, Myra K. Young.
Myra K. Young holds 47 shares, according to Open MIC. Nathan
Cummings Foundation declined through Open MIC to disclose the
number of shares it holds.
"The Foundation is not a significant shareholder, but it's
really not about how many shares we own," said Laura Campos,
director of corporate and political accountability for the Nathan
Cummings Foundation, in a statement provided by Open MIC. "What
matters is the number of shares backing our request should the
proposal go to a vote. We expect support for the proposal will be
strong, given recent events and the saliency of this issue."
Many advertisers in recent years have paused their spending on
the big social-media platforms after discovering their ads appeared
in or near inappropriate content. Activist organization Sleeping
Giants also has called out individual advertisers on social media,
pressuring them to withhold spending when television hosts make
comments widely considered to be hateful or offensive.
Shareholders will be able to vote on the proposals at the
companies' annual meetings this spring, unless the companies file
objections with the Securities and Exchange Commission and are able
to block them.
Shareholder resolutions can be effective if there is an
underlying issue at a company, pushing a company to make changes,
said Greg Badishkanian, a senior analyst and consumer sector head
at Wolfe Research LLC who covers Home Depot. But in most cases,
they ultimately don't have much impact on companies' practices or
stock price, he said.
"For investors, this would not be impactful," said Mr.
Badishkanian regarding Home Depot's resolution. "Most investors
have confidence in the management team and their practices."
Write to Alexandra Bruell at alexandra.bruell@wsj.com
(END) Dow Jones Newswires
January 18, 2021 06:14 ET (11:14 GMT)
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