Social media companies face revenue hit from boycotts

Social media companies face revenue hit from boycotts

SeattlePI.com

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Verizon's decision to join the growing boycott against Facebook and Twitter risks hurting the social media giants where it hurts most: their advertising revenue.

Advertising accounts for nearly all Facebook's $70.7 billion annual revenue, and a similar share of Twitter's $3.46 billion. Both already faced declining ad spending as big advertisers like Ford and Coca-Cola cut their budgets amid the pandemic and recession.

The #StopHateforProfit campaign launched June 17 by the Anti-Defamation League, the NAACP and other advocacy groups seeks to pressure the social media giants into doing more to curtail racist and violent content on their websites. So far, the campaign has signed on more than 200 companies and organizations.

Outdoor gear retailers Northface, REI and Patagonia were among the first companies to join the boycott. Patagonia said it made the move because the social media giant failed to take steps to stop the spread on its platform of “hateful lies and dangerous propaganda.”

But Verizon, which spent $3.07 billion on advertising in 2019, appeared to tip the scales for investors, who sent Twitter shares plunging 7.4% and Facebook shares sliding 8.4% on June 26 after it joined the boycott.

Facebook and its CEO Mark Zuckerberg have been the main targets of the boycott. But several large corporations are suspending all social media ad spending as the industry fumbles with how to maintain open platforms for expression while determining which posts contain hateful or offensive rhetoric and need to be flagged or deleted.

“We’re pausing our advertising until Facebook can create an acceptable solution that makes us comfortable," New York-based Verizon said in a statement.

Coca-Cola and Starbucks are among the other consumer products titans to halt all their social media advertising. Large companies are...

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