Big advertisers are leaving Facebook in droves. Does it matter?

It’s been nearly a month since George Floyd was killed by Minneapolis police, and the conversations around police brutality and racial injustice continue to shake the world. While much of social media has reflected this conversation, from ongoing calls to action from organizers and activists to more passive shows of support like black squares on Instagram, dissent has also started to converge. White supremacists and far-right groups have called for violence against demonstrators and even organized efforts to try to disrupt rallies and frame protesters for acts of violence. And while these conversations have existed in the shadier corners of the internet, like 8chan, for quite some time, they are increasingly happening on Facebook.

Most mainstream social networks have started cracking down on hate speech and taken action against calls for violence, even when they come from the president himself. Reddit recently banned thousands of communities for spreading hate, including the largest community of Trump supporters on the platform. Twitter has, on multiple occasions, flagged tweets from President Trump that violate company rules. Twitch decided to suspend his account for “hateful conduct.” Snapchat stopped promoting Trump’s posts. But Facebook, by contrast, continues to profit off the president’s advertising money while taking minimal action, even when his content clearly breaks company rules.

Because of Facebook’s inaction on these issues, many corporations are for the first time seriously reconsidering whether they want their business associated with the platform. Additionally, they are being forced to weigh the negative implications of having their products and services appear alongside potentially incendiary content.

The Anti-Defamation League, along with other organizations like Color of Change and the NAACP, are leading perhaps the most significant effort to date to disrupt Facebook’s operations. The Stop Hate for Profit campaign has organized more than 100 major brands that have all pledged to pull advertising from Facebook-owned platforms for the month of July. The companies — which include the likes of adidas, Coca-Cola, Ford, Starbucks, Unilever, and Verizon — are demanding that Facebook take steps to address hate speech on its platform.

For years now, Facebook has been a largely unavoidable and unmovable object. The company’s network spreads far and wide, with billions of users on its platforms including the flagship social network, Instagram, and WhatsApp. While the company has come under fire plenty, including from lawmakers and regulators, and taken its fair share of lumps, including a record $5 billion fine from the Federal Trade Commission, it continues to operate largely uninterrupted. The Stop Hate For Profit campaign doesn’t focus on trying to force new regulations on Facebook or get people to abandon the platforms en masse. Instead, it targets Facebook’s real source of power: advertisements. As company CEO Mark Zuckerberg famously told the US Senate when asked what exactly it is that Facebook does to make money, “We sell ads.”

As companies have agreed to pull advertisements, Facebook’s foundation has started to look a little bit shakier. The company’s stock dropped eight percent last week when multinational consumer goods company Unilever announced that it would stop advertising on Facebook platforms through the end of the year, and saw a three percent dip on Monday when companies including Starbucks, Coca-Cola, and Hershey’s all announced they would participate in the boycott. The company has lost $60 billion in market value in just the last few days as advertisers pull out. This has won some concessions from Facebook already. Zuckerberg recently announced that the company will flag posts that violate the rules of the platform, including if they are from users of public interest like President Trump. This is a reversal from the company’s stance just weeks earlier when Zuckerberg declined to flag posts for fear of taking on the role of “arbiter of truth.”

The drop in market value and the quick course correction from Facebook are indicators that the advertisers may have some power here. The question is just how much can they wield. Jessica Liu, a senior analyst at market research company Forrester, tells Mic that it will depend on not just how many companies get involved, but how big they are — and how long they are willing to withhold their money from Facebook while losing out on the company’s significant audience.

“The absolute number of companies boycotting is important to form this consortium, [there is] power in numbers,” Forrester says. “But also which advertisers is important. If Facebook’s top 10-20 advertisers by media spend defect, Facebook will feel the absence.” According to Liu, advertisers hold the purse strings when it comes to Facebook, and they can use that power to exert change. “Advertising is just one piece of brands’ activity on social media but gets the most media attention because it fuels the social networks’ revenue and what Wall Street pays attention to.”

A BMO Capital Markets report provided to Mic noted that Facebook has more than eight million total advertisers, ranging from multinational corporations to small businesses and individuals. It will take a sustained effort from advertisers to stay off Facebook and for those ad dollars to not immediately be replaced by other companies more interested in selling products than Facebook’s morals.

Dan Salmon, an analyst at BMO Capital Markets, says the situation “should continue to be monitored” to see if companies continue to pull out and if those decisions influence other companies to follow suit. “This advertising boycott is a great first step to forcing the social networks to improve their environments and user experiences,” Liu says. “The next step is for brands to reevaluate their entire social media presence.”

“We invest billions of dollars each year to keep our community safe and continuously work with outside experts to review and update our policies,” a spokesperson for Facebook tells Mic. “We know we have more work to do, and we’ll continue to work with civil rights groups, GARM, and other experts to develop even more tools, technology and policies to continue this fight.”

Liu also notes that while advertisers are Facebook’s profit center, ads on the platform are only as valuable as they are because Facebook holds the attention of so many users. She says that users are the lifeblood of the company, and a shift away from Facebook-run platforms would also damage the company’s revenue. Pulling advertising is capable of producing instant impact, she says, but an exodus of users alongside that loss of ad dollars would have a more profound impact over time.

Getting Facebook to actually start taking hate speech seriously will require a long-term, multi-pronged approach that hits the company’s pocketbook now and hurts its potential profit inthe future. In the past, these types of campaigns have proved difficult to execute. News cycles change quickly; attention spans are short. The current civil rights movement has shown the capacity for sustained action. Now it will be up to advertisers and users to show Facebook they have the stomach to stay away until things change.