CEO of the World Federation of Advertisers (WFA) Stephan Loerke.
Eric Piermont / AFP
The CEO of the World Advertisers Federation, Stephan Loerke, says he believes the myriad of big brands that publicly shut down advertising on social media are unlikely to return until a real change is made.
“I don’t see those big brands coming back if there hasn’t been a structural change,” Loerke said in an interview with CNBC. “That is my opinion based on my conversations with them.”
The 120 members of the trade group, which include PepsiCo, P&G and Diageo, account for 90% of global spending on marketing communications, the group says. In a recent survey of 58 of those companies, the WFA found that 31% of respondents had already decided to retain or were likely to retain advertising on social media. 41% said they were undecided, and 29% said it was unlikely or they did not plan to retain.
The poll comes as top advertisers, from Unilever to Starbucks, have announced varying degrees of pause in their social media advertising budgets, following a campaign called “#StopHateForProfit” by a group of organizations urging advertisers to boycott Facebook during the month of July.
Although Facebook has spent the past few weeks trying to stop the ad dollar game with meetings and memos, CEO Mark Zuckerberg’s address to employees, reported by The Information on Wednesday, suggested that the company does not plan to make changes based on the Advertiser Lawsuits Zuckerberg reportedly said that while the boycott raised reputational issues, his assumption was “that all of these advertisers will return to the platform soon.”
Loerke told CNBC that he knows the temporary breaks are unlikely to affect Facebook financially, but that they indicate a radical change in the way companies are thinking about social media. She said that even many of the non-stop companies have said they are determined to find solutions to the problems posed by social media.
“If big brands are pulling out like it looks like they’re pulling out for a month, or a few months, it’s probably not going to make a dent in Facebook’s revenue,” he said. “I think the point of view, that those brands express, has some weight in the industry, and I think that in the long term, that will be important for social media platforms.”
He said he is also skeptical, brands will simply return to the platform if no changes are made.
“Because of the conversations I’m having with the brands, those who went public to say they were going to take a break are very aware that they made those statements publicly. And they are also very aware that the same media that actually took note of That decision will ask questions the day they restart, “he said. “I think those brands that have been public take the idea of pushing for change collectively seriously.”
Social Security
Advertisers have been pushing platforms to clean up for years. In 2017, the London Times published a highly successful report on top brand ads appearing on hate sites and YouTube videos created by supporters of terrorist groups. Consumer goods giant Procter & Gamble kept its ads off YouTube for more than a year, starting in 2017, after its ads were found alongside extremist videos.
But Loerke said the problem was transformed into one of “brand security” to focus more on “social security,” exacerbated perhaps by the transmission last year of a shooting of more than 50 people in Christchurch, New Zealand, that appeared on Facebook, Twitter and Reddit Another shooting outside a synagogue in Halle, Germany, was amplified last year when a video of it appeared on the video streaming site Twitch and then reached other sites.
But even if the ads don’t appear on or alongside specific videos, the video platforms are funded substantially by advertising dollars. And since much of the web is advertiser-funded, many of those advertisers say they have responsibility for the web.
All of this has created a turning point, Loerke says, moving from a media age of efficiency and effectiveness to one where media spending allocation has a strategic dimension.
“The way you allocate your media spend, where you place your ads, speaks to your company,” he said. “We went from brand security to, I think, social security.”
What comes next?
Loerke says he believes operators in the ecosystem, including social media platforms, have an interest in mitigating hate speech and content. But the way it’s done now, he says, is unsustainable and inefficient, with platforms, agency-owned companies, and brand owners, each with their own policies, values, and tools.
“That leads to many operators operating in good faith, but to a system that is simply scalable and inefficient,” he said. “The only way to address this is to find a system and establish a system that is found throughout the ecosystem, which will allow brand owners to make informed decisions about where to place their ads.”
He said that for that to happen, four things must be changed: content needs standardization, so there is an alignment, for example, in the definition of “hate speech” between entities; data on hate speech incidents and other harmful content need to be collected in a unified way; third-party verification is required instead of self-reported data; and tools that operate throughout the ecosystem that allow brands to act according to their values.
The World Federation of Advertisers created the Global Alliance for Responsible Media last year to address issues like this. Loerke said that social media platforms have been working with GARM on these goals.
“I think the fact that the pressure is mounting and that the public visibility of this has reached the level it has reached today; it will help accelerate our effort,” he said.
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