Facebook shares fell in pre-market trading on Monday, after Diageo and Starbucks became the latest companies to stop advertising on social media platforms for ineffective surveillance of hate speech.
Shares of the social networking company FB,
which operates Instagram and WhatsApp, in addition to its eponymous platform, fell more than 2% before the opening of regular commerce, with Twitter TWTR,
down for a similar amount.
“Diageo DGE,
strives to promote inclusion and diversity, including through our marketing campaigns. Starting July 1, we will pause all paid advertising globally on major social media platforms. We will continue to discuss with media partners how they will deal with unacceptable content, ”the UK-based spirits and beer maker said in a statement.
On Sunday, the coffee giant Starbucks SBUX,
He said he was “pausing” ads across all social media platforms and that he “would continue discussions internally, with our media partners and with civil rights organizations in an effort to stop the spread of hate speech.” On Friday, Unilever UN,
ULVR,
He said he would stop American advertising on Facebook and Twitter until the end of the year. Its Ben & Jerry’s ice cream unit had previously announced a Facebook ad recall.
Coca-Cola KO,
He said Friday that “it would pause paid advertising on all social media platforms worldwide for at least 30 days.” On Saturday, another iconic American brand, Levi Strauss & Co. LEVI,
announced on Twitter that it would also stop ads on Instagram and Facebook:
On Friday night, Facebook Chief Executive Mark Zuckerberg announced policy changes, during a “virtual town hall,” to hide or block content deemed hateful or potentially damaging to voting, without exception for politicians, an approach that Twitter has previously applied to high-profile ones. account of President Donald Trump and others. Twitter has not been a constant target of the boycott call, but it has come under a new wave of scrutiny, and shares have fallen alongside those of Facebook.
Neither Facebook nor Twitter could be immediately reached for comment.
Read:Facebook’s Zuckerberg reportedly talked about making moves against Trump since 2015
The boycotts stem from a #StopHateforProfits campaign announced by a civil rights coalition and other groups, including the Anti-Defamation League and the National Association for the Advancement of People of Color, which has asked Facebook advertisers to demonstrate that they do not They will support companies that prioritize profits over safety.
Since the campaign launched, the list of companies that choose to pause advertising has been growing, but Facebook is still looking at less than 5% of revenue, said Rohit Kulkarni, CEO of MKM Partners, in a note to customers. .
First, he said that Facebook gets most of its revenue from mobile direct ads and small business marketing. “FB has more than 160 million registered companies worldwide and 8 million paying advertisers,” said Kulkarni, who noted that Ad Age’s 100 largest advertisers spend proportionally less on Facebook.
“Procter & Gamble PG,
It is the world’s largest advertiser, but we believe it represents less than 0.50% of FB’s revenue, “said Kulkarni. Due to COVID-19, he said MKM had already expected major advertisers to cut spending in the second half. this year, “which implies a lower marginal headwind” for Facebook. Wall Street estimates annual growth of 1% in the second quarter and 7% in the third. “We believe Street’s short-term estimates are reasonable and that there is an upside potential given the recovery in the advertising market. “
Said Snapchat father Snap inc. SNAP,
could benefit from “short-term uncertainty with advertiser policies related to[AlphaL-owned,
GOOG,
YouTube]and Instagram. “
Tim Rostan contributed to this report..
.
