What happened
Facebook (NASDAQ: FB) The actions had an impact on operations on Friday, falling 6.5% as of 12:10 pm EDT, following an announcement by Verizon (NYSE: VZ) Last night you are “pausing” the purchase of online ads from Facebook and its wholly owned subsidiary of Instagram.
And that
On Thursday, the Anti-Defamation League released an open letter criticizing Verizon for the presence of one of its ads found on Facebook “alongside a video by the QAnon conspiracy group based on hateful and anti-Semitic rhetoric.”
Image source: Getty Images.
Just a few hours later, after closing the trade on the Nasdaq, Verizon announced that it will withdraw its ads until Facebook “can create an acceptable solution that makes us feel comfortable” and ensures that Verizon’s ads do not appear on the same page. next to posts that Verizon customers may find objectionable.
Now what
How important is this to Facebook? Advertising analysis company Pathmatics estimates that Verizon spends approximately $ 1.9 million or so, combined, on Facebook and Instagram ads monthly; Call it $ 23 million a year. That’s kind of a dip in the bucket of $ 73.4 billion annual revenue stream from these blue chip tech stocks, but it’s nothing.
Still, the real concern will be whether Verizon’s high-profile hiatus causes even more advertisers to boycott Facebook, so that revenue misses a snowball. There is a limit to how far this can go, as companies that stop advertising will necessarily lose exposure relative to companies that continue to buy ads on Facebook.
In the end, I suspect this will be a kind of storm in a kettle that won’t harm Facebook’s business in the long run, but I have to admit that the headlines look bad right now, and I can hardly blame Facebook shareholders for feeling nervous today.
