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The campaign is affecting Facebook stock. On Friday, it plunged by 8.32% and closed at $216.08. In early trading today, FB shares are further down. At the moment of writing, Facebook stock makes up $210.10 per share or 2.77% down.
Facebook Inc (NASDAQ: FB) is now experiencing hard times. More and more companies across the globe are joining the #StopHateForProfit campaign that boycotts advertising on Facebook’s platform. Organizers of the Facebook ad boycott campaign are now preparing to take this battle worldwide and further increase pressure on social media giant.
Roots of Facebook Ad Boycott Campaign
It all started back in May, after the death of George Floyd while in police custody. Numerous protests across the U.S. began. Then followed ambiguous statements of the U.S. President Donald Trump, both on Twitter and Facebook. He said that “when the looting starts, the shooting starts.” Facebook left this post published.
As the race justice movement started rapidly spreading and going beyond the US borders, Color of Change and the National Association for the Advancement of Colored People said Facebook allows “racist, violent and verifiably false content to run rampant on its platform”. Then the Facebook ad boycott campaign began.
The participants have asked the social media giant to raise their efforts in fighting against hate speech and disinformation. In response, Facebook CEO Mark Zuckerberg pledged to initiate new measures and change Facebook’s policies to prohibit hate speech in the advertisements. In addition, he said they would ban ads that cite people from a particular race, ethnicity, nationality, caste, gender, sexual orientation, or immigration origin.
Over 160 mostly US companies have already joined the ‘Stop Hate for Profit’ campaign. Among them are Coca-Cola Co (NYSE: KO), Honda Motor Co Ltd (TYO: 7267), Starbucks (NASDAQ: SBUX), Verizon Communications (NYSE: VZ), and more. Top brands put their advertising on Facebook on hold at least for July.
For example, Unilever (NYSE: UN) said it would halt Twitter, Facebook, and Instagram advertising in the U.S. “at least” through 2020:
“Continuing to advertise on these platforms at this time would not add value to people and society. We will revisit our current position if necessary.”
The Facebook ad boycott campaign is gaining reactions. The organizers are calling for more companies to take part in it.
Jim Steyer, chief executive of Common Sense Media, said:
“The next frontier is global pressure.”
According to Ian Orekondy, CEO of ad tech company AdComplyRx, Facebook has also not address demands that it refund companies whose ads are displayed next to content that is later removed for policy violations.
As Jessica Gonzalez, co-chief executive of Free Press, said, she has contacted major US telecommunications and media companies to ask them to join the campaign. Besides, Gonzales commented commented on Zuckerberg’s statement on Friday:
“If they think they are done based on Friday, they are sorely mistaken. We don’t need a one-off policy here and there. We need comprehensive policy.”
Facebook’s ad business is generating as much as $70 billion per year, with big corporations making up about a quarter of that. This year, it will be a whole different.
The campaign is also affecting the Facebook stock. On Friday, it plunged by 8.32% after Unilever’s statement and closed at $216.08. The drop wiped out $56 billion in Facebook’s market capitalization. In early trading today, FB shares are further down. At the moment of writing, Facebook stock makes up $210.10 per share or 2.77% down.