Walmart, McDonald’s quietly pause ads on Facebook amid boycott, study says

Brief:

  • Walmart, McDonald’s, Kellogg’s, Allstate, Dell, Geico, Ikea, Kohl’s and Peloton quietly stopped advertising on Facebook without officially announcing participation in an advertiser boycott of the social network, per an analysis by watchdog group Media Matters for America (MMA) that was shared with Mobile Marketer. 
  • The nine brands cited by MMA spent more than $335 million combined on Facebook advertising last year, per its analysis of data compiled by researcher Pathmatics. Walmart was one of the biggest advertisers on Facebook with media spending of more than $145 million in 2019, but its last ad appeared on the social network on July 1, the report said.
  • Geico, the insurance company that last year was a top 35 advertiser on Facebook, briefly paused advertising in early June during a social media blackout to support protesters of the killing of George Floyd in police custody. Geico resumed ads after the blackout ended, and then stopped them altogether on June 26, per MMA’s analysis.

Insight:

MMA’s analysis of Facebook advertising suggests that the effects of the “Stop Hate for Profit” boycott, led by U.S. civil rights groups including the Anti-Defamation League and the NAACP, are bigger than indicated by official announcements. Outdoor goods retailers North Face, Patagonia and REI were among the first companies to join the boycott movement with public pronouncements on social media, followed by other marketers such as Adidas, Ben & Jerry’s, Clorox, Eddie Bauer, HP, Levi’s, Mars, Target, Unilever, Verizon and Honda’s U.S. operations. A tally compiled by the campaign indicates more than 400 companies are participating in the boycott.

“Facebook should expect that advertisers will continue to distance themselves from the platform as long as it refuses to institute real change in response to the ‘Stop Hate For Profit’ campaign,” according to MMA. “While Facebook has given tangible, meaningful concessions to bogus right-wing pressure campaigns for years, it has totally failed to address the underlying causes of platform-wide hate, abuse and damaging disinformation.”

MMA’s study follows a Wall Street Journal report indicating that Disney, one of the biggest advertisers on Facebook, had cut its spending on the social network without making a public statement about the move. Disney was concerned about Facebook’s policies about removing objectionable content, and paused advertising for its Disney+ streaming service, people familiar with the situation told the newspaper. Disney had spent $210 million to advertise Disney+ on Facebook during the first half of the year, making the entertainment giant the biggest spender on the social network. Only Home Depot spent more than Disney on Facebook advertising last year, per Pathmatics data cited by the Journal.

It’s too early to tell how much the temporary boycott is affecting Facebook’s revenue. The company’s stock hit a record high this week, indicating that investors are shrugging off concerns about the boycott’s possible financial effects. Facebook has weathered past crises like the Cambridge Analytica scandal that resulted in a record $5 billion fine by the Federal Trade Commission. The company has a diverse revenue base among 8 million advertisers worldwide, though many smaller businesses have faced serious threats from the coronavirus pandemic and resulting lockdowns.

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