Companies Boycotting Facebook Ads [Business Case]

Following the #StopHateforProfit social campaign, close to 1000 companies started boycotting Facebook ads, according to CNN business.

Stephen Hahn-Griffiths posted that this development could really hurt Facebook in the long run.

He added a perceived reputation and association of Facebook with hate speech and other inappropriate content.

Of course, Facebook officially refutes all accusations and claims to have zero tolerance for hate or related issues.

In response to the multinationals boycotting adverts on Facebook, Mark Zuckerberg refuted the trending idea and accusation.

Besides, he claimed people wrongly assume Facebook depends on these large advertisers.

Contrary-wise, he emphasized the importance of small business.

Furthermore, an official Facebook statement claimed the top 100 spenders make up only 16% of an 18.7 billion revenue in the first quarter, 2020.

However, before the companies boycott Facebook ads, there’s an upheaval in the ad industry due to the pandemic.

Consequently, this article will focus on some top companies in boycotting Facebook and the implications.

A Brief Background on Facebook Ads

No doubt, Facebook is the largest advertising social platform globally, with over 1 billion users across the world.

Besides, the company has a sophisticated yet powerful and effective system to drive advertisers’ business.

Similarly, the platform is suitable for virtually all kinds of businesses, including small and medium-scale enterprises.

Facebook’s size automatically means more competition, hence the need to stand out by running specific paid ads.

Why Big Companies use Facebook ads

The reason why big companies use Facebook ads is not far fetched.

However, below are some of the top reasons Facebook and Instagram ads beat other digital marketing options.

In recent times, some of these companies started boycotting Facebook ads. But how did Facebook amass such great stature in the first place?

• There are over 2.7 billion users when you combine for Facebook, WhatsApp, and Instagram platforms monthly.
• Besides, Facebook has over 1.52 billion active users each day.
• Over 2.5 billion active users are on Facebook in a month.
• Amazingly, Facebook generates over $55 billion in advertising revenue in the year 2018
• Facebook made about 93% of its advert revenue in the fourth quarter of 2018 through Mobile advertising.

How Boycotting Facebook advertising started

Anyone can hardly argue that 2020 has had enough twists and turns already, with which companies are struggling to cope.

However, matters took another turn when a series of posts by the US President, Donald Trump, stirred up the criticism.

The critics opined that Facebook failed to adequately censor such ‘hate speech’ that could raise violence and other mishaps.

Moreover, an attempt by the Facebook CEO, Mark Zuckerberg, to defend the action led to further criticism and complicated matters.

Therefore, Jonathan Greenblatt, Rashad Robinson, and Derrick Johnson launched a #StopHateforProfit campaign to question the company’s willingness to stop the hate.

The Anti-defamation League, Common Sense Media, NAACP, Color of Change, Sleeping Giants, and Free Press published an official ad.

Later, the National Hispanic Media Coalition, League of United Latin-American Citizens, and Mozilla joined the campaign to pause all Facebook ads.

Moreover, companies such as the North Face, REI, Upwork, Patagonia, Ben & Jerry’s, Verizon, Unilever, and Coca-cola joined the protest.

By July 7, the organizers met with Facebook representatives, including the CEO, but the meeting outcome wasn’t favourable.

List of Companies Boycotting Facebook Advertising

Impact of Businesses boycotting Facebook ads

Facebook did not outrightly deny that companies boycotting Facebook ads had some effect on the quarterly earnings.

However, the company added that these effects remain minimal compared to what the millions of other advertisers spend.

Since the activist organizations, including NAACP and Anti-Defamation League, initiated companies boycotting Facebook ads, more prominent companies responded adequately.

The ad marketing sector was recovering from the impact of COVID19 on business when a #BlackoutTuesday supported of #BlackLivesMatter campaign.

However, in the US, companies boycotting the Facebook Ad caused a 31% decrease in expenditure in the first week.

Besides, Northern America also experienced a 31.6% decrease in the first week of July before entering a fluctuation period.

All across the world, the spent ad value decreased by up to 26.3% before bouncing back in the same period. By the end of July, the ad budget became 11.8% lesser than the previous month of the year.

Simultaneously, the CPC level dropped by 31% in the first two weeks of July but later rose again.

Similarly, the companies boycott may affect the company’s reputation. The advertising giant still maintains a good stature.

Why are companies boycotting Facebook ads?

Over 100 top companies who advertised on Facebook and Instagram joined the mass campaign of #StopHateforProfit.

Besides, the 1000 brands who cut down or completely withdraw from Facebook hardly made a dent in the company’s strength.

Primarily, the matter started getting out of hand in June 2020 when different reports accused Facebook as a social platform.

The campaign urged advertisers to protest against Facebook’s supposed mishandling of hate speed and misinformation.

Besides, others cut down their spending while some turned to other means of digital marketing and advertising.

Responsive Actions to Companies Boycotting Facebook Ads

On June 26, Facebook lost 8.3% of its market share price, to which Mark announced “warning labels” on said posts.

Furthermore, Facebook removed groups and users associated with the Boogaloo movement.

And by August 2020, released 1,500 Q’Anon pages were found to relate to violence and the likes.

Zuckerberg has further expanded Facebook’s hate speed policy, which did little to reduce the boycott organizers’ pressure.

Alternatives to Companies boycotting Facebook ads

Do companies boycotting Facebook ads have alternatives to run ads and achieve their marketing goals?

According to Pathmatics, Youtube Amazon, and Twitter are some of the companies with the highest profits during the campaign.

For instance, in July, Geico, Hulu, and Samsung, who initially cut down their Facebook ads, increased the Youtube campaign budget.

Also, Geico, Target, and Best Buy doubled their Twitter ads or even more.

As a result, if these alternatives prove to have better outcomes, companies may completely shift their marketing channels.

Top Facebook Advertising Agencies

Many companies need f marketing agencies that can create and manage their Facebook presence and covert sales.

Therefore, this section comprises of the top agencies that can give your brand a social media presence.

On the other hand, they can help achieve optimum results from your marketing campaigns.

1. WebMechanix

WebMecahnix, as a digital agency, drives market sales through SEO, conversion rate optimization, PPC, web development, UI/UX design, and strategy.

Some of the former clients of WebMechanix include Amazon brands, Metalogix, Trinity University, Kindred Healthcare, and Keane Unclaimed property.

2. Klientboost

As an award-winning digital advertising company, Kleintboost has been making waves in the digital market since 2015.

Some of their essential services include PPC management, CRO, and other social media marketing services.

In the past, Klientboost ran campaigns for Stanford University, SAP, Lenovo, Fashionphile, Kiddom, and Nurture Life.

3. Disruptive Advertising

Have you seen Facebook adverts of Adobe, KPMG, Death Wish Coffee Co., and Crossover Symmetry?

Perhaps, that’s the work of Disruptive Advertising Network strategy.

More so, you can entrust this company with Google AdWords, PPC campaigns, display ads, and Facebook ads.

You can also find the Utah based company’s work with PennyMac, Sportsman’s Warehouse, ScottsMiracle-Gro, and Fandango.

4. Spin Brands

Spin Brands is a trusted brand for social media management in SEO, web design, PPC campaigns, and digital marketing.

Also, the UK-based company optimizes Instagramadvanced features to produce a boost in impressions and other deliverables.

Moreover, some of their past clients include Barker Evans, VivoBareFoot, and a BLOC.

5. JMaverick Studios

As the name sounds, JMaverick Studios creates videos and social media marketing content to promote audience engagement for maximum output.

For instance, the California-based company promotes documentary films to gain funding through social media.

Also, this company can manage social media accounts, including Facebook, Instagram, and Twitter.

Also, they worked with AdTech, Adobe, Banana Republic, BitTorrent, BMW, AT&T, Airbnb, Budweiser, and Brocade.

Factors that affect Companies’ Cost of Facebook Ads

The success of Facebook ads depends on how much the ads cost, which in turn depends on five crucial factors:

1. Timing. The period of running ads, year, month, and a specific hour of the day can determine the ads cost. Advisably, the ad agency or marketing manager must survey the peak time of least competition and highest conversion.
2. Targeted audience. How much you spend on an advert may also depend on the size and diversity of your audience. In response, therefore, social media managers must be specific in selecting the targeted audience.
3. Selected placement. The cost of Facebook adverts depends on the order. On the flip side, some posts may attract a higher price. Besides, ad placement may involve the channel of adverts such as news feed, walls, groups, or pages.
4. Bidding strategy. The bidding strategy involves the interplay between cost and the ad limit to serve to maximize conversion. In other words, a good marketing strategy will determine how much you eventually spend to get the same results.
5. Relevant metric data. Digital advertisers on Facebook need to pay attention to three essential rankings: quality, engagement, and conversion. If any of these metrics are lesser than the expected value, you may have to spend more to achieve good results.

Conclusion

On a final note, starting from June 2020, several top multinational companies started boycotting Facebook ads in protest.

The actions intended to spur Facebook’s management to respond favourably against the accusations against it.

On the other hand, it meant for these companies to restrategize on how else to achieve their marketing goals.

What effect do you think this company boycott will have on business marketing?