All eyes are on Facebook's earnings call for the second quarter next Wednesday, not least because 2020 was a difficult year for the platform.
A small Digiday survey now shows that third quarter results are likely to be just as important. 56% of media buyers surveyed confirm that their customers have paused their July spending according to the Stop Hate for Profit movement.
What is the Stop Hate for Profit Movement?
The movement for brands to boycott Facebook as a marketing platform was launched under the banner of #StopHateForProfit. The group is organized among several organizations, including well-known organizations for social justice.
Her ultimate goal was to mobilize pressure on Facebook's lax guidelines for content, especially on things like political rhetoric and racism.
The Stop Hate for Profit website has an updated list of companies that have made expenses and the steps that companies are proposing.
What else influenced Facebook in 2020?
Facebook continues its rocky history of public awareness and has done a few more blows this year.
The decision not to contain President Trump's statements triggered a firestorm both internally and externally. The employees within the company were extremely critical of the decision. 400 employees went on strike at one point.
Corona virus also caused a rollercoaster ride in ad revenue, with the initial pandemic panic equating to low ad spend. The numbers recovered, but Covid caused other problems. Bad actors resold medical masks and protective equipment during a nationwide shortage, and this happened during a shortage of Facebook reviewers. There has also been a successful attempt to prove that ads with Covid misinformation were not effectively filtered out.
The upcoming election season was still frustrated and what this could mean for ads and policies. This has led to recent Facebook updates to policies and the ability for users to opt out of political ads in their news feed.
Just last week, Facebook in Illinois decided to use facial recognition software to tag users in photos for $ 650 million. Illinois was in a state of approval for facial recognition software, arguing that consent was not obtained from users.
The CCPA was also introduced, with Facebook adopting an aggressive stance to force advertisers to comply. Although the mood was not bad, confusion about politics itself and unprepared media buyers made July a bad start.
After emphasizing for over a year that their campaign budget optimization function would be required, they threw in the towel and decided not to enforce it.
Is the advertising revenue break tied to the economy?
It was questionable how much of a break in spending has to do with the current economic climate compared to a social statement.
However, a little less than half of those surveyed said that their customers would spend more if Facebook's reputation and values were better matched to theirs.
When asked how long the break is likely to last:
- 41% said spending would resume by the end of July
- 26% indicated that this will only happen at the end of the third quarter
- 17% said that this would only happen when Facebook made “significant changes”.
While "meaningful changes" are undefined, buyers said that if they have more control and remove hate speech, the two most important things they could do at this point.
Despite these feelings, buyers disagree as to whether this boycott will actually make a difference
The second quarter earnings call this week will only cover the beginning of the boycott discussion, which heated up in May and June.
The full impact on Facebook's bottom line will not be known until after the third quarter, but all eyes are on the second quarter's results to be a leading indicator of what will be seen at that time.