Does Facebook Have a Future?
By: S I Ahmed
Tags: Technology, Social Media, Startup, Entrepreneurship, Business

A decline in reputation

The steady inflow regarding public disclosures and accusations has caused public opinion to downgrade the company, with its peak being reached around July as companies like Starbuck and Coca-Cola took an active role in advocating the “boycott movement”.

This caused Facebook to record the biggest decline in its reputation amongst any major corporation in America. According to an annual survey conducted by The Harris Poll, Facebook was the number one contender for the “decline in reputation quotient” in 2019 primarily due to the Cambridge Analytica saga and the boycott movement was perhaps the last nail in the coffin.

But none of that seemed to affect the company’s bottom line with advertisers who recognized that its reach was continuing to extend across the globe and into older demographics.

Without that, the company that generates some 98% of its nearly $71 billion in revenue from ads, has had little incentive to reconsider its behavior.

The boycott campaign had gained widespread attention in mid-June when Patagonia, REI, and North Face — outdoors companies that have made values-based consumerism part of their brands — joined the effort.

Some of the other companies involved — Ben & Jerry’s, Puma, Luluemon, and Vans — have younger, progressive customer bases, or at least, present themselves that way. It’s been joined by more mainstream marketing giants like Ford Motor Co, Microsoft, Unilever, and Pfizer. Since then, around 250 more companies have signed on, according to a running count gathered by the Anti-Defamation League, with some companies pausing marketing efforts on other social media platforms, like Twitter, joining the league.

Inside the US, the coalition of civil rights groups including the ADL and the NAACP is spearheading the campaign, which has been dubbed “Stop Hate for Profit.” The effort, perhaps ironically, spread across social media with a hashtag, rapidly becoming a cause celebre.

Companies are taking varied approaches to the campaign. Some are pausing advertising for July, while others have announced a suspension through the end of the year.

It’s not about whether the boycott will meaningfully impact the company’s bottom line — more than 8 million entities advertise on Facebook, Chief Operating Officer Sheryl Sandberg said in April — but investors are taking notice.

Facebook stock slid after Unilever, one of the biggest advertisers in the world, said it would stop running ads on Facebook, Instagram, and Twitter through the end of the year, citing a “polarized election period” and noting that “continuing to advertise on these platforms at this time would not add value to people and society.”

Breathless headlines earlier this week had noted that the company had lost $60 billion in market share in just two days as a result of the actions.

Many companies that have pulled ads from the platform have referenced Facebook’s approach to hate speech and misleading or fake content.

The chief marketing officer of Levi Strauss & Co said in a blog post about the company’s decision to stop its Facebook advertising that Facebook’s failure to stem hate speech and misinformation “fuels racism and violence and also has the potential to threaten our democracy and the integrity of our elections.”

The Clorox Co said it was pausing Facebook spending because it feels “compelled to take action against hate speech.” And chocolate manufacturer Hershey’s said it was joining the boycotts after conversations with Facebook earlier in June about its handling of hate speech failed to produce results.

“Despite repeated assertions by Facebook to take action, we have not seen meaningful change,” Hershey’s said. Just last month, the company again saw controversy over former U.S President Donald Trump’s posts about mail-in ballots and fraud. While Twitter decided to label the posts as misleading, Facebook determined that they did not violate its policies.