• Some of the world’s biggest brands have joined a month-long boycott of Facebook advertising in a bid to make the social media giant take tougher action against hate speech.
  • Analysing the media discussion around the Stop Hate for Profit campaign, we found that brands such as Unilever and Verizon managed to boost their reputation by promoting their values and stances on racial justice.
  • Using social media data to trace the growth of the campaign, we discovered that apart from praising the organisations that supported the boycott, many users engaged in putting pressure on other large advertisers such as Apple and Disney that still haven’t taken part.

Facebook is once again making headlines across mainstream media outlets, and it’s again for all the wrong reasons.

In the last several years, the largest social media platform has been standing at the edge of a reputational precipice due to a string of high-profile failures, including the Cambridge Analytica scandal, the 2016 election meddling, the “fake news” phenomenon, the sharing of sensitive data to third-parties and the hacking of millions of accounts. Facebook fell to the bottom of Reputation Institute’s U.S. RepTrak and was the worst-performing company in the 2019 Harris Poll Reputation Quotient.

Now that list of failures has been enriched by renewed accusations against the social media giant’s approach towards hate speech. The current outrage is growing into a movement that threatens its bottom line, as its most vocal critics are not only its users but actually some of the world’s biggest advertisers.

It all began on June 17 when a group of civil rights organisations like the Anti-Defamation League, the National Association for the Advancement of Colored People (NAACP) and Color of Change launched the campaign Stop Hate for Profit, urging businesses not to advertise on Facebook in July in order to “hit pause on hate”.

Criticisms against the social network’s hate speech policies have been around for several years. Observers regularly point out that hate speech fuelled the 2017 genocide against the Rohingya Muslims in Myanmar, while last year the mosque shootings in Christchurch, New Zealand were live-streamed. In addition, marketers have been dissatisfied with Facebook’s lack of commitment to brand safety as ads are sometimes displayed alongside objectionable content.

Now, the accusations are gathering steam in the wake of the police killing of George Floyd, which sparked nationwide protests about police brutality and racial justice but also gave rise to hate-induced conspiracy theories and misinformation, including the false narrative that George Soros orchestrated the protests.

Stop Hate for Profit claimed that Facebook allowed incitement to violence against protesters fighting for racial justice in America and noted that the company named Breitbart News a “trusted news source” and made The Daily Caller a “fact-checker” despite these outlets having records of working with white nationalists. Anti-Defamation League CEO Jonathan Greenblatt said the point of the campaign is to show that combating hate speech is not only a stakeholder concern but a “shareholder imperative.”

Facebook also faced backlash for not removing a post by President Donald Trump which said that “when the looting start, the shooting starts” – a phrase that advocacy groups and some of the company’s own employees said could incite violence. In contrast to its rival Twitter, which has been labelling Trump’s tweets as objectionable content, Facebook has had a loose approach to speech from politicians, with the idea that the electorate has the right to know what they are saying.

Big boycotters

Some of the world’s biggest brands joined the boycott, including Coca-Cola, Unilever, Verizon, Adidas, Levi Strauss, Ford, Denny’s, Volkswagen and Microsoft.

According to marketing experts, the campaign will hurt Facebook’s already bad reputation rather than its finances. Indeed, it seems that there is no direct correlation between stock market performance and corporate reputation at least in the short term, as the case of Facebook shows: the company’s share price has not suffered dramatically in line with its reputational decline, and actually tends to recover after crises.

The company, which earns nearly $70 billion in annual revenue from more than 8 million advertisers, is unlikely to take a substantial financial hit for two main reasons: the majority of companies have committed to only a one-month boycott and, more importantly, the bulk of Facebook’s advertising revenue comes from myriad of small- to medium-sized businesses.

The vast majority of these businesses, which account for 76% of all spending on Facebook according to Deutsche Bank, have not signed up to the campaign primarily because they can’t afford not to use Facebook’s cheap and targeted marketing services, especially in a pandemic.

But still, the boycott influenced investors: shares in Facebook fell 8.3%, eliminating $56bn from the company’s market value and knocking $7.2bn off Mr Zuckerberg’s personal net worth, Bloomberg reported. As a result, Louis Vuitton CEO Bernard Arnault replaced Zuckerberg as the world’s third-richest individual.

The market loss occurred shortly after consumer goods company Unilever, which is one of the biggest ad spenders in the world, announced it’s joining the campaign. Unilever was the most often mentioned company in the extensive media coverage of the boycott, as we found analysing 1780 articles published in top-tier English-language outlets between 17 June-3 July.

Unilever, whose household brands include Dove soap, Hellmann’s mayonnaise and Lipton tea, said it will stop advertising on Facebook, Instagram and Twitter at least until the rest of the year. The company spent $42.3 million on Facebook ads in the U.S. last year, according to research company Pathmatics.

“Continuing to advertise on these platforms at this time would not add value to people and society,” the consumer goods giant said in a statement, adding that there was much more work to be done in handling hate speech and political polarisation: “The complexities of the current cultural landscape have placed a renewed responsibility on brands to learn, respond and act to drive a trusted and safe digital ecosystem.”

Unilever’s move was perceived as a significant escalation in the campaign’s efforts. Color of Change called the company’s move “a huge step forward in holding Facebook accountable for enabling hateful, denigrating and discriminatory content against Black people.”

Shortly after Unilever‘s decision, Facebook pledged to change its policies on hate speech and voter suppression. Although Zuckerberg didn’t mention Unilever or the boycott, he said he was “optimistic that we can make progress on public health and racial justice while maintaining our democratic traditions around free expression and voting.”

In the eyes of many commentators, Unilever has been a leader in demanding that tech giants clean up the digital ad ecosystem. It has also urged them to police advertising fraud and addressed the lack of transparency in their metrics. The company also has taken stances on social issues: for example, it said it would discontinue the name “Fair & Lovely” for its skin-lightening cream, acknowledging it boosts the notion that light skin is better.

One of Unilever’s best-known brands – Ben & Jerry’s – pulled its advertising from Facebook even before its parent company. The brand tweeted that “Facebook, Inc. must take the clear and unequivocal actions to stop its platform from being used to spread and amplify racism and hate.”

Verizon, one of the world’s biggest telecommunications companies, pulled its ads from Facebook a day earlier than Unilever. “We have strict content policies in place and have zero-tolerance when they are breached, we take action,” the company said in a statement. “We’re pausing our advertising until Facebook can create an acceptable solution that makes us comfortable.”

Verizon‘s move came after the Anti-Defamation League published an open letter in which it said it found a Verizon ad on Facebook next to a video by the conspiracy group QAnon “drawing on hateful and antisemitic rhetoric”. John Nitti, Verizon’s chief media officer, said in a statement that his company’s “brand safety standards have not changed”, adding: “We have strict content policies in place and have zero-tolerance when they are breached, we take action. We’re pausing our advertising until Facebook can create an acceptable solution that makes us comfortable and is consistent with what we’ve done with YouTube and other partners.”

Meanwhile, clothing company Patagonia said Facebook must “develop a conscience” and behave more like a traditional media outlet, taking complete responsibility for the content that appears on its website. Ryan Gellert, Patagonia’s EMEA general manager, said that the company made the decision because it believes that “many of these tech platforms – Facebook more than most, – have been profiting from hate speech and disinformation,” and that Patagonia had an “obligation” not to spend its money with Facebook.

Coca-Cola went further than most advertisers, announcing that it was pausing its global ad spending for at least 30 days not only on Facebook and Instagram but also on all social media platforms, including Twitter, YouTube and Snapchat. “There is no place for racism in the world and there is no place for racism on social media,” the drinks maker’s chairman and CEO James Quincey said.

Another big name in the media discussion was consumer goods giant Procter & Gamble, the world’s biggest advertiser, a trendsetter in the ad world and the top advertiser on Facebook in the US in June, according to Pathmatics data. It hasn’t yet taken part in the campaign but it said it is reviewing all platforms on which it advertises, with its marketing chief, Marc Pritchard, saying that that it wouldn’t advertise “on or near content that we determine is hateful, denigrating or discriminatory.”

“Our approach has been to not to make public declarations of where we stand with individual partners,” a P&G spokesman said. “We are not changing that approach, so you shouldn’t expect to hear more from us on Facebook, or any other advertising platform.”

A boycott to remember

The growth of the campaign could be traced via the performance of the hashtag #StopHateForProfit on Twitter:

The campaign’s reach has been significantly amplified by users who shared their approval of the participating brands. For instance, Ben & Jerry’s tweet announcing their commitment has more than 14.7K likes and 4.5K retweets at the time of writing. Twitter users praised the brand, calling its leadership “truly inspiring” and saying that all corporations need to follow its example.

Some companies used Twitter to directly urge users to support the #StopHateForProfit campaign by spreading its message, and called on other companies to join the fight. For example, Mozilla called on its peers — both tech companies and companies that rely on the internet for their core business — to pull their ads from Facebook and #StopHateForProfit.

Mozilla even offered a tool that randomly chooses a different tech company when users share their support. Such an automatically-generated tweet looks like this: “I think @Amazon should stand in solidarity with @CommonSense, @freepress, and @mozilla. Please pledge to boycott advertising on Facebook’s services in July.”

“Public pressure works. With your help, Facebook will make its platform more accountable to its users, remove hate speech, and provide support to its users most affected by extreme, hateful content,” Mozilla said on its website.

Such pleas have proven to be effective as the campaign become viral and a growing number of small businesses joined the effort, tweeting that even though Facebook ads were essential for them, they would be proud to support the cause. The proliferation of the campaign resulted in an average of 13,210 mentions of #StopHateForProfit per day, as of 1 July.

Apart from praising the organisations that supported the boycott, many users engaged in putting pressure on other large advertisers such as Apple, Disney, Home Depot, Walmart, Amazon, Sprint and AT&T. It remains to be seen whether this social media strategy will play a role in them joining the boycott.

The discussion was also amplified by other social media campaigns such as Stop Funding Hate, which aims to stop companies from advertising in certain British newspapers that use “fear and division to sell more papers”. Stop Funding Hate used Twitter to urge other civil society groups to join #StopHateForProfit, calling it “a pivotal moment in the global struggle against hate speech & misinformation – including climate denial”.

Our social media analysis showed that the boycott does pose some real risks for Facebook: a growing number of small- and medium-sized businesses are joining in, and the recognition big brands receive for their stances could discourage Facebook and Instagram users from spending as much time on the platforms. In addition, the backlash could lead to more regulatory scrutiny for the company, which has already faced concerns on Capitol Hill, particularly from the Democratic Party.

All eyes on Zuck

To find the most influential participants in the Twitter discussion, we calculated the users’ authority score using a methodology similar to Google’s PageRank, an algorithm for ranking web pages in search results. The methodology can be applied to the social network graph of Twitter’s follower relations, where instead of web pages and links, nodes are users and edges indicate follower relations. There is an edge from A to B if B is a follower of A, i.e. edges follow the direction of tweet transmission from a user to their followers.

Using this metric, we found that the most influential user was Donie O’Sullivan (@donnie), a CNN journalist covering disinformation, politics and technology. He wrote a widely shared article about a 22-year-old Facebook software engineer who quit the company after Mark Zuckerberg refused to take action on Trump’s warning that “looting” would lead to “shooting,”. The engineer announced the move in a Facebook post that went viral.

Other influential users were also journalists who wrote on similar topics: Sara Fischer (@sarafischer), a media reporter at Axios, Carole Cadwalladr (@carolecadwall), a Guardian & Observer writer who exposed the Facebook–Cambridge Analytica data scandal, Molly Jong-Fast (@MollyJongFast), editor at large at The Daily Beast, and Judd Legum (@JuddLegum), who writes Popular Information, a newsletter about politics.

The presence of that many journalists in the social media discussion exemplifies the role of traditional media in the social media debate around Facebook. As with any severe backlashes, articles are usually being extensively shared throughout social media, perpetuating the discussion and creating a direct correlation between the volume of traditional media coverage and the level of social media engagement.

Other influential users included Jason Kint (@jason_kint), CEO of Digital Content Next, the only trade association that exclusively represents digital content companies, Roger McNamee (@Moonalice), author of “Zucked: Waking Up to the Facebook Catastrophe”, Rashad Robinson (@rashadrobinson), president Color Of Change, and Scott Galloway (@profgalloway), a professor of marketing at the New York University Stern School of Business.

They have all helped navigate the conversation towards Mark Zuckerberg in particular. According to some, Facebook might be a good choice of company to lobby as its structure gives Zuckerberg a huge amount of power (shareholders aren’t able to put pressure on the CEO as in other companies) and campaigners only need to change the mind of one man.

The increased focus on Zuckerberg made his name more often mentioned than any of the brands participating in the boycott:

Mark Zuckerberg is often the focal point of any scandal and is naturally the first person held responsible for all of the company’s missteps. As we found in our recent analysis of Facebook’s reputation, his actions were the second strongest negative reputation driver

It’s interesting to note that the bulk of the negative coverage was caused not so much by the scandals themselves but rather by the CEO’s crisis communications approach.

Zuckerberg has been explaining himself since 2003 but whenever he issues a statement addressing a certain failure, the media is quick to scrutinise his words and often criticise him for being insincere or unspecific. A common criticism is that he fails to fess up to all the facts at the outset of a crisis and that he generally lacks transparency and seems increasingly out of touch with Facebook users.

He also often fails to follow the standard crisis communications playbook by being too slow to react and to take immediate action without signs of hesitation, which is usually perceived as responsible behaviour, as empirical research has shown.

For example, when the New York Times and the Guardian broke the Cambridge Analytica story, Facebook didn’t seem too eager to implement such measures. Instead, Zuckerberg’s statements and subsequent blog posts framed the misuse of user data as the fault of a few rogue actors, without acknowledging Facebook’s own problems. In addition, the company’s lawyers sent bullying letters to the New York Times and the Guardian, which accelerated the crisis.

When Zuckerberg adopted an apologetic tone and stressed the need to do a better job, he said: “We have a responsibility to protect your data, and if we can’t then we don’t deserve to serve you.” But this statement seemed quite out of place when in September 2018 another security breach exposed the data of 50 million users.

In 2018, Zuckerberg gave a 10-hour testimony to Congress, which was perceived to be more about political theatre than about political regulation. Although some crisis communications experts agreed that he did a good job, many media outlets criticised him for not sharing enough information about his company’s business practices.

In the context of Stop Hate for Profit, many observers felt that Zuckerberg is setting a dangerous precedent by allowing Trump’s controversial post to remain on Facebook. His explanation that people “should be able to see this for themselves” was considered “incomprehensible” and the CEO was blamed for a lack of understanding of historic or modern-day voter suppression.

Furthermore, Zuckerberg was blamed for facilitating Trump’s call for violence against protesters, while many social media users said he is politically biased and is acting as Trump’s chief enabler by giving a voice to white supremacist content.

However, the CEO initially showed no sign of backing down and claimed that all the boycotting advertisers will be back on the platform soon enough, adding: “We’re not going to change our policies or approach on anything because of a threat to a small percent of our revenue.”

On of the top-trending articles on social media was Carole Cadwalladr‘s Guardian piece “Facebook is out of control. If it were a country it would be North Korea“, in which she wrote that Zuckerberg is “much, much more powerful” than Kim Jong-un: “Trump and Zuckerberg have formed an unspoken, almost certainly unstated, strategic alliance.”

Zuckerberg has previously addressed Facebook’s critics from the pages of the Wall Street Journal but instead of taking complete responsibility, he asserted that the company was misunderstood. It was an example of the CEO’s oft-used tactic to argue on semantic grounds, saying that his firm doesn’t “sell” its users’ data but simply charges businesses a fee to access it for advertising purposes.

Reputational moves

Our analysis showed that brands participating in the boycott secured favourable media coverage and praise on social media for putting their principles before their profits. But the social media discussion could also pose some reputational risk for companies such as Apple or Amazon which are being pressured to join the campaign.

In a way, brands made a smart PR move by using the boycott to highlight their values and stances on racial justice at a time when consumers want the corporate world to step up and play a central role in addressing systemic racism, as Edelman found.

Sixty per cent of respondents in Edelman’s survey said that brands must take a stand to publicly speak out against racial injustice and that they need to use their marketing dollars to advocate for racial equality and to educate the public on the issue. That same 60% also said that they will buy or boycott a brand based on if and how it responds to the current protests.

This aligns with another research that found nearly 2 in 3 consumers are now belief-driven buyers – a trend which is now mainstream around the world, spanning different generations and income levels. A brand’s stand is one of the main drivers of interest, as many consumers express purchase intent or intent to advocate for the brand after viewing a product or brand communication relating to the brand’s stand.

Considering these findings, the ad boycott worked well for the boycotting brands’ reputation – paradoxically, the best advertising for them was not to advertise.

The Stop Hate for Profit campaign exemplifies the rise of brand activism – a corporate communication strategy that seeks to exert influence by means of campaigns sustained by political values and aligns with a growing media focus on topics involving corporate social responsibility (CSR).

High-profile media outlets got into the habit of scrutinising companies for their approaches towards the social issues of the day. More than ever, the notion of corporate reputation has come to imply putting purpose before profit and delivering value to all stakeholders instead of merely focusing on the interests of stockholders.

This trend culminated with last August’s Business Roundtable statement, which was met with both support and criticism. For some commentators, the statement was a definitive repudiation of the overarching “Friedman doctrine”, formulated in the 1970s by economist Milton Friedman, according to which the sole social responsibility of business is to increase its profits.

From Facebook’s side, the thread of a consumer boycott is also growing, as the groundswell of new consumer activism gathers momentum with the growing popularity of political activism in general. According to some researchers, consumer activism has become the most common form of political action in the United States aside from voting, with more and more US shoppers starting to understand their purchasing power not just only in economic terms but also as an enactment of practical ethics.

For more on this topic, read our analysis: “Consumer Activism: A Growing Threat to Corporate Reputation”.

Consumer boycotts usually stem from anger, the emotion that spreads faster and farther on social media than any other, as per a study conducted by Beihang University. The spread of anger often results in outrage cascades — outbursts of moral judgment which start to drive the conversation around brands, their products and their corporate messages. The virality of moral judgements is facilitated by the fact that most of the content on social media feeds and timelines is sorted according to its likelihood to generate engagement.

However, boycotts have questionable success rates. There is also little evidence to suggest that boycotts impact revenues of targeted companies. Many critics point out that individual product swaps do nothing to impact legislation and corporate responsibility. For example, Amazon repeatedly manages to smash its sales record despite years of calls to boycott it over its labour conditions.

Still, even if they don’t have an immediate impact on earnings, boycotts can significantly hurt a business’ reputation. Empirical analysis demonstrates that protests are more influential when generating greater media coverage: a study of 133 corporate boycotts conducted by Northwestern University’s Kellogg School of Management found that media coverage of boycotts is detrimental to a company’s reputation and that the stock price of a targeted company dropped by nearly 1% for each day it got national media coverage. Perhaps more importantly, about 25% of boycotts that received national media attention resulted in concessions from the targeted company.

Facing pressure after the privacy sandals, Facebook engaged in a transition of emphasis from the News Feed to a “privacy-focused communications platform” which brings the company’s messaging products to the fore. The new corporate vision was encapsulated by Zuckerberg’s solemn announcement: “The future is private“. It remains to be seen what the company’s future will be after the dust from the ongoing campaign settles.

Read our analysis “From Media Data to Reputation Analytics: A Case Study of Facebook”.