Facebook frustrates advertisers as boycott over hate speech kicks off

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[July 01, 2020]  By Sheila Dang and Katie Paul

NEW YORK/SAN FRANCISCO (Reuters) - Advertisements for more than 400 brands including Coca-Cola and Starbucks are due to vanish from Facebook on Wednesday, after the failure of last-ditch talks to stop a boycott over hate speech on the site.

U.S. civil rights groups have enlisted the multinationals to help pressure the social media giant into taking concrete steps to block hate speech in the wake of the death of George Floyd and amid a national reckoning over racism..

Facebook executives including Carolyn Everson, vice president of global business solutions, and Neil Potts, public policy director, held at least two meetings with advertisers on Tuesday, the eve of the planned one-month boycott, three sources who participated in the calls told Reuters.

But the executives offered no new details on how they would tackle hate speech, the sources said. Instead, they pointed back to recent press releases, frustrating advertisers on the calls who believe those plans do not go far enough.



"It's simply not moving," said one executive at a major ad agency of the conversations.

Facebook Chief Executive Mark Zuckerberg has agreed to meet with the organizers of the boycott, a spokeswoman said late Tuesday.

U.S. civil rights groups including the Anti-Defamation League, NAACP and Color of Change started the "Stop Hate for Profit" campaign after the death of Floyd, a Black man who died under the knee of a white police officer last month.

The groups outlined 10 demands for Facebook including allowing people who experience severe harassment to speak with a Facebook employee and giving refunds to brands whose ads show up next to offensive content that is later removed.

Facebook said earlier this week it would submit to an audit of its hate speech controls, adding to plans to label newsworthy content that would otherwise violate its policies, following similar practices at other social media platforms such as Twitter Inc.

One digital ad agency representative who participated in a call on Tuesday said Facebook executives referred repeatedly to the audit, without offering additional concessions.

Facebook executives have reached out to chief executives, board members and chief marketing officers of major advertisers to talk them out of the boycott, two people briefed on the discussions told Reuters. All the sources requested anonymity because they were not authorized to speak on the record.

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The Facebook logo is displayed on a mobile phone in this picture illustration taken December 2, 2019. REUTERS/Johanna Geron/Illustration/File Photo

ADVERTISING TEST

The boycott will be a test for advertisers on how to reach billions of consumers without relying on the largest social media platform in the world, an executive at a major ad agency said.

Companies that run ads in order to promote their brand image rather than to make direct sales are less beholden to Facebook. Many of these, including the multinational advertisers who have joined up with the boycott, will begin to plot how they can achieve the same goals without Facebook, the executive said.

For Facebook, the boycott is unlikely to have a big financial impact. The top 100 brands on Facebook in 2019 likely brought in only 6% of Facebook's total $70 billion in annual revenue, according to a Morningstar research note citing Pathmatics data, which measures most types of advertising on the platform. Facebook said last year its top 100 advertisers accountED for less than 20% of total ad revenue.

News of the boycott wiped away $56 billion from Facebook's market capitalization after an 8% drop in its stock on Friday. But shares recovered 3% on Tuesday and are actually trading 8% higher year to date.

ZUCKBERG PRESENCE

Facebook Chief Operating Officer Sheryl Sandberg last week asked to meet with the campaign organizers along with Chief Product Officer Chris Cox, Zuckerberg's long-time friend, who returned to Facebook this month after resigning over the company's direction last year.

The civil rights groups insisted Zuckerberg also be at the table, with Anti-Defamation League Chief Executive Jonathan Greenblatt noting that as CEO, chairman and the company's largest shareholder, "he is the ultimate authority."

The Facebook spokeswoman said late Tuesday that the company had confirmed that Zuckerberg would join the proposed meeting.

"We're waiting to hear back and look forward to the opportunity to continue the dialogue,” she said.


(Reporting by Katie Paul and Sheila Dang; additional reporting by Paresh Dave in San Francisco; editing by Kenneth Li and Jane Wardell)

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