Last week, there was a piece of news that affects all brands and advertisers and it is nothing else but the Facebook advertising boycott by many global brands.
The problem started for FAcebook after Mark Zuckerberg refused to take down hate speech and posts promoting violence posted by President Donald Trump. While Mark has taken steps to reassure the world, advertisers and Facebook users, his promises are falling on deaf ears.
On Friday, alone, shares of Facebook crashed by a whopping 8.3%. This sounds like a minor percentage decrease until you do the maths and found out that at least, $56 billion was shaved off the stock market value of Facebook.
The sell-off of the shares of Facebook was triggered by a revolt by advertisers. Anglo-Dutch foods giant, Unilever Plc said it will suspend ads on Facebook. Later on Friday, Coca-Cola Co. said it would pause ads on all social media platforms for at least 30 days, while Honda Motor Co.’s U.S. unit, Hershey Co. and several smaller brands said they would join the boycott.
So as an advertiser who invests substantial parts of your digital investment on Facebook, should you join the boycott?
It is a fundamental question and it depends on the side of the divide you are and more importantly, your brands and or corporate proximity to the U.S and its social-political issues. If you are in the sub-Saharan African region such as Nigeria, you are not likely impacted by the controversy. One positive that could emerge out of this issue is that the boycott could free up inventories, thereby making it cheaper for advertisers who remain on the platform. The big names above are perhaps amongst the top spenders on Facebook and their momentary or permanent exit from Facebook could reduce cost inflation on the platform in the medium and long term.
However, Facebook is still perhaps the biggest force to reckon with in social advertising and because it is very effective in targeting specific audiences, most advertisers who boycotted the platform are perhaps coming back so far as Facebook takes drastic steps to address concerns of its customers.
First published in NEXTGEN, a weekly newsletter of SBI Media Limited.