Boycotts can be extremely effective, as Facebook is discovering.
At the end of the 18th century, the abolitionist movement encouraged the British people to stay away from the goods produced by slaves. It worked. About 300,000 have stopped buying sugar, increasing the pressure for the abolition of slavery.
The Stop Hate for Profit campaign is the latest movement to use the boycott as a political tool. He claims that Facebook is not doing enough to remove racist and hateful content from its platform.
He has convinced a number of large companies to withdraw his advertising from Facebook, including Coca-Cola, Unilever and Starbucks.
Loss of confidence
Can that boycott damage Facebook? The short answer is yes: the vast majority of Facebook’s revenue comes from advertisements.
Aviva Investors’ David Cumming told the BBC Today program that loss of confidence and the alleged absence of a moral code could “destroy the business”.
On Friday, Facebook’s share price fell 8%, making CEO Mark Zuckerberg, at least theoretically, £ 6 billion poorer.
But whether this could be bigger – an existential threat to Facebook’s long-term future – is far less clear.
First of all, this isn’t the first boycott of a social media company.
In 2017, the main brand after the main brand announced that it would stop advertising on YouTube – after the ads were placed alongside racist and homophobic videos.
That particular boycott is now almost completely forgotten. YouTube has changed its ad policies and three years in YouTube’s parent company, Google is doing well.
And there are more reasons to believe that this boycott isn’t as bad for Facebook as you might think.
Many loose change
First, many companies engaged in a month-long boycott in July.
Second, and perhaps most significantly, much of Facebook’s advertising revenue comes from thousands and thousands of small and medium-sized businesses.
CNN reports that the top 100 most expensive brands grossed $ 4.2 billion in Facebook advertising last year, or about 6% of the platform’s advertising revenue.
So far, the vast majority of medium-sized enterprises have not joined.
Mat Morrison, head of strategy for Digital Whiskey advertising agency, told me that there are a huge number of small businesses that “can’t afford not to advertise.”
He says that for small businesses – which are priced out of TV advertising – cheaper and more targeted ads on platforms like Facebook are essential.
“The only way our business works is to have access to this highly targeted audience, which isn’t a mass media audience, so we’ll continue to advertise,” says Morrison.
In a sense, Facebook seems like a good choice to lobby. Facebook’s structure offers Mark Zuckerberg enormous power to influence change. If he wants something, he will get it.
You just need to change a man’s mind.
But the reverse is also true. Shareholders are unable to put pressure on Mr. Zuckerberg in the same way as other companies. If he doesn’t want to act, he won’t.
So far, however, he has shown signs of being ready to move. On Friday, Facebook announced that it would begin tagging hateful content and looking for more ads this week.
These changes will not be enough to make Stop Hate for Profit disappear.
This will be a difficult year for all social media companies. Facebook is absolutely no exception. But companies will always be guided by their balance sheets.
If the boycott drags on in the autumn – and if more and more companies sign up – this could be a decisive year for the social network.