A Facebook ad boycott made waves — but it's having very little financial impact on the social media giant
advertisingrevenue will only grow by 10% through October, the company predicted Thursday.
- That's down from 17% in the first quarter thanks to a litany of impacts, including a high-profile advertiser boycott.
- Major spenders including Walmart, Coca-Cola, and Starbucks stopped buying
Facebook's advertising revenue growth is slowing dramatically, but executives were quick to dismiss any notion that the headline-grabbing boycott by would-be buyers is behind the plateau.
In its second-quarter
"It's an interesting situation we find ourselves in because I think oftentimes when companies are boycotted, it's because they don't agree with what the boycotters want," COO Sheryl Sandberg said. "That's not true at all here. We completely agree that we don't want hate on our platforms, and we stand firmly against it. We don't benefit from hate speech. We never have. Users don't want to see it. Advertisers don't want to be associated with it. And we've been working for a really long time to get better at finding it."She also said that Facebook is working with outside organizations to perform a "brand safety audit" that it hopes to release by the end of the third quarter.
That promise did not go over well with civil-rights groups, who met with Sandberg and Zuckerberg in early July and came away frustrated, characterizing the meeting as a "disappointment" and saying it showed Facebook "is not yet ready to address the vitriolic hate on their platform."Facebook only partially addressed hiring a civil-rights expert and "offered no attempt" to address the other demands, the groups said. "We didn't get commitments or time frames or clear outcomes. We expected specifics, and that's not what we heard," Anti-Defamation League CEO Jonathan Greenblatt said on a call with reporters. But Wall Street analysts say the sheer breadth of the Facebook advertiser base can also mitigate the impact from specific defectors.
"With 9 million+ advertisers on the platform, we do not believe the ads boycott will have a major impact," JPMorgan analyst Doug Anmuth said Friday. "Overall, we expect upside to 3Q numbers as marketers ramp up unallocated ad spend in 2H."
Facebook's stock price surged more than 7% in trading Friday following the earnings beat. Shares have easily outpaced market indices amid the coronavirus-induced recession, and are up 20% since the beginning of the year.Additional reporting by Tyler Sonnemaker.
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