Coca-Cola calls off social media advertising to boycott racial discrimination

Marco Green
June 29, 2020

The women's clothing brand announced in a tweet on June 24 that it would pause all ads on Facebook and Instagram for the month of July.

"Given the amount of noise this is drawing, this will have significant impact to Facebook's business", Wedbush Securities analyst Bradley Gastwirth wrote in a research note quoted by Bloomberg, which noted that Facebook Inc.'s shares were down 2.5% in early trading Monday, after falling 8.3% on Friday.

Founder Mark Zuckerberg said Facebook would also ban advertising containing claims "that people of a specific race, ethnicity, national origin, religious affiliation, caste, sexual orientation, gender identity or immigration status" are a threat to others.

Facebook's failure to adequately monitor hate speech and fake news has cost it over $7 billion in advertising losses, Bloomberg reported over the weekend.

In a statement yesterday (Sunday), Starbucks said it would payse advertising on all social platforms while it discussed internally with its media partners and civil-rights organistions over stopping the spread of hate speech.

Facebook depends on companies large and small for generating as much as $70 billion per year through targeted ad revenue, with big corporations making up about ¼ of that. The liquor giant spent $94.9 million on Facebook advertising in the USA alone in 2019, according to estimates by analytics platform Pathmatics.

Diageo is estimated to have spent $22.9 million on Facebook in the US previous year. Coca-Cola, a major force in global advertising, was latest to join brands that said they will cease buying advertising on Facebook.

The marketer's US division on June 26 became the first automaker to publicly join the movement, stating that during July it would "withhold its advertising on Facebook and Instagram, choosing to stand with people united against hate and racism".

Birchbox on Friday said it will pause Facebook and Instagram ads in July and reallocate ad dollars to other platforms.

The social media giant and others like it have already run into censorship of politically-sensitive content in the past.

Coca-Cola, Honda, Hershey's chocolate and Unilever, the world's largest advertiser, all said on Friday they would freeze or cut U.S. spending on Facebook and sister service Instagram, wiping an estimated $56bn from the social media giant's value.

In the wake of the campaign against racial discrimination, over 90 companies have paused advertising in support of #StopHateforProfit.

Facebook accounts for about 23 per cent of the entire United States digital advertising market, according to eMarketer. Further, due to the advertising pullback caused by the pandemic, it will be hard to assess the true financial impacts of any ad boycott, he points out. She added that Facebook is also engaging with NGOs on the matter.

"Companies haven't wanted to make a big number of it because many are afraid of being labelled "greenies" and what could follow".

In a Facebook post and town hall speech broadcast live (see below), Zuckerberg outlined steps to counter some forms of voter suppression, set a higher standard for hateful content in ads and promised more labelling around newsworthy posts, especially by politicians that may violate Facebook policies.

Other reports by Click Lancashire

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