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A Bigger Threat Looms Beyond the Facebook Ad Boycott

Written by Melissa Yap

Brand Safety and Progressive Voices Lead the Facebook Ad Boycott

Facebook is facing a backlash from brands and advertisers alike, but why? It seems like brands fall into two camps: those who are leading the boycott and are trying to sensor conservative voices, or those those who are participating in the boycott due to brand safety concerns.

Advertisers such as Denny’s, Coca-Cola, Unilever, Starbucks, Verizon and Levi’s are among some of the big brands who have chosen to pause ad spend due to hate speech, which had a 10% blow on Facebook’s share price and a $7 Billion hit to Mark Zuckerberg’s wallet. Facebook’s revenues remained strong in the first quarter, with $17 Billion of sales, however it’s expected that the second quarter will be a rough one for most social media technology companies due to the current world events.

While the technology giant still maintains strong cash reserves of $50 Billion despite the boycott, it’s the smaller advertisers that account for most of Facebook’s revenue. SteelHouse CEO Mark Douglas was interviewed on FOX Business to explain why Facebook has a bigger problem to deal with that goes beyond the ad boycott that will impact their bottom line in the long run.

“In the not too distant future, there will be a boycott of Facebook login. Facebook relies on this data to feed the ad engine that those smaller advertisers need to spend on their platform. If Facebook’s data erodes, so will their revenue.”