Facebook's Refusal to Crack Down on Trump Posts Could Move Ad Budgets Elsewhere

June 12, 2020
As Twitter waded into controversy for taking steps to fight misinformation and controversial remarks from perhaps its most famous tweeter, President Donald Trump, Facebook has taken the opposite tack, but with no less backlash.
Facebook founder Mark Zuckerberg has decided to let the president speak freely, but that neutral position — especially when Trump's comments seem to encourage violence — is causing some brands to pause and rethink their advertising spends on the platform where they may be allocating their budgets.
"It was only a matter of time before advertisers started pulling dollars due to both the moral and performance concerns that come with Facebook advertising," said advertising agency Operative Media CEO Lorne Brown. "Along with Facebook's controversial hands-off stance, the combination of simplified buying and audience segments on low-quality content can only last so long." 
Operative Media has noticed more of its clients looking into key performance indicators over the last two weeks, indicating that many of them are looking at alternatives to Facebook. 
Another media agency executive told Cheddar that while some brands have paused marketing efforts out of respect for the protests sparked by the police killing of George Floyd and the viral #blackouttuesday campaign, no clients have pulled money directly because of Zuckerberg's decision to allow Trump's opinions to remain on the platform. 
Still, companies have raised concerns about Facebook's recent decision to keep the president's inciting posts up — even more businesses than were concerned when the Cambridge Analytica data breach surfaced, added the executive who spoke on the condition of anonymity due to nondisclosure agreements. 
Earlier this week, the New York Times reported some small companies and advertising agencies are reeling in their ad investments on Facebook's platform because they say allowing Trump's content alongside their marketing is "morally impossible." 
Public and business concern over Facebook's stance hit fever pitch in late May when the president published a post which threatened to send military resources to quell protests and said in part, "when the looting starts, the shooting starts."
However, Facebook told Cheddar its corporate relationships remain strong. "We have the most active advertisers on our services than ever before, demonstrating that businesses continue to rely on personalized advertising in the face of a challenging economy," Facebook's vice president of global marketing Carolyn Everson said. "We saw a small amount of advertisers pause around Blackout Tuesday, and it's largely recovered now. We remain in active conversations with marketers and believe we can be a force for good to help businesses on the road to economic recovery." 
Presumptive Democratic presidential nominee Joe Biden called on Facebook Thursday "to take action – responsible action, action that is critical to the health of our democracy." Among the requests, Biden asked Facebook to promote trustworthy election information, remove false information, stop political candidates and PACs from spreading misinformation, and creating strict rules for everyone to stop election interference, including from the sitting president.
"We live in a democracy, where the elected officials decide the rules around campaigns," Facebook responded in a statement. "Two weeks ago the President of the United States issued an executive order directing Federal agencies to prevent social media sites from engaging in activities like fact-checking political statements. This week, the Democratic candidate for President started a petition calling on us to do the exact opposite. Just as they have done with broadcast networks — where the US government prohibits rejecting politicians' campaign ads — the people's elected representatives should set the rules, and we will follow them. There is an election coming in November and we will protect political speech, even when we strongly disagree with it."
Facebook remains one of the top places for brands to place their digital advertising. About $3 out of every $5 digital ad dollars flow to Google or Facebook, according to February 2020 projections from eMarketer
But the pandemic has made advertisers across the board rethink their strategies. While Facebook is still a must-buy, there are other competitors, including broadcast networks, that are touting the ability to reach large online audiences on top of their premium, brand-safe content. During its virtual Upfront presentation on Friday, Disney touted its 284 million monthly viewers across "the best of entertainment, sports, and streaming" and pointed out that two out of three people online visit Disney properties. It also highlighted its majority stake in Hulu and the shift to streaming viewership.
"Brands concerned with advertising on Facebook will reallocate their ad spend, and that spend will be permanently gone as they'll start to see the benefits of the alternatives," Brown said. With so much of the public interested in where companies stand on social issues and cancel culture, Facebook's decision to remain neutral could hurt it.
"If enough brands look inward at their core values and then decide that Facebook doesn't align and they pull advertising, it could very well impact the platform," said Amber Zent, partner and director of social media at Marcus Thomas LLC. "And even if it doesn't, it sends a message to the brand's audiences about who the brand is, and where they stand."
However, it's still too hard to ignore Facebook's massive online presence. About 1.73 billion people accessed Facebook daily in March 2020, according to the company's latest earnings report. Across its family of products, that number grows to 2.36 billion daily active users. 
"Advertising on Facebook has proven to be remarkably resilient through past crises ranging from Cambridge Analytica to measurement irregularities to brand safety concerns," said Jed Meyer, Ebiquity managing director for North America. "This resilience stems from some combination of the platform's broad reach, scale, and effectiveness, as well as the lack of significant alternatives. In all likelihood, ad dollars will continue to get funneled into Facebook in the face of any boycott campaigns."
And, Facebook's size does make it a great vehicle to reach a large audience with positive messages, Marcus Thomas' Zent added. None of her clients have pulled money yet, but it is a topic of discussion. A Facebook insider noted Everson has also been having conversations with marketers on how to effectively use its platform to present their stances on social issues. 
"Facebook is one of the largest platforms for many of our brands, as they're starting to have conversations about how to communicate their stance on racial inequality, they'll likely rely on the platform to effectively reach their audiences," she said. "It's a dilemma for a lot of brands, especially the smaller brands and businesses that make up a lot of that advertising community and find it to be an effective spend."
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