Ad Boycott and #Blackout Tuesday: What’s the Impact on Facebook Advertising?

Ad Boycott and #Blackout Tuesday: What’s the Impact on Facebook Advertising?

#BlackoutTuesday was a coordinated boycott of social media and business activity in a demonstration of solidarity with the Black Lives Matter movement that took place on Tuesday, June 2, 2020.

In the wake of #BlackoutTuesday, a group of activist organizations including the Anti-Defamation League and the NAACP started an initiative called Stop Hate for Profit, calling on businesses to “hit pause on hate” and suspend all advertising on Facebook for the month of July. This was in response to growing criticism over Facebook’s management of racism and hate speech on the platform. 

By the end of June, more than 150 companies pledged to participate in the boycott, including brands like Coca-Cola, Unilever, Verizon, and Ford. A running list of participating companies can be found on Stop Hate for Profit’s website, in addition to resources detailing how both consumers and businesses can contribute to the group’s cause. 

So, what are the implications of both #BlackoutTuesday and Stop Hate for Profit when it comes to marketers, consumers, and social media platforms?

Going forward, what changes can we expect to see from social media companies in their handling of misinformation and hate speech on their platforms? Will Facebook and Instagram’s extreme dominance and market share in the paid advertising space be impacted by these movements? 

Discover Marketing Professionals Who Amplify BIPOC Voices

#BlackoutTuesday’s Huge Impact on Ad Spend

Blackout Tuesday called for a blackout of activity on social media platforms, for both businesses and the general public, in a show of solidarity with the Black Lives Matter movement. 

Businesses and users participated in many different ways: some brands posted silent video content for extended periods of time, Spotify and Apple Music replaced artist and playlist curation tabs with silent tracks and radio stations dedicated to black artists, and brands across the globe put a temporary pause on their paid advertising campaigns. On Facebook and Instagram, users participated by posting a single photo of a black square alongside the hashtag #BlackoutTuesday. 

According to Socialbakers data, we can see the drastic drop in paid ad spend across the globe on #BlackoutTuesday (June 2): 

Ad spend by region January to June 2020

Northern America saw the largest drop in ad spend, but the chart also shows clear participation in the movement by brands across the globe, especially in Western Europe, Central America, and South America. The decrease in ad spend in the first week of June in Northern America was far greater than any drop in spend during the ongoing COVID-19 crisis, as most regions had started returning to normal spend levels following the pandemic’s initial effects.

As the chart clearly illustrates, ad spend returned to normal levels within a week in most regions, and spend in Northern America not only recovered, but reached a five-month high near the end of June.

#BlackoutTuesday’s Impact on CPC and CPM

As expected, there was also a decrease in the cost metrics cost per click and cost per thousand impressions corresponding to the decrease in total ad spend in the first week of June. Both pricing metrics showed sharp declines due to reduced spend and bidding:

CPC by region January to June 2020
CPM by region January to June 2020

Like total ad spend, CPC and CPM rebounded quickly in Northern America, with ad CPC also reaching a five-month high in the last week of June.

As major brands put a pause to their massive spending on paid social media, the temporary drop in ad costs gave smaller players like local businesses and activist organizations the chance to increase their reach and spread messaging promoting their cause at a discount. 

What #BlackoutTuesday Means for Brands Moving Forward

In the midst of widespread protests and calls for social equality across the United States and the rest of the world, consumers are showing in an unprecedented manner their willingness to boycott, protest, and hold businesses accountable for their actions (or lack thereof). 

In the wake of #BlackoutTuesday and the protests over the killing of George Floyd, we’ve already seen changes in the messaging and content that major brands post on social media. More so than ever, it’s crucial that brands approach all communications with sensitivity, genuity, and empathy – and these communications must align with the actions of the brand or the risk of consumer boycotts and backlash greatly increases. 

One of the great things about social media is its ability to make collectivist action and protest by consumers and the general public easier than ever. With the current cultural climate demanding reform and action from businesses and politicians, consumers are empowered to demand and force real change from brands and organizations. 

The Impact of the Facebook Ad Boycott (Stop Hate for Profit)

More than 150 of the largest brands in the world have agreed to participate in the movement to pause all spending on Facebook in the US for the month of July. These brands include Adidas, Starbucks, Coca-Cola, and some took it even further with Unilever announcing it would pause spending on Facebook, Instagram, and Twitter through at least the end of 2020.

More than 99% of Facebook’s revenue comes from paid advertising, and Unilever alone spends over $40 million on Facebook ads annually

While #BlackoutTuesday led to an enormous decrease in ad spend and ad costs, the movement didn’t explicitly address Facebook or paid advertising at all. Stop Hate for Profit specifically outlines and calls for a complete boycott of advertising on Facebook, and the number of brands formally and informally participating will undoubtedly cause an even bigger drop in ad spend and ad costs than #BlackoutTuesday, and for a much longer period of time.

What does this mean for Facebook? 

Facebook will certainly see lower revenues in the month of July, and how the boycott will impact Facebook’s financials in the long run depends to a large degree on how Facebook decides to address the concerns over misinformation and racist speech on its platform. 

While brands could very well resume buying ads on Facebook after a period of time even if they fail to implement changes that are robust enough to address the problems on their platform, the damaged public perception of the company and consumer backlash could remain unless satisfactory changes are made to Facebook’s handling of misinformation and hate speech. 

We can almost certainly expect Facebook to announce and make changes to address the public’s aforementioned concerns with its platform. Whether or not these reforms are enough to satisfy the public is yet to be determined.

It’s entirely possible that Facebook sees a notable decrease in ad spend (and revenue) for a period of time extending beyond July, however historically the data has shown that Facebook is resilient and that ad spend on the platform will most likely return to normal levels sooner rather than later. 

What does this mean for brands and marketers?

Facebook and Instagram serve as the de-facto leaders in social media advertising when it comes to usage and volume – more than six million marketers leverage Facebook and Instagram in their marketing campaigns and no other social network comes remotely close to matching the spend on these two platforms.

During the boycott, the world’s largest advertising budgets will be freed up and spent on alternative platforms and outlets. As the world’s largest brands and marketing teams experiment with different verticals, we could potentially see a slight (but more permanent) shift in spend to platforms outside of Facebook and Instagram.

It will be interesting to see the degree to which different companies find success exploring alternative marketing channels, and whether Facebook retains the same level of dominance and market share in the paid advertising space after the boycott ends.

Content Marketing Specialist

Get Started With Socialbakers

See how the Socialbakers platform will help your business succeed on social media. Our experts will provide you with a personalized walkthrough tailored to your business objectives.