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Ideas. Insights. Inspiration.

Writer's pictureDavid Pullara

Intentions vs Impact



Google "brands boycotting Facebook" and click on the news tabs, and you can read all about the growing number of advertisers taking a public stand against the platform's unwillingness to moderate hateful content on their platform.


But will these actions have a significant and long-term impact?


Probably not.


Good intentions. Negligible impact.


As Chartr effectively illustrated last week, Facebook's Top 100 advertisers spent $4.2 billion on the platform in 2019. That's a big number... until you consider that Facebook's total 2019 revenue was $69.7 billion. That means that even if 100% of Facebook's Top 100 advertisers dropped their advertising spend to zero -- and according to that same Chartr article, only 37 have joined the boycott so far -- it would represent a total revenue loss of just 6%.


The vast majority of Facebook's revenue comes from small and medium-sized businesses (SMBs); they may not like all the hateful content that can be found on the platform, but many have come to rely on the traffic (and subsequent revenue) that Facebook advertising generates for their businesses. The unfortunate reality is that SMBs don't often have the luxury of taking symbolic stances, especially if their businesses have been ravaged by the COVID-19 pandemic and they're just trying to survive. So they'll continue to advertise with Facebook as long as people continue to use their platforms and the spending continues to deliver a good ROI. Ironically, big businesses exiting the platform may actually help smaller businesses who continue to use it, as an increase in ad-inventory may cause CPM rates to decline in response.


Let's also recognize that Facebook Co-Founder, Chairman, and CEO Mark Zuckerberg is the controlling shareholder of Facebook, and shareholders can't force him out even if that 6% revenue decline materializes and materially impacts Facebook's share price. The public can protest all they want, and advertisers can stop spending completely... but if Zuckerberg isn't personally motivated to make changes, or if the world's governments don't force him to do so, then changes aren't going to happen. Full stop.


What would have an impact?


Let's be honest: large companies who claim they will temporarily pause their spending -- but who will subsequently resume spending before Facebook agrees to make significant changes to the way it operates -- aren't going to have any real impact at all. The momentary loss of advertising revenue will be negligible to Facebook (i.e. no impact), and today's consumers are likely to see these actions for what they are: virtue-signalling without the actual virtue.


Paradoxically, these large companies could do more good for society by continuing to spend on Facebook. They could declare their intentions to use their vast marketing budgets in a different way -- to promote messages of inclusion and belonging, for example -- and drive up the CPMs for those who would otherwise use the ad-inventory for nefarious purposes. Those big companies could simultaneously declare their intentions to use their big budgets to help SMBs find other ways to attract customers and provide the tools, education, and funding needed for them to eventually wean themselves off of Facebook advertising. That might get Zuckerberg's attention.


And what about those companies who publicly declare their intentions to stop advertising on Facebook indefinitely?


They can definitely have an impact... just not on Facebook.


Not right away, at least.


Those organizations that believe Facebook's interests and values are no longer aligned with their own could publicly commit to halting all advertising until Facebook makes significant and lasting changes to the way they operate. The immediate impact of that declaration would be on the stakeholders of those companies, who'll see proof-positive that the companies are willing to live their values by forgoing the significant traffic (and subsequent revenue) that advertising on Facebook can deliver. The direct impact on Facebook would still be negligible, but the impact on those companies' own stakeholders will be positive and significant.


And if those companies prove they can thrive without Facebook, and share that news publicly? They might eventually begin to convince SMBs that the platform isn't as necessary for growth as they once thought.


That would definitely get Zuckerberg's attention.


Intentions are important. Impact matters more.


Always think about how you can have the biggest impact.


- dp


P.S. As I was writing this piece, Tom Fishburn's latest brilliant Marketoonist cartoon appeared in my LinkedIn newsfeed. It very effectively illustrates why so many companies have thus far been unwilling to commit to an indefinite halt on advertising spend.

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