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Ideas. Insights. Inspiration.

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.