More companies are temporarily withdrawing ads from Facebook’s FB platform to give strength to the movement against Zuckerberg’s refusal to comply with liberal views.
The company refused to take down President Trump’s comments about the mayhem that people were orchestrating across the country. While no sane person can support endless rioting, Trump’s comment about “when the looting starts, the shooting starts” was viewed as hateful and a threat to shoot looters.
Larger companies like Verizon VZ, Unilever UL and Starbucks SBUX just want to do business, so they are in something of a spot. While they do want the reach that Facebook offers, it’s imperative to distance themselves from issues that can alienate customers, whichever camp they’re in. Besides, a public stand in support of the Stop Hate for Profit movement, as it is called, is a cheaper way to publicity right now.
The movement aims to target posts “promoting hate, bigotry, racism, antisemitism and violence.”
It’s also against Facebook’s inclusion of Breitbart as a trusted news source on the platform. Zuckerberg said its inclusion would contribute to the “breadth of content” on the platform.
Check Your Fact, a subsidiary of Daily Caller, is another one on the hit list, although it has been certified by Poynter’s International Fact-Checking Network (IFCN) as a reliable source, according to Facebook. Daily Caller was founded by Fox News host Tucker Carlson, who sold out his stake last month.
Eliminating right wing representation entirely probably isn’t such a good idea in the interest of truth. It’s like having a single-party political system like China. At any rate, that seems to be Facebook’s rationale in including a couple in its system – that and an attempt to keep Republicans happy to avoid further questioning.
According to media reports, Zuckerberg said, “Usually I tend to think that if someone goes out there and threatens you to do something, that actually kind of puts you in a box where in some ways it’s even harder to do what they want because now it looks like you’re capitulating, and that sets up bad long-term incentives for others to do that [to you] as well.” That’s another way of looking at it.
But how much of an impact can this have on the company?
These large advertisers account for a small percentage of revenue, likely in the single-digits percentage range. The bulk of revenue comes from the rest of its 8 million small advertisers, which are hugely dependent on it. They can’t quickly switch to something else, especially given the reach/relationships they have developed on Facebook. The pandemic was already a dampener for advertising with most companies expected to cut back. The elections are offsetting some of that. With the current level of public rhetoric likely to diminish after the elections, net-net, there may not be much of an impact.
So Zuckerberg was probably right when he told The Information that “My guess is that all these advertisers will be back on the platform soon enough,” and “We’re not gonna change our policies or approach on anything because of a threat to a small percent of our revenue, or to any percent of our revenue.” But he could have been more agreeable about it.
Just Released: Zacks’ 7 Best Stocks for Today
Experts extracted 7 stocks from the list of 220 Zacks Rank #1 Strong Buys that has beaten the market more than 2X over with a stunning average gain of +24.1% per year.
These 7 were selected because of their superior potential for immediate breakout.
See these time-sensitive tickers now >>
Want the latest recommendations from Zacks Investment Research? Today, you can download 7 Best Stocks for the Next 30 Days. Click to get this free report
To read this article on Zacks.com click here.
Zacks Investment Research