For Facebook this summer will not be easy. The social network is going through a reputational crisis that could now stick, significantly, to the main source of its income: advertising investment.
Although the latest reports delivered by the platform as well as the forecasts speak of growth in this sector, the reality is that a late decision could cost the social network several billions of dollars.
In recent weeks, in the shadow of censorship and Twitter warnings surrounding messages posted by Donald Trump, Facebook CEO Mark Zuckerberg launched himself against the idea of fact checking all political speeches posted on the social network.
The manager acknowledged in an interview that political discourse is one of the most sensitive parts of a democracy, so voters must see what their politicians are saying.
Zuckerberg has answered an interview for CNBC that neither Facebook nor other social media platforms should be arbiters of the truth, since he assured that political discourse is a sensitive part of democracy, so that people have to be aware of what the politicians say.
The manager’s position was criticized by his own and by others. Zuckerberg’s remarks were the focus of a series of discussions that led to the resignation of many employees as well as a series of protests against this position.
Direct to advertising investment
Although this could be read as another image crisis for the social network (which in recent times has already overcome large direct blows to its reputation), the truth is that the reading of the situation changes radically when we consider that the impact is You will feel in the advertising revenue of the brand.
At least that’s how it shows a recent report by The New York Times, which indicates that after evaluating the way in which Facebook would be managing the messages of Donald Trump and the level of responsibility that has been taken around the disinformation, various companies They have decided to stop their advertising investment in the aforementioned service.
Estimates syndicate that major brands would have reduced their investment in the ecosystem led by Facebook by up to $ 100,000.
Things don’t seem to improve. In fact, from The Wall Street Journal they have reported that the agencies begin to be part of this boycott.
According to the newspaper, the online advertising agency, 360i, owned by Dentsu Group, is recommending its clients to curb their budgets aimed at Facebook, while inviting them to join the boycott of the social network led by the NAACP and the Anti -Defamation League Americans, among others.
The beginning of the end?
For Facebook, this should be a move that turns on all alerts. This agency may not be the only one to join and summon its clients to establish a position through advertising investment.
For Zuckerberg’s empire it would be an unprecedented coup. The bulk of the business would be at risk, due to the aggravation of a trend that, derived from the pandemic, has become especially evident.
According to the last financial report of the social network, during the first quarter of the year, his business had a profit of 5 billion dollars, which translates into an increase of 18 percent compared to the same period last year. .
On a timely basis, despite a drop in advertising revenue in late March due to the coronavirus crisis, the technology giant billed $ 17.7 billion in the first three months of the year.
Although everything indicated that the platform would come out of the health emergency well, the truth is that this position is now in a future, due to the reputation crisis that has not been ignored by its advertisers.
Although it is early to talk about « the death of the social network », the truth is that the blow could be especially hard for the company, which could put it at a disadvantage compared to other growing players.
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