Things for Facebook are becoming increasingly complex. With hundreds of large companies that have decided to join the boycott, Mark Zuckerberg’s social network could see his income significantly compromised.
The wealth of the American businessman was reduced by $ 7.2 billion due to the dispersal of many companies and agencies, while Facebook shares fell 8 percent at the close of operations on Friday, according to Business Insider.
The big ones get off the boat
The stance of the brands towards the little control of hate messages that, they argue, Facebook lacks has caused the disbandment of hundreds of advertisers, who, at least temporarily, have decided to curb their investments in the platform and the rest of the networks social that make up its ecosystem.
The first to join were companies like North Face, Verizon and Hershey Co, which during the last week announced that they stopped or stopped their advertising investments on Facebook and other social networks until things do not change.
These were joined by Unilever, a brand that in recent days indicated that “given our framework of responsibility and the polarized atmosphere in the United States, we have decided that from now and at least until the end of the year, we will not publish brand advertising on the platforms of social media news feed Facebook, Instagram and Twitter in the United States ”, since“ continuing to advertise on these platforms at this time would not add value to people and society ”.
Coca-Cola did the same. On Friday, the Atlanta-based giant announced that it is pausing all digital advertising on social media platforms globally, for at least 30 days, a decision that will begin to take effect from July 1.
« There is no place for racism in the world, and there is no place for racism on social media, » The Coca-Cola Company CEO and President James Quincey said in a statement quoted by various US media outlets.
The last big blow came from the hand of Starbucks, a firm that announced on Sunday that it will suspend advertising on some platforms, following in the footsteps of other multinationals that choose to do an introspective review on which windows and go through which channels they want their brands to be. exhibited.
« We believe in bringing communities together, both in person and online, » a Starbucks spokesman said in remarks to the BBC, adding that the pause will serve to hold « internal conversations and with media partners and civil rights organizations to stop the spread of hate speech. ”
Something important in the case of the Seattle firm is that the brand will not disappear completely, since it said that it will continue to publish on social networks without paid promotion.
SMEs, the lifeguard?
The financial impacts for Facebook of the exit of these investments is already visible and will be more accentuated in the next results report presented by the social network, where although a slight growth may be maintained, this will be well below expectations.
Facebook will post 1 percent revenue growth in the June period, followed by a 7 percent rise in the third quarter, according to current analyst projections, figures that will be by far the smallest increase recorded by the company since it went public.
And it is that although the big brands represent billions for the social network in advertising terms, the truth is that the bulk of this income comes from small companies that have found in the social network a space to expand and grow their businesses.
Although these investments are unitary exponentially less than those of large firms, the reality is that as a whole they represent an important part of Facebook’s business.
The vast majority of 8 million advertisers Facebook’s are small businesses, many of which rely heavily on platform advertising for sales. For this reason, it is almost impossible for them to decide to join the boycott, especially at a time when reviving the economy is vital for these businesses.
Facebook knows it
Some figures are clear in this regard. Towards the beginning of 2017, from . they indicated that Facebook had registered in the previous six months a global increase of 25 percent in the base of its advertisers, a figure mainly driven by small and medium-sized companies (SMEs), based mainly in the region. of Latinamerica.
This responds to the fact that in markets such as Mexico, the social network represents an engine to drive new businesses that even live within the interaction platform owned by Mark Zuckerberg.
This is referred to in a survey carried out by Morning Consult, the results of which indicate that 1 in 3 small entrepreneurs in Mexico built their business supported by Facebook. In fact, one year after the Store section (e-commerce solution) was launched by Facebook in the Mexican market, 68 percent of SMEs in the country stated that using this function allowed them to increase their sales, while the 59 percent hired more employees in response to growing demand.
This trend has been well read by Facebook, which in recent years and months has launched a series of functions and tools to meet the needs of these small advertisers.
For example, it is enough to recognize that in early May Facebook presented some news related to SMEs. Specifically, it is Businesses Nearby (or Nearby Companies) a section that will show the most recent publications of companies and businesses located in a certain perimeter close to the location of the users; same that can be customized between 2 and 800 kilometers. In addition, new stickers were launched on Instagram and Facebook that can be used with the #SupportSmallBusiness hashtag in order to show their support for a particular company.
Not everything is said
Although it is true that SMEs are a solid base for Facebook, the reality is that the social network will need to adjust its policies so as not to lose more than it has already lost.
Although many small brands depend on their presence on Facebook to survive, it is true that many of these will be forced to respond to consumer demand related to the defense of values such as inclusion and respect.
The move could be logical; Experimenting and exploring the options that other giants like Google offer will be on the radar.
We will have to wait to know the changes and modifications promised by Facebook, but what is now foreseeable is the possible exit of more advertisers, at least temporarily, and framed in the category of « big brands ».
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