Why advertisers are boycotting Facebook

'This is the first time there has been an attempt to use market forces to counter disinformation on social media,' notes Devangshu Datta.
Illustration: Uttam Ghosh/Rediff.com

The advertising boycott of Facebook and its subsidiaries, like Instagram, has gathered momentum with some speed.

Over 600 brands have publicly pulled back from advertising on Facebook in the last few days.

The boycott was triggered by Facebook's refusal to proactively remove hate content and fact-check misleading information or lies in political advertising. It happened in the wake of the Black Lives Matter protests.

Facebook (along with Google) is one of the two largest consolidated global media platforms.

Facebook earned $70 billion in 2019 as advertising revenues and that amounted to 98 per cent of its total revenues.

The network, or rather its CEO Mark Zuckerberg, is hanging tough in the refusal to adopt a stronger moderation policy.

There is support within the ranks of its employees (many of whom are also shareholders) for the boycott.

But unlike most listed companies, Mr Zuckerberg is the only decision-maker here. The equity structure leaves him with voting control.

Analysts estimate the current boycott will be limited in financial impact, reducing Facebook's annual revenues by about 5 per cent.

Mr Zuckerberg seems ready to forego that, and suffer whatever wealth-erosion may occur due to shares being sold down. He believes advertisers will return.

<p">Outreach on Facebook is foundational to the Trump re-election campaign. Facebook has been a key platform for political campaigns since Barack Obama leveraged it back in 2008.

The 2016 US presidential campaign, along with the Brexit referendum earlier the same year, involved massive manipulation of voters on Facebook.

As Cambridge Analytica demonstrated, it is easy to generate cross-referenced information to micro-target Facebook users. This is as true for selling timeshare holidays, or mango pickles, as it is for selling political viewpoints.

A large number of Facebook users get their news largely, or solely, from what they access on the platform.

The number varies from region to region. Supposedly 44 per cent of Americans use their respective Facebook feeds as a primary news source.

In India, a lot of people get their news from WhatsApp (another Facebook subsidiary) but fewer Indians get news directly from Facebook.

The content, including the news and opinions and ads, you see on your Facebook feed is specifically curated to fit your tastes, interests and inclinations.

The news feed is a bubble -- any poison injected into it is likely to have a good strike rate because it fits with something in your online personality.

Facebook fact-checks non-political ad content, and it removes some hate speech. For example, it recently pulled out Trump campaign content, which contained a Nazi symbol of coloured inverted triangles.

It's well-known that the Nazi regime marked out Jews by forcing them to wear a yellow Star of David. It's less well-known perhaps that it also used inverted triangles with colour-codes to identify various categories of political prisoners.

But White Supremacists who worship Hitler are aware of it, so this is useful dog-whistling.

A lot of hate content slips through the Facebook moderation process. The Black Lives Matter campaign, for example, was incensed by hateful racist content on Facebook.

It generally doesn't fact-check content in political ads either. This allows the Trump campaign and other political campaigns too, to splice in their own mixtures of disinformation, racism and any other rubbish they push.

On Facebook's part, doubling down makes sense if Mr Zuckerberg thinks the money from political advertising will compensate for the loss of corporate ad-revenue.

This is peak season for generating political revenue as the 2020 US presidential election draws closer. It's reasonable to assume the corporates will return, given no alternative in terms of targeting, or reach.

On their part, the corporates may be trying to do many different things. They may be virtue signalling when they were going to cut marketing budgets anyhow.

They may be gambling the Trump administration is on its way out, and trying to build bridges with the successor. Some may, of course, be genuinely horrified by hate speech and misinformation.

This is the first time there has been an attempt to use market forces to counter disinformation on social media. Whatever the motivations may be, it will be interesting to see outcomes.

Feature Production: Rajesh Alva/Rediff.com