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Facebook prepares to dig in as advertising boycott continues

The advertising industry and civil rights organizations have teamed to ratchet up pressure on the social media giant, but the company is holding firm.
Image: Mark Zuckerberg, head of Facebook Inc., at a technology conference in Paris on May 24, 2018.
Facebook CEO Mark Zuckerberg at a technology conference in Paris on May 24, 2018.Marlene Awaad / Bloomberg via Getty Images file

After weeks of criticism from civil rights groups and hundreds of advertiser cancellations, Facebook CEO Mark Zuckerberg is coming to the table.

Zuckerberg will conduct a virtual meeting Tuesday with the Anti-Defamation League, the NAACP and Color of Change, a civil rights group, which together want a serious, once-and-for-all shake-up in how Facebook runs its platform.

On the groups' list of demands, according to Jonathan Greenblatt, chief executive of the Anti-Defamation League, is to put civil rights leaders in the company's corporate suite, rather than simply leave important issues to diversity-focused human resources executives. The group also wants victims of hate to be able to connect with a live employee at Facebook.

"They have more adherents than Christianity," Greenblatt said. "Why can't they solve this very basic problem? Bigotry is not a business model."

Civil rights organizations aren't the only ones calling for an overhaul. Corporate America, buffeted by roiling societal changes and the economic insecurity brought on by the COVID-19 pandemic, is acutely focused on Facebook.

In the past two weeks, hundreds of advertisers, from Absolut Vodka to Walgreens, have dumped their Facebook ads in protest, leading to millions of dollars in lost revenue as part of the Stop Hate for Profit movement. Some stopped their ads for July, while others, such as Unilever, ended ad campaigns for the rest of the year. Unilever had threatened a boycott over extremism on the platform in 2018.

Facebook has weathered similar calls in recent years while also making some changes to how it handles hate speech. The company has pointed to research that found that it took down 90 percent of hate speech before it was reported, evidence that it has made major strides in its moderation efforts.

Greenblatt wasn't terribly moved by that claim.

"Ford Motor Company doesn't get to say 90 percent of our seat belts work," he said.

Advertisers have never before abandoned Facebook in such numbers, and even though Zuckerberg is reported to have downplayed the impact on the company's business, the feeling among activists and advertisers is that it is under pressure like never before.

A social media agency expert, who spoke on condition of anonymity to discuss private business conversations, said the feeling from Facebook had changed.

"We know our Facebook representatives have been scrambling to try and convince us to stay on the platform," the expert said.

An ad agency executive not authorized to speak publicly about private ad strategies said brands were overhauling all aspects of their ad budgets because of COVID-19, making it easier to pull back from Facebook.

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Facebook's financial loss, which continues to grow but is still small relative to its $70 billion in annual ad revenue, has been a gain for YouTube and Spotify, according to the executive, who added that companies are also diverting Facebook ad dollars to support Black-owned businesses and to their own e-commerce sales initiatives as consumption patterns change drastically.

Facebook has made some changes already. It pledged $1.1 billion toward fighting for racial justice. On June 26, Facebook said it would label some controversial posts as "newsworthy" to let objectionable content from politicians stand.

On June 30, Carolyn Everson, Facebook's vice president of global marketing solutions, shared her frustrations with clients in a public post on her Facebook page.

"These last few weeks have been the hardest stretch of my professional career, with endless days, sleepless nights and more than a few tears. It's devastating when the people and organizations you most respect and admire are criticizing the thing to which you've devoted a decade of your life," she wrote.

Everson, speaking on a call with advertisers last week, said many of the recommendations made by civil rights groups and advertisers were already being implemented. For example, Facebook allows people to block other users and control comments on their posts.

But beyond the changes Facebook has made, there are few indications that it is going to make any major announcements. And that could mean an impasse between Facebook and advertisers.

Three people familiar with Facebook leaders' thinking who were not authorized to speak publicly said the company was listening but was unlikely to announce major policy changes.

Terence Kawaja, chief executive of LUMA Partners, an advisory company that specializes in digital media and marketing mergers and acquisitions, said he worried that Zuckerberg's stance was already clear.

"They ought to reorient their attitude towards this," Kawaja said. "It seems to be one of obstinance."

Dylan Byers contributed.