Winmo

The Facebook Boycott—Did Advertisers Move Their Dollars?

In July, despite over a thousand advertisers pausing spending on Facebook as part of a boycott, Facebook's ad revenue remained largely unaffected with only a minor near-term risk estimated, while many large brands like Unilever redirected their advertising budgets away from Facebook and Twitter in the U.S. for the rest of the year, with smaller brands expected to return sooner and overall ad spending trends influenced by broader economic factors and upcoming elections.

In July, over a thousand advertisers paused their spending on Facebook. The campaign did not have a significant impact on Facebook’s revenue—but did those advertisers divert those dollars elsewhere?

MediaRadar conducted an analysis of thirty large brands who participated in the boycott—including Coca-Cola, Unilever, Verizon, and more—to see how these brands advertised across multiple channels in July.

Facebook exits July rather unscathed

Though thousands of advertisers didn’t spend money on this social channel during July, the campaign didn’t impact the platform’s bottom line significantly.

There were already downward trends in advertising spend due to the pandemic, but Wedbush analysts estimate that only $100 million of near-term brand revenue was at risk—which is less than 1% of year-over-year (YoY) growth in Q3.

According to Facebook, its July ad revenue growth performance was in-line with the whole of Q2 and Q3. It expects an ad revenue growth rate of 10% in Q3. Some think this growth rate looks meager—considering it experienced 15% growth in May and June.

Regardless of the interpretation of the numbers, this wasn’t the first time that brands boycotted a social media platform, and brands are likely to return. It’s just a matter of when. Many small to mid-sized brands that depend on Facebook to reach customers will return in August—but several large brands will wait it out until next year.

“With things downturning a bit, brands are spending less. But I think that brands are going to start to spend more once the economy picks up, and possibly also after the (U.S. presidential) election,” said Eric Levy, a lecturer in marketing at Queen Mary University of London.

Unilever, for example, already announced that it won’t be advertising on Facebook or Twitter in the U.S. for the rest of the year.

In the meantime, where are large brands that are not spending on Facebook placing their dollars?

MediaRadar Insights

As a whole, it does not seem that the large brands who participated in the boycott reallocated their marketing dollars to other mediums. When MediaRadar analyzed the sample of thirty brands, they spent 15% less in July month-over-month (MoM) and 21% less YoY.

Across TV, print, and digital (not including social), the same trends were observed. Brands spent less in July compared to June and July 2019.

However, diving further, several companies increased their ad spend on digital websites (excluding social) during the month of July.

Companies that increased spending on non-social digital channels include:

  • VF Corp. (The North Face, Vans, Jansport)
  • Hershey’s
  • Levi Strauss & Co.
  • Chobani
  • Adidas

Collectively, these companies boosted spending by 52% in July (MoM) on digital ads, and by 32% YoY.

While it is impossible to predict exactly how companies will advertise over the next several months, the latest data on spending and creative trends can help guide prospecting.

Related