Even brands not in the Facebook boycott have shifted social ad spend
Brands’ spending patterns on digital media have gone a little haywire in the first two weeks in July, partly due to the Facebook boycott, but some marketers are also spending less on Twitter, according to new data from Pathmatics, which tracks U.S. online ad spending. YouTube appears to be the beneficiary of a windfall of marketing dollars from some of the major brands like Geico, Hulu and Samsung moving money to its channel.
Some brands Pathmatics analyzed were not public proponents of the boycott, but their spending shifted away from Facebook, including McDonald's, Kraft Heinz, LinkedIn, Geico and Hulu, which is owned by The Walt Disney Co. Some brands, including McDonald's, pulled spending from Twitter, too.
In the first 10 days of July, Facebook’s top advertisers spent 19 percent less on the social network compared to the same period in 2019, according to Pathmatics. Meanwhile, the top advertisers on Twitter decreased spending by 9 percent compared to the same period in 2019. Pathmatics looked at the top 1,000 spenders on Facebook and Twitter, and compared their combined daily average spending on the platforms in the U.S.
“We see these trends as a representation of the effects of a tumultuous year characterized by economic and political uncertainty, an international pandemic, and an increase in the need for honesty and accountability from brands and advertisers,” says Sarah Fleishman, senior manager of digital marketing at Pathmatics. “We saw it first with brands changing their messaging to reflect COVID-19 and the Black Lives Matter protests, and then again with the boycotts. There's no doubt brands will continue to spend on digital ads, the question just becomes where, and on what terms.”
Facebook and Twitter declined to comment for this story.
In July 2019, the top 1,000 advertisers spent a combined $28 million daily on average on Facebook. This July, they combined for $22.7 million. Facebook has more than 8 million advertisers, and generated $91.5 million in average daily ad revenue in North America in 2019. Facebook made $70 billion in ad revenue in 2019.
The Facebook boycott attracted the support of a number of its top advertisers, including Unilever, Starbucks, Verizon, Pfizer and The Hershey Co. Civil rights organizations formed a movement called Stop Hate for Profit after criticizing Facebook over its handling of hate speech and disinformation in the wake of racial justice protests that swept the globe in May and June.
Even on Twitter, which has not been the target of the boycott, some brands have been unusually quiet. In July 2019, the top 1,000 advertisers spent an average $2.34 million daily on Twitter, according to Pathmatics. This year, the top 1,000 advertisers spent an average $2.13 million daily, according to Pathmatics.
In 2019, Twitter generated $3.5 billion in revenue, most of it from advertising.
“Brands are trying to lock down and stay away from the content virus that they can pick up by putting ads into environments right now that are full of maybe negative commentary and expressions,” says Donovan Neale-May, executive director of the CMO Council.
Geico, Hulu, Samsung, Pfizer, Hershey, McDonald’s, Starbucks, Kraft Heinz, Molson Coors and LinkedIn were 10 of the highest-spending brands on Facebook during the first half of 2020, accounting for $776,000 in combined average daily spending, according to Pathmatics. In the first 10 days of July, their combined spending was down to $14,200, said Pathmatics, describing them as the top-spending brands whose Facebook ad spend appeared to decline the most in July.
The 10 brands combined spent an average of $2 million a day on YouTube, Amazon and Twitter, an increase of 125 percent from their typical spending during the first half of the year, according to Pathmatics.
McDonald’s, Kraft, LinkedIn, Geico and Hulu, which did not publicly join the Facebook protest movement, declined to comment for this story.
There has been a re-allocation from Facebook, says Shirley Chen, CEO of Narrativ, an e-commerce technology platform that works with many top marketers. “Folks still need to drive marketing growth and customer acquisitions and these dollars are going into other e-commerce channels,” Chen says.
Geico had been spending more than $100,000 a day on average on Facebook in the first half of the year, but has eliminated all spending, according to Pathmatics. It is instead spending an average of $443,000 a day on YouTube, compared to its previous daily average of $195,000 during the first half of the year. Geico also ramped up on Twitter, from an average of $1,000 a day to $4,600 in July, according to Pathmatics.
Hulu ad spend declined on Facebook, increased on YouTube and stayed roughly even on Twitter, according to Pathmatics. Kraft Heinz increased spending on Twitter and YouTube, while dialing back on Facebook.
LinkedIn and Starbucks cut back on Facebook and Twitter but increased ad spend with YouTube.
McDonald’s spent no money on Twitter in the first 10 days of July, after spending an average of $10,600 a day there in the first half of the year, according to Pathmatics. McDonald’s went from spending an average of almost $70,000 a day on Facebook in the first half of the year to approximately $2,800 on average daily in the first 10 days of July. The company increased its YouTube spend from $43,000 a day to $67,000 a day on average in July.
Many visitors on You Tube, the Google-owned site that claims 2 billion monthly viewers, search for product reviews and consumer-related tutorials. “Brands are leaning into where intent already exists on the shopper side,” Chen says.
YouTube has also had brand-safety issues, and faced its own brand boycott in 2017 after ads were appearing near extremist and racist content. Many of the same problems confronting Facebook also exist on YouTube, where viewers can also find hate speech, conspiracies and other objectionable material.
YouTube implemented additional brand controls in recent years that give major marketers more of an ability to direct their ads and understand the environments in which they run. Facebook is working on the same features to get brands to trust the platform.
Pathmatics did not provide overall spending patterns on YouTube that would show whether the platform has seen pullbacks similar to Facebook and Twitter.
For Facebook, the boycott is expected to ease at the end of July, but some brands have signaled they will alter their social media presence through the rest of the year. The environment is unpredictable especially with the 2020 election fraying nerves online and causing strife in online conversations.
“There’s already a lot of pressure to at least suspend ad spending while economic conditions are what they are,” says Andrew Frank, marketing and ad sales analyst at Gartner. “But I assume when the economy comes back advertising will continue to follow the eyeballs back to Facebook. I do think the damage to the reputation, sort of the perception whether Facebook is doing enough to address these issues, those are longer-term intangible effects.”