A look at Facebook's top 100 advertisers' spending on day one of the brand boycott
Facebook's top 100 advertisers spent 18.3 percent less on ads on the social network on Wednesday compared to the same day a year ago, reflecting the early effects of the brand boycott, according to Pathmatics, a data and analytics firm.
On Thursday, Pathmatics crunched the numbers on the top 100 Facebook advertisers, not including Instagram spending, and compared it to July 1, 2019. Pathmatics has been watching Facebook advertising patterns throughout the brand protest that has been growing for weeks. The ad freeze began officially on Wednesday.
On July 1, 2019, the top 100 advertisers spent $13.8 million in the U.S., and this year they accounted for $11.2 million in spending in the U.S, a decrease of 18.3 percent, according to Pathmatics. The data show that some of the major brands that joined the protest appeared to comply with the commitment. Starbucks, Target and PepsiCo were all in the top 50 ad spenders last year, but not on the top 100 list on July 1 this time around.
The top 100 advertisers represents only a sliver of Facebook's more than 8 million advertisers.
In 2019, Facebook’s average daily ad revenue was $91.5 million in the U.S. and Canada, according to its earnings reports. Its daily average ad revenue worldwide was $192 million. The top 100 advertisers accounted for about 15 percent of Facebook’s daily U.S. revenue in 2019, based on Pathmatics numbers.
It’s hard to gauge the full impact this could have on Facebook’s yearly revenue, especially if most advertisers abide by the call to freeze spending in July, and then return. A dip in spending could be made up by the millions of other advertisers on Facebook, according to Rich Greenfield, a partner at LightShed Partners, the Wall Street research firm.
“So far, it looks relatively minimal in the grand scheme of Facebook’s global ad revenue,” Greenfield says.
Facebook declined to comment for this story.
In June, civil rights groups, including the Anti-Defamation League, NAACP and Color of Change, organized the ad freeze against Facebook and its affiliate ad platforms, like Instagram, to pressure the company to alter its policies on hate speech.
So far, about 250 companies have joined Stop Hate for Profit, which is what the civil rights groups named the movement. Some companies like Unilever and VF Corp. represent multiple brands, raising the overall number of participating brands.
Not every brand in the movement was a big spender on Facebook to begin with, like Mozilla. The web browser company stopped buying Facebook ads years ago. Some brands are pulling back but made the decision to reassess digital advertising on other platforms, too, including YouTube and Twitter.
Shamsul Chowdhury, VP of paid social at Jellyfish, a marketing technology platform, consults with top brands about their online ad mix and says that some brands were weighing up how much an ad pause on Facebook would affect their businesses before joining the protest, while others were considering spending more on the social network. “Some of our advertisers that aren’t participating in the boycott, we’re advising them, ‘Hey, look, if you feel comfortable still being in-market then you might want to look at the opportunity,’” Chowdhury says. “Because of reduced costs, it may be more valuable to increase your investment and get more bang for your buck.”
Jellyfish will be watching Facebook’s ad platform to see if the price of ads goes down in the coming days as competition becomes softer. “That gives [brands] an opportunity to sort of pick that audience up at cheaper costs because … one less higher-spending advertiser is out of the mix.”
The lower cost of the ads could contribute to the lower revenue haul that Pathmatics detected on Facebook.
For instance, Procter & Gamble was still spending on Facebook, but at a significantly reduced rate. Two of its biggest rivals Unilever and Kimberly-Clark were sitting out with the protesters.
On June 25, P&G was the No. 1 advertiser, spending $850,000 on Facebook in the U.S. But on July 1, the company was down to No. 7, with $243,000 in spending in the U.S.
The civil rights activists and brands want Facebook to take a tougher stance against hate speech and expand its definition of what constitutes offensive content. The groups have 10 demands, including appointing a new executive with expertise in civil rights. For advertisers, the protesters want more transparency from Facebook to prove it can catch harmful material, like it says it does, and prevent ads from running alongside what they consider to be hate speech.
Facebook has made policy updates in the past two weeks, giving it more power to moderate political ads that contain offensive material. It also has shown a stronger hand removing harmful users, like people affiliated with the "Boogaloo" movement. This week, Facebook acted against more than 500 Pages and Groups linked to the subversive ideology. Also, Facebook executives are working with the civil rights groups. Next week, CEO Mark Zuckerberg is set to meet with ADL, NAACP and Color of Change, according to people familiar with the plans.
Even before the boycott, brands were nervous about digital advertising environments, where they have less control over where ads get placed, because of the automated nature of serving ads online.
Pathmatics data show the retrenchment. On June 1, at the peak of the protests over the killing of George Floyd, ad spending on Facebook was even lower than it was this week. On June 1, the top 100 brands spent $9.5 million on Facebook, according to Pathmatics, 15.3 percent lower than July 1 spending.
Pathmatics detected spending picking up throughout June before dropping off in the final week. On June 25, the top 100 advertisers spent $12.8 million in the U.S., which was 12.4 percent higher than the top 100 spent on July 1.
The brands in the top 100 have changed, too, according to Pathmatics. As some brands turned off, others turned up. For instance, Disney was in the top 10 spenders for most of the last week of June, and then it fell off the top 100, according to Pathmatics.
HBO, which is owned by WarnerMedia and has been marketing its new streaming service HBO Max, was in the top 3 advertisers on Facebook for the week leading up to July 1, and then fell dramatically to No. 42, according to Pathmatics. Streaming services could have a more difficult time turning off all their spending on a major social media platform at a time when competition is high. The players in the streaming wars, like HBO Max and NBCUniversal, are all going after subscribers, and they have been some of the biggest digital marketers during the coronavirus pandemic.
AT&T, which owns WarnerMedia, is still in the top 10 of Facebook advertisers, according to Pathmatics. Telecom rival Verizon joined the boycott.
A search through Facebook's ad library, which it created as one of its transparency steps to appease activists last year, reveals all the advertisers on the platform within the past seven days. The library also shows all political advertisers, and retains those ads for longer.
The archive showed that NBC was still marketing Peacock, the new streaming service, on Facebook. Peacock and NBCUniversal were not among Facebook's top 100 advertisers, according to Pathmatics.
“We are actively engaged in conversations with Facebook to address the use of hate speech and other objectionable content on their platform,” Peacock told Ad Age on Thursday. “We are closely monitoring the situation and evaluating next steps, including altering advertising plans, if necessary.”
Peacock said it would participate in Blackout Tuesday on July 7, which is the second month in a row that online activists plan to use their social media feeds for a day to show solidarity with the racial justice movement. Last month, many brands also refrained from buying digital media on Blackout Tuesday. Brands have been taking a stand to express their support for all the protests, and other brands are just toning down their presence while the online conversation turns more serious. That has had an impact on the appetite for digital advertising, in general.
Contributed: Jeanine Poggi and Jack Neff.