The growing number of companies that are pausing ads on Facebook in response to the social media giant’s handling of hate speech and violence is starting to have a notable effect on the company’s share price.
Today’s addition is perhaps a straw to break the camel’s back as consumer-good giant Unilever joins Verizon as two major companies pausing ads on the social network in a grand virtue-signaling show.
“Based on the current polarization and the election that we are having in the U.S., there needs to be much more enforcement in the area of hate speech,” said Luis Di Como, Unilever’s executive vice president of global media, in an interview.
“Continuing to advertise on these platforms at this time would not add value to people and society,” the company said in a statement. Its Facebook ban also will cover Instagram.
Mr. Di Como said Unilever would like to see a reduction in the level of hate speech on the platforms and wants independent companies to measure and confirm that progress has been made. As Fortune reports, the movement was launched last week by advocacy groups including the Anti-Defamation League, the National Association for the Advancement of Colored People, and Common Sense Media.
They asked businesses to pause their advertising on Facebook in July to send a “powerful message”:
“Your profits will never be worth promoting hate, bigotry, racism, antisemitism, and violence.”
So far, more than 10 companies, including REI, Patagonia, North Face, Eddie Bauer, Verizon, Upwork, and Unilever’s Ben & Jerry’s, have joined the campaign.
“Facebook, Inc. must take the clear and unequivocal actions to stop its platform from being used to spread and amplify racism and hate,” Ben & Jerry’s tweeted on Tuesday after joining.
Analysts have claimed this virtue-signaling is a nothingburger from a financial perspective.
“It’s not going to do anything to the company, financially,” said Brent Thill, an analyst at investment banking firm Jefferies.
“You have 8 million advertisers. If a handful leave, there’s a short-term air pocket, but it’s minor.”
But, Facebook shares are down over 6% on the headline.
The avalanche has started now and remember “silence is violence” is the new normal, so if you’re a CEO who advertises on Facebook, how do you not boycott now?
And finally, one can’t help but wonder whether these companies are using the riots as an excuse to cut marketing budgets at a time when that action would not be taken as symbolic of a problem for the company.
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