The stock moves highlight a new uncertainty about just how much the boycott could dent Facebook’s ad sales machine. Much of Facebook’s ad revenue comes from small and medium-sized businesses, potentially insulating it from too much of a revenue shortfall from the boycott. But some brands like Starbucks do rank high on the list of biggest ad spenders on Facebook, according to estimates by Pathmatics, a market intelligence firm.
“Facebook needs to address this issue quickly and effectively in order to stop advertising exits from potentially spiraling out of control,” said Bradley Gastwirth, chief technology strategist at Wedbush Securities.
A civil rights coalition that includes the Anti-Defamation League (ADL) and the NAACP launched the #StopHateforProfit campaign earlier this month, calling on major corporations to halt advertising on Facebook for the month of July, due to the platform’s “repeated failure to meaningfully address the vast proliferation of hate on its platforms.”
“We have absolutely no incentive to tolerate hate speech,” Clegg told CNN’s Brian Stelter. “We don’t like it, our users don’t like it, advertisers understandably don’t like it. … We benefit from positive human connection — not hate.”
Nicole Perrin, principal analyst at research firm eMarketer, said it will be difficult to “parse out” the effects of the boycott from the impact of the pandemic on Facebook’s bottom line. Some brands, she said, had already paused ad spending due to the pandemic. Meanwhile, other advertisers stepped in to fill the void and take advantage of cheaper prices.
CNN’s Brian Fung contributed to this report.