'Morally impossible': Some advertisers take a timeout from Facebook

Amid criticism, some advertisers are taking time out from Facebook. Photo / New York Times

Nima Gardideh, the co-founder of a digital advertising agency, has encouraged his clients to hold back millions in advertising dollars from Facebook.

It struck him as "borderline tone-deaf" to run ads on social media platforms when they were being used to organise protests against racism and police brutality, he said. And the money spent on ads might have been wasted because the usual concerns of consumers seemed not to amount to much at a historic moment.

But there was something else weighing on his mind: Facebook's hands-off attitude toward President Donald Trump's aggressive, misleading posts.

"We harshly disagree with how Facebook has approached this," said Gardideh, co-founder of Pearmill, a New York marketing agency with a dozen clients, mostly tech startups. "For the past couple of years, this problem has become bigger and bigger. These massive platforms have to care about free speech issues to some extent, but Facebook is on the extreme end of not caring."

Unlike Twitter and Snap, which have toughened their stances against Trump's online statements that contain misinformation or promote violence, Facebook has held firm on its decision to leave his posts alone. Mark Zuckerberg, Facebook's chief executive, has defended the policy, despite the resignations of some staff members and public criticism from current and former employees.

In recent days, many companies have cautiously returned to advertising, after having pulled back during the height of the pandemic in the United States. But some have decided not to advertise on Facebook, now that it has become clear that Zuckerberg will give the president a wide berth.

"I think this is Facebook's time of reckoning," said Dave Morgan, chief executive of Simulmedia, a company that works with advertisers on targeted television advertising. "It may not be immediate or dramatic, but advertisers have given Facebook a lot of passes, and now we are hearing they are saying it will be harder to stand back."

In late May, the social media companies' dealings with the president diverged. Twitter started fact-checking Trump and posted an addendum to a tweet that called for military action against participants in a protest whom Trump had described as "THUGS."

"This Tweet violated the Twitter Rules about glorifying violence," the company said in a note attached to Trump's statement.

Facebook reacted differently, allowing the same statement to go unflagged.

Around the same time, companies were struggling with how and whether to address the worldwide demonstrations prompted by the killing of George Floyd, a black man who died last month in Minneapolis after a white police officer pinned him to the ground. On June 2, in an effort that became known as Blackout Tuesday, many advertisers posted images of black boxes instead of paid ads, a gesture intended to show support for the protests.

"They began to realize that all of their messaging was off-target," said Rishad Tobaccowala, a former advertising executive who is now an author and marketing adviser.

Facebook generates 98% of its revenue through ads. It netted $17.4 billion from advertising in its most recent quarter. The pandemic has hurt advertising sales in general, and some companies are still "incredibly challenged," said Carolyn Everson, Facebook's vice president for global marketing solutions. Blackout Tuesday "really had a very significant role on our platforms," Everson added, with hundreds of companies pausing their spending.

Since then, ad revenue has mostly recovered for the company, she said, although several companies have been slow to return as they adjusted their messaging. Nike, Anheuser-Busch and others each slashed their daily Facebook and Instagram spending by more than $100,000 in early June, according to advertising analytics platform Pathmatics.

Twitter has started to flag some of President Trump's tweets that violate the company's terms. Photo / Getty Images

Some smaller advertisers — including authors, therapy providers and payment companies — described their break from Facebook as a protest against the platform and its subsidiaries.

Simris, an algae-growing business in Sweden, wrote in a LinkedIn post that it was "vitally dependent on digital marketing" but unwilling to "continue to enable a sick system with our funds."

"The current developments have now rendered it morally impossible for us to continue feeding the same hand that complacently offers its services as the major platform for hate-mongering, promotion of violence, and disinformation," the company wrote.

Last week, Braze, a software company in New York, withdrew a Facebook ad campaign it had planned later this summer valued at around $60,000. Its chief marketing officer, Sara Spivey, said Facebook's decision to leave presidential statements untouched factored into the decision.

"Facebook is the biggest publishing platform arguably in the world, so of course we want to be on it," Spivey said. "But the bigger question is Facebook's responsibility to make its platform safe and if we want to be associated with it."

Mark Zuckerberg, Facebook founder and CEO. Photo / Getty Images

Abe Kasbo, head of marketing agency Verasoni Worldwide in Fairfield, New Jersey, said his agency ceased all Facebook ads soon after Zuckerberg's comments defending Trump's posts. Verasoni, a small agency representing regional banks and retailers, said it stopped its $6,000 monthly budget on Facebook ads.

"The amplification of divisive speech and the lack of responsibility that Facebook is taking as a platform forced this," Kasbo said.

Everson, the Facebook executive who deals with marketers, said she had never worked more closely with Zuckerberg than she has in the past week. She acknowledged that the company's decision on Trump's social-media statements "is not a decision that everyone agrees is a perfect decision."

On Friday night, she sent a personal note to top advertisers, attached to a long public post from Zuckerberg that promised to review some of Facebook's policies. She said that most of her discussions with clients now focused on efforts to dismantle systemic racial inequality within companies.

"Ninety-nine-point-nine percent of the conversation has moved off the decision about the Trump post," she said. "It actually would minimize the importance of this moment historically to just focus on one post from President Trump."

The Trump campaign spent more than $2.8 million advertising on the platform last month, according to Advertising Analytics, a media tracking firm. Combined with spending by the Trump Make America Great Again Committee, a joint effort with the Republican National Committee, the president's reelection team was the 10th largest advertiser on Facebook behind Samsung, Microsoft and The Walt Disney Co., according to Pathmatics.

Most of Facebook's 8 million advertisers are small businesses or individuals, who "continue to depend and rely on our platforms," Everson said. Many of them are uncomfortable with the negativity on the platform but feel they have no choice but to keep promoting themselves on it.

Gardideh, of Pearmill, said his clients had tripled their advertising spending in the past four months, as the pandemic pushed down the cost for ad space. In the past few days, some of them shifted some of their Facebook budgets to Google and LinkedIn, he said, or paused social media marketing entirely.

He conceded that his clients were likely to return to Facebook soon because the platform "is just the best option there is right now, in terms of cost and scale," he said.

Lutchi Gayot, a small-business owner and congressional candidate in New York, said he paid for Facebook ads while feeling conflicted about it.

"The moral thing to do, of course, is to stand on the side that's right," he said. "But it's hard — Facebook ads are keeping small businesses alive. If you're not on Facebook, you don't exist."

Written by: Tiffany Hsu and Cecilia Kang
Photographs by: Jim Wilson
© 2020 THE NEW YORK TIMES