Facebook's ad revenue could take a hit if more brands follow Unilever's lead on boycott

Facebook’s advertiser boycott is gaining steam: Last Friday,
Unilever became the largest company tocommit to
pulling ad spend on the platform — and not just for July, as the
boycott calls for, but for the rest of 2020. In response, Facebook
CEO Mark Zuckerberg reversed his
original stance Friday afternoon, saying the company would “start
labeling posts it deems newsworthy but that also violates its
policies,” though this doesn’t necessarily address all of the
boycott’s recommendations.

How has the forecast for net facebook ad revenues in the US changed

More advertisers joining the boycott could cause a domino
effect. Last week, we predicted that
even with a growing number of advertisers boycotting, it was
unlikely to affect Facebook’s ad revenues. But this major pullback
from Unilever — and a growing number of brands that have joined
since we last covered it, including Verizon and Honda â€”
could change that. “Unilever making a move like this changes the
calculus for other big brand advertisers, especially Procter
& Gamble
,” said Nicole Perrin, eMarketer principal analyst
at Insider Intelligence. 

But this also present an opportunity for smaller local
businesses and performance marketers that heavily rely on Facebook
for advertising. “Reduced pricing as a result of advertiser
boycotts may attract more spending on campaigns that wouldn’t be
economical at higher prices, and provide better ROI for advertisers
who remain,” said Eric Haggstrom, eMarketer forecasting analyst at
Insider Intelligence. A significant portion of Facebook’s ad
revenues are “driven by a long tail of smaller advertisers for whom
there is no other real option for advertising in terms of reach,
targeting, and attribution,” he added. So if small businesses spend
more money on the platform, this could offset some of Facebook’s
losses from big brands.

For context, we’ve already revised down our 2020 Facebook ad
revenue estimates due to the coronavirus. We expect a 4.9% growth
this year to $31.43 billion, far less than the $36.25 billion we
originally forecast. “Unilever’s move is also coming at a time when
advertisers are looking for efficiencies due to the COVID-19
pandemic, and many brand advertisers curtailed spending on Facebook
earlier this year. It will be difficult to parse out the effects of
the boycott from the effects of the pandemic on Facebook’s bottom
line,” said Perrin.

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Source: FS – All – Entertainment – News
Facebook's ad revenue could take a hit if more brands follow
Unilever's lead on boycott