Starbucks, Coca-Cola and UK-based beer and spirits giant Diageo have joined a growing advertiser boycott of Facebook, but Wall Street analysts are split on its ultimate impact on the tech giant.
About 170 companies of varying sizes have paused ads on Facebook in an organized response to the social networking company’s lax response to misinformation and misleading political speech. General Motors said Monday it is evaluating its spending. During the ongoing Black Lives Matter protests, Facebook has been accused of not intervening as clearly erroneous posts spread fear of sweeping mobilizations by antifascist protesters. Critics say this latest lapse extends an overall trend of Facebook taking a laissez-faire stance toward content circulating on its platforms, including hate speech and political vitriol.
Last Friday, Facebook founder and CEO Mark Zuckerberg said the company was finally planning to take steps toward filtering posts from politicians and other public figures that may violate its policies. In a blog post, he also said the company would remove posts that incite violence or suppress voting.
Shares in Facebook, which tumbled nearly 8% Friday due to the pullout of Unilever and other brands, were up nearly 1% in mid-day trading on Monday, to about $218.
Rohit Kulkarni, a research analyst with MKM Partners, reiterated his “buy” rating on Facebook shares. He said the near-term revenue risk from the boycott is minimal. The company makes most of its revenue (which totaled just shy of $18 billion in the first quarter of 2020) from small and mid-sized businesses and mobile direct-response ads. As an example, he wrote in a note to clients, Procter & Gamble is the largest advertiser in the world, but likely accounts for less than 0.50% of Facebook’s revenue.
Broader softness in advertising due to COVID-19, he added, means a “lower marginal headwind” from the boycott.
Wedbush Securities analyst Bradley Gastwirth took the opposite view in a note to clients. “Given the amount of noise this is drawing, this will have significant impact to Facebook’s business,” he wrote. “Facebook needs to address this issue quickly and effectively in order to stop advertising exits from potentially spiraling out of control.”
The stakes are not immaterial. According to Bloomberg Intelligence, advertiser boycotts in July could cost Facebook more than $250 million in the third quarter if 25% of its top 100 buyers pause spending. The hit could reach $500 million if half of the top ad buyers bail.
"impact" - Google News
June 29, 2020 at 11:31PM
https://ift.tt/3eQ3RLu
Starbucks, Diageo Join Facebook Ad Boycott, But Analysts Split On Financial Impact - Deadline
"impact" - Google News
https://ift.tt/2RIFll8
Shoes Man Tutorial
Pos News Update
Meme Update
Korean Entertainment News
Japan News Update
Bagikan Berita Ini
0 Response to "Starbucks, Diageo Join Facebook Ad Boycott, But Analysts Split On Financial Impact - Deadline"
Post a Comment