Jakarta, CNBC Indonesia – A number of large companies are boycotting Facebook by temporarily stopping advertising cooperation on this biggest social media platform. Can this make Facebook bankrupt?
This advertisement boycott is part of the Stop Hate for Profit campaign. This is a recent movement that opposes the use of Facebook as a political tool.
The companies that participated in this campaign agreed that Mark Zuckerberg and Facebook officials did not make enough efforts to remove racial content and hate speech from the platform.
According to David Cumming, Aviva investor, this action could hurt Facebook’s business, create a loss of trust in Facebook, and the absence of a moral code, can “destroy business,” as quoted by the BBC on Wednesday (1/7/2020).
This action has made Facebook shares plummeted 8% on Friday’s trade and made the price of Mark Zuckerberg’s wealth evaporate 6 billion pounds in a day.
But it is not certain this boycott will have a significant impact on Facebook that could make companies go bankrupt. What is certain is that Facebook’s biggest income has come from advertising on its social media platforms.
According to CNN International, citing Pathmatics research, the 100 companies with the highest expenditure only contributed US44.2 billion to Facebook ads last year. This is about 6% of Facebook advertising revenue. They include Home Depot, Walmart, Microsoft, AT&T and Disney.
The rest is contributed by small and medium-sized companies. Until now this advertiser group has not boycotted. It takes a lot of small and medium sized companies so that this boycott makes Facebook’s income threatened.
Head of Strategy for Digital Whiskey agency, Mat Morrison revealed that there are a large number of small business groups that cannot afford not to advertise. Facebook is important for them because ads are cheaper and more focused.
“The only way this business group works is to have access to a very specific audience, which is not a mass media audience, so they will continue to advertise,” explained Mat Morrison.
