Analysis: Will Facebook's numerous PR crises boil over or simmer down?

Facebook's recent attempts to appease organisers of the Stop Hate for Profit campaign have failed, despite CEO Mark Zuckerberg and COO Sheryl Sandberg meeting with civil rights groups recently to clarify how it treats hate speech on its website. In a statement on its website, the Stop Hate for Profit campaign said "it was abundantly clear" in its meeting that Zuckerberg and the team "is not yet ready to address the vitriolic hate on [its] platform".

The statement published a week ago added that Zuckerberg "offered the same old defense of" white supremacist, antisemitic, Islamophobic and other hateful groups on Facebook that the Stop Hate For Profit Coalitions, advertisers and society at large have heard too many times before. "Instead of actually responding to the demands of dozens of the platform’s largest advertisers that have joined the #StopHateForProfit ad boycott during the month of July, Facebook wants us to accept the same old rhetoric, repackaged as a fresh response," it added.

The campaign's statement also said that the only recommendation Facebook even attempted to address is hiring a civil rights position but was unable to commit to the crucial piece of the position being at the C-suite level or what the requirements for the position will be. According to the statement, Facebook offered no attempt to respond to the other nine recommendations and Zuckerberg offered no automatic recourse for advertisers whose content runs alongside hateful posts.

"He had no answer for why Facebook recommends hateful groups to users. He refused to agree to provide an option for victims of hate and harassment to connect with a live Facebook representative. He declined to adopt common sense content moderation policies and practices like the ones put forward by the Change the Terms coalition, or develop a process to ensure that their terms of service are fairly applied and do not bend to political expediency," the statement said.

He did not offer any tangible plans on how Facebook will address the rampant disinformation and violent conspiracies on its platform.

"None of this is hard, especially for one of the world’s most innovative companies whose founder coined the term move fast and break things. Zuckerberg, you aren’t breaking things, you are breaking people. With a stroke of a pen, you could make Facebook better for your users, your advertisers, and society. We hope that you continue thinking about the consequences of what you have wrought and come back to the table soon with real change," the statement added.

Separately, Carolyn Everson, Facebook's VP of global business group at Facebook, together with Neil Potts and Guy Rosen from Facebook’s policy team recently conducted a virtual roundtable discussion for media agency leaders to address questions about the work Facebook is doing to prevent harmful content on its platform, engage with civil rights organisations, and advance racial justice and voter engagement. Facebook's spokesperson previously told Marketing in a statement that it is "routine" for the company to have conversations with advertisers and discuss issues, including policy matters. 

Just two years ago, Facebook was also thrown into the spotlight when it was embroiled in the Cambridge Analytica scandal. While the context behind both issues are different, it still garnered the company a certain amount of unwanted attention. With no end in sight to the crisis that Facebook is currently engulfed in, this certainly does no favours for the company on the PR and reputation front.

Speaking to Marketing on the condition of anonymity, a senior PR industry player on the client-side said this campaign was started not to create a system of change at Facebook but to impact its reputation. In essence, it is a PR campaign which was done not to create harm to corporate but rather, to create awareness. According to him, the actual amount of revenue Facebook will lose from this boycott is "very insignificant" as 90% of the ad spend comes from SMEs. This is despite major players such as Unilever, Diageo, Coca-Cola and Lego hitting pause on their Facebook ad spend. 

"This is important because it is the first time we are seeing corporates policing corporates, and I think that's the real change. This is a big step forward in terms of how corporates perform in terms of social, diversity and political issues. I see logos on CNN of the companies that have come together [to support this campaign]. We wouldn't have seen that five years ago, companies would usually have gone through an NGO to get the word out," the industry player explained.

Similarly, a B2B PR consultant to advertising agencies, who also spoke to Marketing on the condition of anonymity, said the boycott is very symbolic and the press headlines emerging from this collective action "is even more symbolic".

This is the first time the advertising community has taken a stand and demanded action from Facebook, and it is a known fact that majority of Facebook's revenue comes from advertising, she said, indicating the collective power of the advertisers. "The brands have demonstrated that they will come together again for causes they believe in. Facebook knows, the advertiser community is the one group it cannot afford to lose. This will shape Facebook's business model for the future," the PR consultant explained. 

The ad boycott is both a PR and temporary business problem

One of the biggest issues that comes with being as ubiquitous as Facebook is that every move the company makes will have ramifications, Vijayaratnam Tharumartnam, PROTON's director, group corporate communications, said. "Whichever way Zuckerberg moves, there are going to be just as many people throwing stones at him. Facebook is the ultimate glass house. It is both a PR and a business problem. But it's also far bigger than that - it is a social problem," Tharumartnam said.

While Facebook has made efforts to be transparent and explain what it plans to do moving forward, these efforts have not won the hearts of critics. To this, Tharumartnam said the company has to decide what its business is going to be and it could probably be more transparent in its activities and making some tough calls commercially too. He explained:

The bigger factor here is the Pareto principle of 80-20. You should be acting 80% of the time and talking 20% of the time. You will be judged more by your actions not by your words.

Besides the fact that actions speak louder than words, it is even more important for Facebook to be authentic. "Say and behave in the way that you are. Do not get stuck on big clever terms such as brand promise and net promoter score, that's commercial," Tharumartnam said. According to him, brands should do what they are supposed to do, treat their customers right and be quick to admit when they have made a mistake. 

Consumers are keeping companies in check

It is impossible to ignore the fact that at the heart of the Stop Hate for Profit campaign lies the issue of brand purpose. The campaign's website said that Facebook has "allowed incitement to violence against protesters" fighting for racial justice in America, and alleged that Facebook had "turned a blind eye to blatant voter suppression" on its platform. The ad boycott comes during a sensitive time, as Black Lives Matter protests have erupted across the US and its citizens are gearing up for the presidential election in November. As such, the purpose and values of brands have come under scrutiny.

According to Lars Voedisch, managing director, principal consultant of PRecious Communications, said the discussion about how Facebook should be dealing with inappropriate content is not new or a one-time thing. It just has come to a new high with attention driven to it through the #StopHateForProfit campaign and subsequent ad boycotts.

"The situation is not focused on a bad business decision by Facebook but questions the overall role of Facebook in people’s lives and whole societies," he said, explaining that it is a general call asking what Facebook stands for. The debate was born out of the Black Lives Matter movement and Facebook, being one of the biggest companies globally, should naturally be at the centre of such a debate.

"At the same time brands, start asking themselves how much their ad dollars are at least indirectly allowing and enabling hate and disinformation to spread. This combination makes the situation very interesting and has the possible power to drive real change," he said.

On a broader level, this incident reveals that more than ever, consumers are standing up for what they believe in, especially in the US, David Lian, MD, Asia, growth and innovation at Zeno Group, said.

According to Lian, the Stop Hate for Profit campaign and recent Facebook ad boycott reveals that consumers want brands they support to use their position and resources purposefully for social good. He added that the campaigns' organisers want Facebook to make dramatic changes to its platform that result in better policing of hate speech, and they are using other advertisers to force the company to act.

We have reached an environment where it is important for brands to be clear about what they do, believe in and show that they take that action.

"It is a stance that is reflective of the world’s heightened focus on racism and civil injustices, and the appetite for genuine change that has come with it," Lian said. Citing the recent 2020 Zeno Strength of Purpose study, Lian said that consumers who believe a brand has strong purpose are four times more likely to purchase from the company, six times more likely to protect the company in the event of a misstep or public criticism, and more than four times more likely to champion the company and recommend it to friends and family. He said that consumers are also four times more likely to trust the company. Meanwhile in general, Asian consumers placed a higher importance on brands that have a strong purpose.

Will the negative publicity impact business in the short term?

The industry player who spoke to Marketing on the condition of anonymity said it is highly likely that the negative publicity will impact Facebook's business in the short term. Facebook, along with Amazon, Netflix and Google are the new primary channels for marketing spend and they are popular platforms among consumers. Based on this, he is of the view that recent developments will not pose a long-term financial challenge for Facebook.

"It will blow over economically for Facebook. It is very baby steps now in the way that we are seeing vulnerabilities being exposed in the way companies are portrayed, in terms of the positive social impact. This may be one wave of many. It could be Facebook today, Snapchat tomorrow and Amazon the next week. I think this specific Facebook matter may well blow over because that's the news cycle," 

Agreeing with him is PROTON's Tharumartnam, who said with the 24-hour news cycle, the public will find someone else to crucify the next day. "People love to gawk and throw stones. There will be another uproar the next day and meanwhile, commerce continues," he added.

The B2B PR consultant to advertising agencies also told Marketing that Facebook has been facing trust issues for several years and it has faced pressure from stakeholders, regulators and public policy advocates on the way it manages user data. However, the industry player said that these stakeholders did not entirely affect Facebook's business much. 

"If you track the growth of Facebook's share value, it has witnessed an upward trend," the industry player said. In fact since 17 June, the day when the Stop Hate for Profit campaign was launched, Facebook share price rose from 230 to 240. While there was an initial dip, it picked up again.

On the other hand, PRecious Communications' Voedisch said the industry has to take note if the Stop Hate for Profit campaign keeps its momentum. "We have to wait if a wider set of businesses will start debating their own purpose, impact and responsibilities and start acting accordingly in the long term or not. This is because your neighbourhood restaurant would not get a PR boost from stopping their Facebook ads but might lose out badly in reaching their customer base," he explained.

What steps should Facebook take next?

As the leader of Facebook, Zuckerberg needs to be front and centre of this discussion. The senior industry player told Marketing that Facebook's failing on this matter has been a result of Zuckerberg being perceived as economically ambivalent around the issue. Likewise, COO Sheryl Sandberg also needs to lean in and be visible and accountable. They need to go beyond staff Zoom calls and be publicly accountable, he said, adding that more accountability in social media should be expected following this.

Likewise, Zeno Group's Lian said this is where Facebook's leadership should take a stand. It needs to look at the current climate and think about what the business stands for and what its values are. "The employees also have to be clear about how they feel about what the leadership is doing with the company. It is a good time to reevaluate what the company exists for and what change it can bring to the world, as well as ensure it is authentic and relevant," Lian added.

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