How #StopHateForProfit Could Impact Small Brands

Over the last few weeks, many major companies including CPG food and beverage brands have joined the #StopHateForProfit initiative, a campaign urging companies to suspend advertising on Facebook throughout July in an effort to pressure the social media platform to address misinformation and hateful content on its sites. Civil rights organizations including the Anti-Defamation League (ADL), the NAACP, Sleeping Giants, Color Of Change, Free Press and Common Sense have joined forces on the boycott against Facebook, which makes $70 billion in advertising revenue annually, and has since amassed nearly 1,000 advertisers.

Now major food and beverage companies are joining the cause, including Unilever, The Hershey Company, KIND Snacks, Clif Bar, Chobani, ConAgra, Califia Farms, Diageo, Pernod Ricard and Campbell Soup Company along with retailers including Target, CVS, Albertsons and Walgreens. Meanwhile, smaller brands such as Nutpods, Partake Foods and Theo Chocolate have also pledged to pull their ads this month.

Others are taking a broader approach. ConAgra has paused its Facebook and Instagram advertising for the rest of the year and Unilever is doing the same, pulling ads from Twitter as well, saying it would “maintain our total planned media investment in the U.S. by shifting to other media.” While Coca-Cola is pausing all social media activity in July “amid concerns over hate speech and misinformation,” the company said it has not officially joined the #StopHateForProfit boycott.

KIND founder Daniel Lutbetzky said the company would “evaluate indefinitely suspending our investments in Facebook” if the company’s practices don’t change. Lubetzky, who is on the board of the ADL, said in a statement last week that despite its plan for a “major new product campaign on Facebook,” the KIND team determined pausing its advertising on the platform “was the right thing to do.”

“We need to communicate to our counterparts at Facebook that, as much as we all care about financial objectives, protecting our society and stopping groups from undermining our democracy, our rule of law, and our social fabric matters far more,” he said.

Leaders of ADL, NAACP, Color of Change and Free Press held a meeting with Facebook CEO Mark Zuckerberg, COO Sheryl Sandberg and other Facebook executives yesterday to discuss the campaign. In a statement on its website yesterday, the campaign wrote that “Mark Zuckerberg and the Facebook team is not yet ready to address the vitriolic hate on their platform.”

“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,” the statement said.

But it remains a question if pulling advertising will impact brands during a time when less and less shoppers are heading to stores, and more are turning to ecommerce — where it can be harder for brands to attract attention — and impulse purchases.

Speaking to Yahoo! Finance on Monday, Lubetzy said he does not expect that the cost of pulling ads from the platforms will be “tremendous” to KIND, given the company can “redeploy those investments” to online video and television. According to a KIND spokesperson, Facebook spend was more than 50% of KIND’s total marketing budget for July. The company spent $2.6 million on advertising in the United States last year, The New York Times reported.

Vasa Martinez, founder of CPG marketing firm Growthbusters, said the boycott could offer brands the opportunity to test out other advertising channels such as Pinterest and Snapchat. However, he said that brands should also be aware that taking on a completely new channel can pose a challenge and is not as simple as managing ads on a platform the brand is already familiar with.

“Facebook has created a level of attribution and targeting that is really hard to compete with,” he said.

For some smaller brands, pulling advertisements on Facebook-owned sites can be a difficult decision due to the potential financial risks it poses. Madeline Haydon, founder and CEO of plant-based creamer brand Nutpods, noted on LinkedIn that small and medium advertisers make up the majority of the platform’s ad revenue, stating that “this hurts us more than Facebook – our ability to make new friends via Facebook and Instagram advertising is important to our growth, but there is no cost too high to eliminate hate speech.” Theo Chocolate wrote in an Instagram statement that while its “advertising dollars may be small, we still believe that the stakes are too high,” though it said it plans to continue to post unpaid content on the platforms.

Martinez noted that smaller brands turning their ads off will face a much more significant challenge than larger brands who “have a larger house file to sustain them through this month,” especially as many smaller brands have already been facing business challenges posed by COVID-19.

“I think that it’s a lot more detrimental to smaller brands to turn things off for a month or for a week even,” Martinez said. “I think that some brands may see a loss in direct consumer sales and acquisition with turning their ads off for one day.”

These challenges could be particularly relevant for direct-to-consumer brands. Martinez said he expects to see many DTC brands continuing to run ads on the platform because “that’s their only form of revenue.”

“For some brands that are predominantly DTC who can’t get their product in store now because of different complications due to the pandemic, turning another channel off, maybe that one month of loss closes things down,” Martinez said. “There’s got to be a way for brands in that circumstance to be able to still show support.”

Ultimately, Martinez said small brands who are unable to turn off ads on Facebook and Instagram due to financial pressure should still focus on putting “community first.”

“I think brands that are very human that have built a voice that’s compassionate, a voice that’s relatable. I think those brands will likely be okay,” Martinez said.