Did #StopHateForProfit Work? Insights From Facebook’s Earnings Call
Facebook is a publicly listed company, meaning anyone can purchase a part of the company and enjoy the corresponding share in the profit (or loss). This also means that Facebook must host a presentation and Q&A with investors every quarter and provide a publicly available transcript shortly after.
How do I know this nearly totally useless piece of information? Because while studying my economics undergrad, and for a few years after, my part time job was one of the peeps proofreading those transcripts. It was kind of fun? Most of the work was US based so, being in the UK, I would start around 6 in the evening and work through to sometimes 4 in the morning.
I was doing remote work before it was cool, yo.
Anyway, the latest earnings call covers July to September 2020, which includes the July #stophateforprofit boycott where over 1,000 businesses worldwide stopped buying adverts on the Facebook and Instagram platforms. The coverage of whether this boycott made a financial impact to Facebook has been … adequate? Accurate. It’s fine. However given I spent six years on a skill I’ve never directly used since, I decided why not delve into the transcript myself and share the insights with a a bit more of a campaigner’s lens and — dare I say it — a slightly less dry tone (if you want those articles linked above to be less dry, I find that taking a shot every time I start to doze off does the trick).
Come on Sean, Tell Us — Did The Boycott Hit Facebook’s Bottom Line?
Alas friends, probably not. I say probably because there is some consolation, but let’s start with some cold, hard facts.
Figure 1 is Facebook’s total revenue since July 2018. While revenue doesn’t tell us how profitable the company is, it does show us how much money is coming into the organisation. Unfortunately the answer for the past few months is “more than ever before”. In case you’re wondering, $21,470 million worldwide is $21.5 billion. This is an absurd amount of money — in dollar bill stacking terms it is the height of 2.65 Mount Everests. Or put another way Facebook earned $2,761 per second, every second for 90 days. Almost entirely from advertising by the way. They flog some VR headsets too apparently, unironically named “Oculus Quest” which makes me think some marketing manager happened to be reading Ready Player One when they came up with it.
Several other charts didn’t reveal much of interest, but I felt a glimmer of hope when I saw the Monthly Average Users figure had taken a very minor hit in the US & Canada, where the boycott was primarily targeted (figure 2). You can already see how I had adjusted my expectations by now … could it be that, catching wind of the boycott, 1 million users decided to not access Facebook or Instagram somewhere between July and September?
Unfortunately the call’s transcript gives me a less exciting answer — Dave Wehner, Facebook CFO tells us “in Q3 we saw [Monthly Average Users] in the US & Canada decline slightly from Q2 levels which were elevated due to the impact of the pandemic”. In normal human speak, this means people who were bored at home in April to June were slightly less bored or slightly less at home July to September. While executives have been known to lie quite brazenly on earnings calls before — once in a blue moon on those shifts my sad doggo self would turn into happy schadenfreude doggo — I see no reason why Dave would lie about this one. That said…
Something They’re Not Telling Us?
… I did read one thing that I found particularly … suspicious. The aforementioned Dave was pretty keen to tell investors about the growth in advertising amongst Small to Medium Enterprises (SMEs — generally classed as 250 employees or less). However, when some rando Goldman Sachs investor asked during the Q&A portion “any update on the percentage of revenue from the top 100 advertisers?” Dave was suddenly evasive. He said no, Randy, and repeated the spiel about the the strength of SME advertising.
While it’s certainly possible they just haven’t calculated the number, on the balance of probability I seriously doubt it. I’d say the top 100 advertiser revenue has taken a hit this quarter and to bring it up would draw attention to the boycott. This shouldn’t be a surprise because unlike “total revenue” — a figure with a ceiling evidently higher than 2.65 Everests — the “revenue from top 100” stat has a more natural cap and will be sensitive to the action of a few companies. And we know that at least Starbucks, Ford, Microsoft, Pepsi and Pfizer (three of which are definitely in that top 100) halted their ads in July.
But aside from that dodge, there was no mention of the boycott anywhere. Again, this shouldn’t surprise us — after these calls I imagine the execs anxiety refresh the stock market values all night like I anxiety refresh my post to Am I The Asshole on Reddit. I wouldn’t expect the execs to bring up prospective issues unless they’re forced to; and clearly it didn’t matter enough to the investors on the call.
So That’s It? The Boycott Was a Waste of Time?
Woah, slow down there. What #Stophateforprofit managed to achieve in the blink of an eye was huge. This suggestion to boycott Facebook began with just a couple of weeks’ notice. What this showed us is that not for profits, charities and yes corporations too, are willing to come together in the adtech space in the name of human rights, democracy, climate change and — whether you like it or not — brand safety.
But this has also shown us the true size of the beast we are dealing with here. Stopping the tide of $2,761 a second isn’t achieved overnight. Clearly, even making a dent is a genuine challenge.
This brings me to one final insight from this earnings call that gives more context to the numbers. The boycott must have been a small knock in the revenue line, but there has been a much larger offsetting effect: the impact of the Covid-19 pandemic. Here’s a quote from Chief Operations Officer Sheryl Sandberg. Sorry for all the ellipses but trust me on this, I have trimmed this down this monologue for your benefit, not mine:
These [small to medium sized] businesses have faced huge challenges in the pandemic, and they’ve needed to become digital, often for the first time. The free tools we provide … personalized ads … the use of data … to let them buy the audiences they want … are increasingly important. Survival … ability to stay afloat … has really been across the board.
You can take this a couple of ways. The way Sheryl wants it to be taken is for us to recognise what a benevolent player Facebook is in this pandemic, keeping the economy afloat for the average Joanne. But I read it with grave concern. If small to medium sized businesses need to rely on a duopoly of online advertisers (Facebook/Instagram and Google Search) in order to survive, there is something deeply wrong with the way the economy operates in the first place.
Summarising thought: #Stophateforprofit has done a great job mobilising brands, but we’re not going to hold the social media and tech giants to account without more sustained public and governmental campaigning too.
Activism Corner
- If you own a brand, consider joining the #stophateforprofit campaign. They have a newsletter for coordinated efforts but you could also go rogue and freeze/remove Facebook or Instagram ad budget, sharing why you’ve done so with their social media toolkit.
- If you still use Facebook or Instagram — don’t worry, I do too — you can do some armchair activism by commenting on the adverts you see in your newsfeed. Personally I find asking why a values-led company (such as B Corp or self-proclaimed “Social” Enterprise) is supporting an organisation as unethical as Facebook can open up the eyes of the private sector to the issue of brand safety. Sometimes you’ll even get a constructive response.
- I know it doesn’t feel as grandiose, but talking about the problems of Big Tech and Big Social Media with friends and family will help build a groundswell of public opinion across the globe. I am a big believer in influencing those around you first and foremost (just ask my exasperated friends about it). If you want more background I wrote a piece earlier this year on Why Facebook Sucks and one on why you should watch The Social Dilemma. Both of these articles and that documentary have further source material to look at, too.
- Got other suggestions? I’d love to hear them and add them here!
This article took 6hours to research, write, re-write and publish … plus 12 years of industry experience (and in this case sleepless nights of transcribing) so I don’t get it totally wrong. So do be compassionate! You can say thanks by applauding, leaving a comment or sharing this with a friend. I welcome all connection: find me on Twitter @seanforachange or on LinkedIn
