Facebook on the Hot Seat Again: Where Will Advertisers Draw the Line?

Last year, a major data privacy scandal gave rise to an “advertiser revolt” against Facebook. The outrage soon faded, but as Facebook encounters yet another wave of bad press, brands may once again begin to question their relationship with the ubiquitous social media platform.

Brands in revolt, temporarily

The roots of the data privacy issue are deep, but the immediate cause of the 2018 advertiser backlash was fairly straightforward.

In March 2018, reports surfaced that information on 50 million Facebook users was accessed without their knowledge during the 2016 election cycle. Behind the data harvesting was Cambridge Analytica, a firm involved with the 2016 Trump presidential campaign.

As the news broke, Unilever was among a number of leading companies to bring up the issue of consumer trust. CEO Keith Weed warned that trusted brands could not afford to be associated with social media platforms that fail to safeguard users’ privacy.

Facebook took steps to smooth the waters. In June 2018 it joined in the launch of the newly formed Global Alliance for Responsible Media, a collaborative effort between brands, ad agencies, and media platforms to address brand protection in the context of  “harmful and misleading media environments.”

When boycotts work

Consumer boycotts are notoriously difficult to sustain, but they do have a chance of success when they involve a leading brand that already shows signs of decline. That appears to be the case with Facebook.

Facebook’s efforts at peacemaking may have reassured its advertisers, but users were not so easily pacified.

Last spring, The Verge reported that Facebook lost 15 million users in the past two years.

In addition, last Friday CBS News reported that Facebook has lost its slot in Interbrand’s list of Top 10 Best Brands, falling from #8 in 2017 to #14 this year.

Aside from the continuing challenge of attracting younger generations, CBS attributed Facebook's problems to the company’s record-setting $5 billing fine with the Federal Trade Commission over Cambridge Analytica’s access to user data.

In addition, Facebook’s ongoing attempts to build support among right-leaning politicians and pundits has motivated an organized backlash from the left.

Business-to-business boycotts can be somewhat more successful. That may also be in play, as controversy builds over Facebook’s attempt to launch the digital currency Libra.

The Libra project initially received substantial backing from the financial community, but leading supporter PayPal jumped ship after consumer watchdogs and members of Congress raised concerns. As of last week, several others — including the five founding members Visa, Mastercard, eBay, Stride and Mercado Pago — also dropped out.

Facebook cleans house…

Over and above these issues, Facebook has also had to deal with an ongoing problem that is built into its DNA: the deliberate use of social media to amplify and spread lies, half-truths, conspiracy theories and political propaganda, especially regarding the efforts of Russia and other countries to interfere in U.S. elections.

Earlier this month, the U.S. Senate released a major report on the issue and concluded that Russia used Facebook and other digital media to interfere with the 2016 election, an effort that is still ongoing.

As if on cue, last week Facebook announced that it had spotted and removed pages, groups, and accounts linked to “coordinated inauthentic behavior” attributed to Russia and Iran.

“We’re constantly working to detect and stop this type of activity because we don’t want our services to be used to manipulate people,” Facebook stated.

…but can’t sweep the fake news under the rug

Facebook left an important loophole in its announcement, though. The company emphasized that it is taking down the fake accounts “based on their behavior, not the content they posted.”

The “not the content” loophole, however, goes right to the heart of the matter.

In a high-profile speech at Georgetown University last week, Facebook co-founder and CEO Mark Zuckerberg reasserted the platform’s core responsibility to protect its users’ freedom of expression (here cited by The Hill):

“Whether you like Facebook or not, I think we need to recognize what is at stake and come together to stand for voice and free expression at this critical moment.”

That’s all well and good, but the U.S. Constitution protects against repression by the government. Private companies are under no constitutional obligation to maintain a hands-off position.

Where advertisers might draw the line

Be that as it may, the “not the content” loophole also extends to advertisers, as Zuckerberg emphasized in his Georgetown speech.

That position is going to be tough for Facebook to defend moving forward. Federal law requires broadcast networks to run political campaign advertisements regardless of content, but other platforms — including social media as well as cable television — are under no such obligation.

The federal no-censorship law also does not cover “issue advertisements” that are paid for by supporters outside of the candidate’s official campaign.

Facebook does have the option to exercise discretion over political advertising. It also has a framework for doing so. Like virtually all other media organizations, the company places a long list of specific restrictions on advertising content. The list includes content that is “disrespectful” as well as content that is false.

While Facebook may be getting its “fake news” problem under control, the company’s persistent defense of falsities in political advertising has already taken center stage in the runup to the 2020 election year.

The leak of audio from a recent Facebook employee internal town hall meeting also reinforces the perception that Facebook has picked sides in the 2020 election.

So far, companies that advertise on Facebook seem to have adopted a wait-and-see attitude. If the environment becomes too “harmful and misleading” during the 2020 election cycle, though, leading brands may decide to sit this one out.

Image credit: John Schnobrich/Unsplash