The big two tech platforms seem to have hit something of a pothole. Facebook is facing an increasing advertising boycott, and Google has discovered it’s not immune to the general ad downturn. Are we getting closer to the limit of the big tech platforms’ power?
The US-based campaign to encourage advertisers to boycott Facebook (at least through July) mushroomed over the weekend, with major advertisers like telecommunications giant Verizon, consumer cultural icons like Coca-Cola and Starbucks, and consumer goods market leader Unilever joining in — in Unilever’s case until the end of the year.
Facebook is caught between the dollars of its advertisers today and its eagerness to avoid regulation tomorrow. Google, however, faces the challenge of monopoly when there’s limited room to grow.
Facebook under fire
#StopHateForProfit — launched on June 17 — brought together traditional US civil rights and anti-racism groups like the Anti-Defamation League and the National Association for the Advancement of Colored People with campaigning groups like Sleeping Giants to force Facebook to prevent its platforms being used for hate speech.
These latest companies to drop their ad spend are big players: Verizon is a top 20 company by US revenues; Coca-Cola has set advertising trends since the days of Mad Men.
It’s clear that corporate America is joining the boycott to get as close as possible to the right side of history in the cultural reset driven by the Black Lives Matter moment. It’s a recognition that the successful gaming of Facebook’s algorithm by right-wing hate groups makes that desire incompatible with advertising on the platform.
This couldn’t be put clearer than the comment by Unilever’s executive vice president of global media, Luis Di Como, to The Wall Street Journal:
The complexities of the current cultural landscape have placed a renewed responsibility on brands to learn, respond and act to drive a trusted and safe digital ecosystem.
In the age of social responsibility in marketing, the brands of both advertisers and advertising platforms reflect on each other, for good and ill. In that world, Facebook is now a risk — made riskier by its links with Trump and his supporters.
The bigger picture
Last week The New York Times media columnist Ben Smith suggested Facebook is constrained by an implicit deal between Trump and Facebook CEO Mark Zuckerberg to keep out of each other’s way: Facebook will allow the Trump re-election campaign more or less free rein on the platform that was so important in the 2016 election, while the Trump administration will resist calls for tighter regulation.
Zuckerberg has already expressed his concerns about the threat of regulation from an incoming Democratic administration.
Facebook has also stumbled in its boycott response. It took until Friday US time to announce a minor shift from its repeated declarations that it would not moderate political speech, even when as provocative as Trump’s. Now, it will start labelling political speech that violates its rules and will act to prevent voter suppression and moderate hate speech.
Too little, too late to prevent the boycott building steam.
Ultimately, Facebook is constrained by its governance. Using a dual share ownership model allowable under US law, Zuckerberg retains majority control although most of the capital comes from non-voting shares. This means there’s unlikely to be meaningful change until Zuckerberg decides the risk of long-term advertising losses outweighs the danger of regulation by either Trump or a Biden administration. That could be some time.
Meanwhile, Google has its own troubles. The Wall Street Journal reports that Google’s ad revenue is expected to fall in 2020 for the first time. It seems to have a larger scaled version of the problem facing The SMH and The Age: an over-reliance on travel ads in its core search function.
While the Facebook boycott is generating more news (thanks to the schadenfreude of traditional media), both stories suggest we’re getting close to peak unregulated platforms.
Two years or so ago I made a prediction to anyone silly enough to listen to me to the effect that Facebook and Twitter would “self implode” within 10 years.
There has been nothing in the intervening period to suggest to me at least that I am well within my time frame.
Needless to say I find a life without either of these monsters rewarding beyond measure
Anyone familiar with the history of the information technology industry over the last seventy years will know that it is typified by the repeated rise and fading away of industry heavyweights within industry niches. Facebook and Google are simply the latest incarnations of this cycle and I suspect both are currently at their peak – if not slightly past it. A good rule of thumb for when an IT company is approaching its peak is when it becomes a household name and starts to get the attention of mainstream media. From there, it is generally forgotten about by all but IT historians within a decade.
I currently make limited use of Facebook and Google Maps, although I avoid the Google search engine as much as possible (use DuckDuckGo as an alternative, mainly for privacy reasons). I’m also a moderately heavy user of Youtube. All of these services are useful, but I have zero loyalty to any of them. If a better platform with, say, equivalent functionality plus one or two additional things came along, I could be gone from the current ones within thirty minutes. I suspect many, many people are in the same position.
That’s how insecure these companies’ grip on power really is. They won’t vanish overnight, but they could come close under the right circumstances.
WOW. Corporate compassion!
We are saved!
Facebook is the least neede or useful company in corporate history. I can’t believe that people continue to support this behemoth.
Their gullibility will be returned in spades, if it disappeared our lives would be enhanced and our polity improved. It is held aloft by Neanderthals.
Don’t get me wrong, that’s a good business model today but how soon before we become “woke”.
It’s a batsh*& crazy world.
In general, I agree with Graseki (Novel, Netscape, IBM, Digital, SUN, etc.) but there are two additional considerations. Firstly, in an environment where Google etc is banned (PRC and others) there are domestic one-to-one corresponding apps so there is a strong public appeal for this stuff that extends across borders.
Secondly, if one wishes to know how FB is governed one need only consider the inception of FB which included a range of offenses from false pretenses to theft and, arguably, fraud by the current CEO.
I recall (I was there) extensive advertising during 2016 in metro stations of cities, and similar, in the USA condemning “fake news” with the smiling face of CEO prominent on the item of advertising. Then we moved from “fake news” to “enhanced discussion” For anyone who thinks that the entire affair is a dream I suggest that they read some Orwell.