Yahoo Finance Black Lives Matter boycotts slashed Facebook advertising spending by 42pc
Facebook's Black Lives Matter boycott caused advertiser spending to crash by more than 40pc in three days, according to new data.
Figures from the marketing analytics firm SocialBakers show the average daily spend in North America dropped from $260 (£229) on June 28 to just $152 on July 1, the first official day of the boycott.
Together with the "Blackout Tuesday" protest on June 2, boycotts accounted for the biggest single-day drops in spending this year, even including the first panicked months of the coronavirus pandemic.
Both events also cut the average "cost per click" of Facebook adverts in North America by about a third, as a dearth of bidders in Facebook's automated auction system drove prices down to levels last seen in March.
But spending already appears to be recovering, suggesting that no boycott has yet grown large enough to seriously threaten the company's bottom line.
Yuval Ben-Itzhak, SocialBakers' chief executive, said he had never seen so many advertisers back a boycott before, though the July boycott had been "less impactful" than Blackout Tuesday.
He said: "I was surprised to see how many brands put their budgets on pause for that day. It just indicates how this topic touched almost everyone in the US and pushed them to take action.
"I remember at the time, we said: 'wow, that's big'. It's really big for so many brands in one day to respond to this call. Even going back to Cambridge Analytica, when there was a call to delete Facebook, I haven't seen this level of response."
However, he predicted that spending would soon "bounce back" and that Facebook's business would remain healthy because advertisers have no other "credible" options.
He went on: "Who else in the world can give you access to two billion users? It just doesn't exist. No one comes close to that volume of engagement. That's the only reason brands are spending money there, and they will keep spending money until there is an alternative."
Wall Street appeared to agree, with shares falling by as much as 8pc in late June as the boycott picked up major backers such as Unilever and Coca-Cola but returning to an all-time high on Tuesday.
Although adverts cost per click has not yet recovered, Facebook can still prosper while prices are low because many advertisers simply opt to get more mileage from the same level of spending.
SocialBakers's data is drawn from panels of at least 200 advertisers of various sizes who use its analytics service, providing a proxy for Facebook advertisers as a whole.
It remains unclear how much money Facebook will actually lose. Its chief executive Mark Zuckerberg said last week that he believes only a "small per cent" of its revenue is at stake.
Nevertheless, civil rights activists vowed to keep up the boycott after coming away "deeply disappointed" from a meeting with Mr Zuckerberg and his lieutenants on Tuesday.
On Wednesday, the company published the results of a two-year self-commissioned audit of its civil rights record. The audit found "serious setbacks" that have marred the social network's progress on matters such as hate speech, misinformation and bias.
