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Comment by unreal37 | Hacker News Reader

I really question what the real purpose of this "boycott" was during a pandemic.

I've worked in advertising for 12+ years. I can easily imagine a company (say, Pepsi), deciding to pause a campaign they were planning to do because they figure the public are not in the mood to see advertising like that. And having nothing in the pipeline to replace it.

So a "boycott" to the public is really just "we don't have much to say right now" in private.

Also, "we need to save a few dollars because our quarterly profits have gone down."

I don't think it was ever any "moral" boycott. It was just an excuse to cut ad spending for a few weeks and avoid being tone deaf during a BLM protest movement.

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I'm also a FB advertiser. Here my thoughts on it:

1) Facebook's reach is unique. If you want to share a message that's important to you with groups of people you care about reaching in the world, there's no better way to reach them at scale.

2) Facebook has had a number of negative sounding news cycles in the past few years (Cambridge Analytica, etc.), and data shows that the average American hasn't changed their behavior based on them. 70% of all Americans and Canadians use Facebook or Instagram at least once a month, and 55% of all Americans and Canadians use it at least once per day. Facebook's monthly and daily user counts have only grown, including this last quarter.

3) Very few advertisers ended up cutting spend during the boycott. Many who did so wanted to cut ad spend in a COVID environment anyway. For instance, Unilever and Coca-Cola also paused Twitter ads, which has nothing to do with the boycott.

4) I myself believe that, at least in comparison to other companies like Google, Facebook does try to police hate speech, and it's a hard job.

1) Facebook is unique. But it is a costly way to reach a target group and usually the goal is to build other channels. Big brands are not looking to reach smaller targeted groups.

2) Daily users/monthly users is not really the stat worth tracking. That number was going to go up because of covid. I wonder about time spent on the site and time spent scrolling. That feels the important metric that has been dropping and tells a different story.

3) doesn't completely tell the story because if coke was cutting anyway that should show up

4) The differences on how each police hate speech doesn't really matter to anyone.

The real reason is 5: 5) Facebook raised prices for everyone else.

I hardly saw ads for any big consumer brands on my Facebook feed even before the boycott. The vast majority of ads are from smaller companies. Not sure if my experience is typical?

I see the same thing. I see a fair number for businesses actually in my town.

5) is objectively false, CPMs were down on average during this time period, mostly due to lower demand because of COVID.

Facebook runs a VCG auction and is transparent around how payment works on their site, so there's not really any way for them to "raise prices" singlehandedly outside of this mechanism without being legally liable.

This is exactly right. It was a way to get free advertising from cutting your advertising budget.

Two thoughts:

One, I remember a study back when cigarette companies were told they couldn't advertise on television that all major tobacco brands loved this because it meant they didn't have to spend any money on these types of ads. I'm sure there are versions of this all over the place in most marketing strategies.

Two, pardon my cynicism, but I'm sure companies model these things out and take action based on those models. No CEO is just like "yes, let's support a social cause." Randomly picking on a brand, but I'm sure Starbucks started flying a Pride Flag because it made sense to do so for the business.

It probably depends on the industry and market. For cigarettes, they weren’t trying to make people aware of cigarettes, because everyone already knows what they are. The companies were simply fighting for market share, and were at a point where they had to advertise just to keep their market share.

It was a prisoners dilemma, where the whole industry could be more profitable by cutting advertising, but there was always an incentive to ‘defect’ and advertise your product.

The government banning the ads solved this problem for them.

The government taxes cigarettes within a nickel of affordability, so it's not really the cigarette companies who profited from this.

You're correct, government in the USA and Australia for instance, is massively profit-taking via the taxes to the point that they are taking in more revenue per pack than the tobacco companies.

Not sure the logic on that works outs. On the day ads are banned tobacco companies see a drop in their costs, but no change to revenue. The price of their cigarettes neither goes up or down.

Without a price change the government can’t benefit because the tax is proportional to the price.

So tobacco companies see a drop in costs, no change in revenue, which results in increased profits.

In the future the government could increase the tax rate, and try to force tobacco companies to drop prices to compensate, which could allow governments to extract the extra profits from reduced adverts. But that doesn’t strike me as the kind of behaviour governments participate in, a little too complicated and risky. Also very likely to have unforeseen consequences as it’s unlikely that every tobacco company was spending the same proportion of revenue on ads.

Not to say that tax rates didn’t go up. Just seems unlikely to be directly linked to the banning of ads. More likely they went up just because they can keep hiking the taxes until all the tobacco companies go bust.

And it also subsidizes tobacco farmers.

It's taxed beyond affordability in Canada already - at $12+ per pack, a pack-a-day smoker is spending $360/mo on smokes, which is not an insignificant chunk of change for many people. The number of people who I personally know for whom the cost was the driving factor in finally quitting is sizeable, and so it definitely works....

They do now, but there were decades of massive profit between the ad ban and the huge taxes. In the early 90s a carton was still like $10.

And why is it good for business? Because it reflects the moral values of their customers.

No, because ad-spend there was zero sum. If their competitors were going to advertise on TV, they had to too, and that made everyone make less money. It was a coordination problem that the government solved for them by banning it.

This is a fair point - I’m not saying it’s a bad thing that businesses follow along with societal change even if for profit, but I do think we give them too much credit for when they do act this way as if it’s entirely benevolent.

I’m 99% sure that Apple’s CEO really does care about LGBTQ rights...

In case anyone didn't get the reasoning. Tim Cook is gay.

Just because a person is gay doesn’t mean that they care about gay rights, especially if they are a billionaire, because nobody really impinges on a billionaire’s rights. As an analogy, say some anti-Semitism was spreading on Twitter and there was a Jewish CEO of Twitter who didn’t delete it. You couldn’t defend him by saying “he’s Jewish I’m 99% sure he cares about anti-Semitism” because if some thugs decide to beat up a random Jewish person on the street it just isn’t going to be the Twitter CEO.

(not making a statement about Tim Cook because I don’t know anything about his positions on gay rights)

Right, Tim Cook is no Peter Thiel.

Edit: Tim Cook has made numerous public statements in support of gay rights and being gay. My personal favorite: https://www.cnn.com/2018/10/24/tech/tim-cook-gay-apple/index...

> because nobody really impinges on a billionaire’s rights.

https://www.cnn.com/2013/08/09/world/oprah-winfrey-racism-sw...

OK, someone missed out on her fundamental human right to be shown a handbag. Not pleasant, but not a real worry.

This was just a literal case of billionaire being discriminated against.

The bigger point is having money doesn’t stop discrimination.

Someone called the cops on Ving Rhames for sitting in his own house.

https://www.nbcnews.com/news/us-news/actor-ving-rhames-said-...

*I get up, I open the door, there's a red dot pointed at my face from a 9 millimeter, 'Put up your hands.'"

When the execs in a company that cuts its ads spending makes that decision,

Do they say to each other: "let's pretend we're doing this for a good cause and that it's not just to save money. Let's say this: ... to the public and our customers"

Or do they tend to keep pretending, also when talking with each other in private meetings?

I think they probably say something like "You know, during this pandemic we should probably cut our ad spend. Which area do you think we can cut that will cause the least harm during this time? Facebook? Ok, and as a side benefit, we get to say we're opposing hate speech. Decided, we're cutting our Facebook spend."

I think they keep pretending internally but many think in the back of their head that it's all bogus and the real reason for the cut is slashed ad spend.

In any case, this situation reminds me of the time when Google exited China and said they were leaving due to censorship concerns. The real reason for leaving was that Baidu had gained an overwhelming share of the search market. I think at the time of Google leaving China, they had less than 5% market share.

Why would they leave because of small market share? Costs and revenue scale with usage, and Google has near infinite money to invest in improvements.

Being under attack (not just a verbal attack) by the government seems more of a concern. en.wikipedia.org/wiki/Operation_Aurora

From what I understand there was a massive, coordinated, and sustained cyberattack on Google's services that pretty clearly originated from the Chinese government that was interpreted as a pretty clear signal to get out of the Chinese market, along with what you outlined.

North Korea also got involved in that action.

Yes. That was the straw that broke the camel's back, so to speak.

There had been a long string of problematic incidents before that which didn't come into the public though. Frustration and anger about China had been rising for years, and there was a very delicate power balance between Larry, Sergey and Eric going on in which Sergey didn't want to be there, Larry was sort of indifferent (if I recall correctly) and Eric very much wanted to be there. So it led to a lot of tension. When the huge hack happened, it ended up tipping things in Sergey's favour. Probably the lack of ability to make progress in China against Baidu, due almost exclusively due to the PRC's playing-field-tipping incidentally and not Baidu's skill, ended up stripping Eric of most of his intellectual ammo.

Cadbury's are reducing the size of some chocolate bars in the UK but in an insult to our intelligence put out a press release saying it was to "help combat obesity". They didn't shout so loudly that they were keeping prices the same.

Throwaway account from an established HN person. I work with many of the top advertisers in the US. These are not simply PR positions that take advantage of lower marketing expenditures. Many of the top advertisers do not support Facebook’s current advertising and content policies. Would you as a savvy marketer turn off your top 1 or 2 channel instead of lower performing channels? Facebook is typically in the top for both branding and performance media. Wouldn’t the marketing teams save money and maintain healthy performance by shutting down other channels? Facebook has a closed marketplace that protects itself, and gives malevolent actors (certain advertisers) the power to manufacture misinformation at a global scale.

I have first-hand seen other channels soak up the FB funds during this time. It has been interesting to see the diversification into media that historically was not a major investment, because it under performed when compared to FB.

Sure.

I believe your account, but I still wonder whether the opposition to FB is more about it having the power to upset the status quo and how that is a threat to these mega brands.

Is it the ad execs at company 1 & 2 calling the shots or is this a board level decision?

How can you actually tell which brand advertising channel works? From what I know about the CPG market, they historically couldn’t tell except via coupons in newspapers.

Given that every other channel is reporting decreases in revenue I'm going to ask you to provide some proof of this assertion. It should be fairly easy to find.

In my experience (not advertising), this is how most organizations operate. Even non-profit or government ones. If a firm is conspicuously not advertising, they'll get some organic press and maybe goodwill.

I wonder how that boycott was set up and effectively put in place: disabling facebook pixels ? suspend posting on fb pages ? fire community managers ? suspending contracts with ad companies that sell pepsi/others space on the net to advertise ?

Just pausing spend (stopping campaigns in the ad manager. Typically an agency would be told to suspend the campaign and relevant creative (copywriting, art assets) budgets would be paused or diverted to support other media.

I see, hard to believe it was not just a PR and budget move then.

For a lot of these businesses relying on foot traffic, ads would be futile anyway during widespread lockdowns. So really just free point-grabbing.

This whole thing would've been avoided if Mark grew a pair and permanently banned the first companies who did this from ever using FB services again. I really hope he bans media companies who are trying to extort FB right now, the antics would be dropped quickly.

That would be a terrible move. Nobody would want to work with a company that acts so childishly. It would also alienate all of the people who support the cause.

Facebook has not changed its policy with regards to hate speech as far as i'm aware, so these companies don't need to return to use FB services until it does. (Unless of course the protest was always meant as a 2 week gimmick at the expense of FB's reputation).

I hope those stupid compa ies would never come back to FB with their spending. Lack of blue chips on FB allowed SMBs to get cheaper ads on FB and their overall spending is bigger than blue chips so at the end FB benefited from this action. So those stupid companies are pu usher as their SMB competitors increases their market share!

> I hope those stupid compa ies would never come back to FB with their spending. Lack of blue chips on FB allowed SMBs to get cheaper ads on FB and their overall spending is bigger than blue chips so at the end FB benefited from this action. So those stupid companies are pu usher as their SMB competitors increases their market share!

Overall spending is bigger than blue chips? I feel like that's a citation needed. I've worked for companies spending 1 million+ on twitter advertising channel alone, so I'm curious how SMBs could get anywhere near close that level of spend in one channel per month forget about across multiple.

There are a lot more SMBs than Fortune 500s.

It appears other companies are acting potentially childishly. That doesn't mean it's a good move for Facebook to act childishly.

Why ban them when you can ignore them at no cost and accept their money again in the future?

If the decision is beyond your control then letting clients go graciously is good for business. They might be in the market for your services again soon.

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