IronFX sees Facebook 60 Billion Dollars in Market Erased

A series of companies have pulled advertising from Facebook, costing Mark Zuckerberg $7.2 billion and pushing Facebook’s shares 8.3% on Friday and 1% on Monday. The two-day stock decline marked the erasure of around $60 billion in market value from Facebook.

Starbucks, PepsiCo, Coca-Cola, Diageo, Unilever, and Verizon have boycotted advertising on Facebook as they believe the social media giant has failed to stop the publication on its platform of hate speech and disinformation. Coca-Cola Co. said that it would pause all of its paid campaigns on all social media platforms for 30 days. On Wednesday, more than 500 companies joined the advertising boycott and Zuckerberg has agreed to meet with the companies’ representatives and the boycott organisers early next week.

While IronFX has not joined the boycott, continuing to provide forex-handel posts on its social media, it does categorically disapprove of the perpetuation of racist speech online.

Facebook responds to boycott from big brands

The Facebook founder said that the company would label all posts regarding voting with a link which directed users to a new voter information hub. However, he also stated that the boycott from these big brands was a PR issue and not a serious threat. For this reason, he explained that “We’re not gonna change our policies or approach on anything because of a threat to a small percent of our revenue, or to any percent of our revenue.” He said that the boycott was a “reputational and a partner issue” and that “all these advertisers will be back on the platform soon enough.”

A Facebook spokesperson reported: “We take these matters very seriously and respect the feedback from our partners. We’re making real progress keeping hate speech off our platform, and we don’t benefit from this kind of content. But as we’ve said, we make policy changes based on principles, not revenue pressures.”

The question is about who needs whom, as Zuckerberg’s attitude portrays, which means that big brands need Facebook, perhaps more than Facebook needs them. The boycott is unlike anything Facebook has experienced before and is a result of the current political climate as more brands are coming forward to condemn social prejudices, racism and hate speech. After the global condemnation of the killing of George Floyd and the protests in the US, Facebook has come under criticism due to the way it provided a forum for violent militia groups that were planning to attack protesters. Forex trading company IronFX also condemns such prejudices and is against discrimination.

Will the brands’ boycott hurt Facebook?

With around 750 companies pushing Facebook to address hate, abuse and misinformation on its platform, it is hoped that they will change the way advertising and misinformation is spread through Facebook’s online spaces.
Nick Clegg, Facebook’s vice-president of global affairs and communications, explained that Facebook intended to remove hate speech from its platform, admitting that “many of our critics are angry about the inflammatory rhetoric President Trump has posted on our platform and others, and want us to be more aggressive in removing his speech.”

Clegg reiterated that the only way to hold people accountable was through voting for what they believe in and judging them through the ballot box. He pointed that Facebook and its content moderators were working hard to improve its platform.

Kerri Pollard, senior vice president of the membership platform Patreon said: “Until he softens that, which would affect that entire business internally and externally, we’re not going to feel comfortable returning to the platform.”

Eric Schiffer, chairman and chief executive of the Patriarch Organisation and Reputation Management Consultants, said that this will cost Facebook a lot: “Given Facebook’s colossal scandals and rare repercussions to revenue, the advertisers’ boycott is a body blow that will decimate Facebook’s top line. I expect to see a revenue bleed out of more than $7.5 billion in 2020.”

However, it is hard to see how this will really hurt Facebook, as brands really need Facebook, and the boycott is only a result of the current financial situation, as many companies are cutting their marketing budgets.
While IronFX will continue to advertise on Facebook, this does not mean that it adheres to any discrimination. As a trading forex company that respects its customers, IronFX will continue to provide services while treating all customers equally.

Disclaimer:

This information is not considered as investment advice or an investment recommendation, but instead a marketing communication. IronFX is not responsible for any data or information provided by third parties referenced, or hyperlinked, in this communication.

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