Nearly a third of major advertisers are considering pulling back ad spend on social platforms, according to research from the World Federation of Advertisers (WFA), which comes as U.K. regulators recommend that tech giants be reined in.
The international scrutiny of platforms comes as brands pledge to temporarily stop advertising on Facebook as part of the Stop Hate for Profit campaign, a boycott spurred by the platform’s policies against removing posts that incite violence and misinformation.
In a survey of senior executives at 58 companies that collectively spend $92 billion on global advertising, the WFA found that 5% have already withheld spend from platforms, and another 26% are likely to do the same. Forty-one percent remain undecided, while the remaining 28% are either unlikely to or will not make a change.
“No brand wants to be associated with hate speech, and as the effective funders of the social platform ecosystem, advertisers have a voice that needs to be heard,” said Stephan Loerke, CEO of the WFA. “We are willing to work with the platforms on improvements that will benefit society, advertisers and the platforms themselves. This needs to be addressed fast because hate speech has moved from a reactive media management challenge into a boardroom issue for many companies.”
The U.K.’s Competition and Markets Authority (CMA) is proposing a new “pro-competition regulatory regime” to correct the actions of ad-supported platforms, especially Facebook and Google, which together control around 80% of the country’s digital ad market.
The CMA is proposing to establish a Digital Markets Unit that, in part, would “enforce a code of conduct to ensure that platforms with a position of market power, like Google and Facebook, do not engage in exploitative or exclusionary practices, or practices likely to reduce trust and transparency, and to impose fines if necessary.”
“Through our examination of this market, we have discovered how major online platforms like Google and Facebook operate and how they use digital advertising to fuel their business models. What we have found is concerning—if the market power of these firms goes unchecked, people and businesses will lose out,” said CMA CEO Andrea Coscelli.
The CMA, in partnership with the U.K.’s Information Commissioner’s Office and telecom regulator Ofcom, also announced the formation of the Digital Regulation Cooperation Forum, which will regulate online services and how they use consumer data.
The CMA said that because Europe’s General Data Protection Regulation is still in its infancy, there is concern that big platforms could be interpreting the law in a way that favors their business models, rather than consumer control of their personal data.
“People will carry on handing over more of their personal data than necessary, a lack of competition could mean higher prices for goods and services bought online, and we could all miss out on the benefits of the next innovative digital platform,” Coscelli said.
The calls for advertisers to boycott platforms, specifically Facebook, started in late May following the wave of social protest sparked by the killing of George Floyd at the hands of Minneapolis police.
Advocacy groups emerged online calling for boycotts, claiming Facebook yet again incited violence on its platform after refusing to restrict or otherwise censure President Donald Trump’s “when the looting starts, the shooting starts” post threatening violence against protesters.
According to the WFA’s survey, 13% of respondents are taking actions besides pulling spend from platforms, including making “positive investments” in minority-owned and focused titles.