Mark Zuckerberg
Facebook shares were poised to fall for a second day after more businesses, including Starbucks and Diageo, joined the growing number of brands planning to halt spending on social media, undermining the company’s growth outlook.
The stock had tumbled 8.3% Friday after Unilever, one of the world’s largest advertisers, said it would cease spending on Facebook properties this year, eliminating US$56-billion in market value and shaving the net worth of CEO Mark Zuckerberg by more than $7-billion.
Starbucks and Diageo followed Unilever, Coca-Cola and several other companies in saying they will cut ad spending, part of an exodus aimed at pushing Facebook and other social media platforms to limit hate speech and posts that divide and disinform.
Facebook needs to address this issue quickly and effectively in order to stop advertising exits from potentially spiralling out of control
While a single advertiser can do little to hurt a company that generated $17.7-billion in revenue last quarter, the rising tally creates peer pressure on other brands, and civil rights groups say they expect more corporations to join a boycott.
Starbucks said on Sunday that it would pause spending on all social media platforms while it carries out talks internally, with media partners and civil rights groups “in the effort to stop the spread of hate speech”.
