Digital advertising has had a tough time in recent months. While consumers are worn out with stay-at-home orders, they do not spend money on discretionary things like new shoes, home decor or vacations. As a result, brands began to withdraw from spending on digital ads. Publishers and platforms that depend on advertising spend have felt enormous pressure on their revenue in a time where survival seems to be largely out of control.
The challenges that digital advertisers face really fall into three categories, not entirely related, but also connected in some very important ways.
The first is that digital advertising was already under pressure, first and foremost by privacy advocates who believe that platforms and advertisers should be clearer about the information they collect to tailor advertising experiences to individual users.
Apple, for example, introduced additional antitracking features with the announcement of iOS 1
The second is that the Covid-19 pandemic has made it difficult for advertisers to continue spending money with so much financial uncertainty. Consumers who may have lost their jobs are unlikely to spend money on anything but the essentials.
Finally, it's Facebook. The world's second largest – and arguably most effective – advertising platform is under extraordinary pressure as it tackles the way it handles burning, deceptive and often outright racist content.
The problem is that digital advertising works. Not only that, but it is the most effective form of advertising, since it is the easiest to track. Even a small business can determine exactly which ad a customer clicked on, where it appeared, and what action the customer took on their site. Then, based on what they bought, or more importantly, didn't buy, the business can tailor future ads to re-target the same customer.
If you are a small business, it is extremely effective. If you are a platform like Facebook, it is extra profitable. If you are a consumer, it is a little scary when you think about it. However, most of us try not to think about it.
Which brings us back to Facebook. Right now, consumers are thinking about it as they become more aware of whether the brands they love associate with "hatred." Now, the #stophateforprofit campaign has 400 companies that have pledged not to advertise on Facebook or Instagram during the month of July, with others pledging to stop advertising on social media entirely.
This list, which started with companies such as Patagonia, REI and North Face, now includes major brands and major consumers such as Verizon, Unilever, Ford, Williams-Sonoma, Levi's, Honda, Starbuck's, Coca-Cola and Lego. As a result, Facebook founder and CEO Mark Zuckerberg – whose original response has beenhas faced even more criticism – has agreed to meet the groups that launched the boycott.
That the company and its usually stubborn boss take any steps at all tells you that they really believe the movement may have reached a tipping point. At least, advertisers have become acutely aware that their brand is directly influenced by the platforms they connect with.
I suspect it is still too early to calculate the long-term effect of recent months on digital advertising, but my sense is that it will never be the same. Reaching customers at the expense of appearing to support content that betrays their – or your – values is no longer okay. This is as true for small companies as for giant companies.
Although nothing else, this alone would be an overwhelmingly positive development. Companies are aware that their platform selection sends as strong a message as the ads they run. That change of mind could change everything.