Sustainability, diversity, inclusion, equality – financial services firms have been quick to adopt the tenets of our time. Why have so few joined the Facebook ad boycott?
Facebook and co-founder and CEO Mark Zuckerberg are in the crosshairs for their stubborn treatment of racist and hate speech on the social media platform. The stance has sparked a boycott of the social network by weighty corporate advertisers, as well as of subsidiary Instagram.
More than 1,000 firms including Coca Cola, Unilever, Starbucks, and Verizon are heeding the call, vowing to sever ties with the technology giant. For corporations, the move is as much of a damage control and reputation protection measure as it is an attempt to sway Facebook into taking a stand against hate speech.
Public Avowals
In other words, corporations increasingly understand that if they preach topics like sustainability, ESG (environmental, social, and governance), diversity, and inclusion, they need to back it up with their actions as well. finews.com asked a handful of Swiss financial institutions whether they were joining the boycott and pulling advertising dollars from Facebook.
The majority of the responses took a similar tone: rejecting hate speech and baiting, advocating diversity, not tolerating discrimination, monitoring the situation closely – but continuing to advertise on Facebook and Instagram.
Private Actions
That's the cross-section of responses from insurers Baloise, Helvetia, and Swiss Life as well as banks Raiffeisen, Zuercher Kantonalbank, and Postfinance. Credit Suisse didn't respond, while UBS declined to comment – but appears to have stopped advertising on both social media platforms.
So which finance firms have pulled their Facebook ads? Twint, Vontobel und Zurich are among those following the boycott. Swiss insurer Zurich told finews.com that it «wants to play an active role in creating a trustworthy digital society. Thus, we are suspending paid advertising on platforms which don't actively promote an environment free of hate speech and misinformation.»
Banks Stay On Side
Vontobel said it decided last month to stop paying for Facebook ads, and planned to monitor the social network's future handling of misinformation and hate speech. Five major Canadian banks joined the boycott, but big U.S. banks like J.P. Morgan and Citigroup have stayed put thus far.
The reluctance of other banks to cut ties to the Zuckerberg-controlled media empire is surprising: many banks have acted categorically to stamp out discriminating and misanthropic behavior in the workplace. Facebook, which maintains a political-exemption policy that has been extremely controversial even within its ranks, effectively foments the content among its 2.6 billion users.
Hundreds of Millions For Facebook
Advertising with Facebook is tantamount to condoning its handling of the age of misinformation. What's at stake? A huge amount of money: Facebook generated $71 billion in revenue last year, almost exclusively from advertising. In view of its reliance on ad clients, Facebook rolls out the red carpet for its biggest advertisers, as the «Financial Times» (behind paywall) reported this week.
The juiciest clients are courted with perks like dinner at the home of operating chief Sheryl Sandberg, the «FT» reported – combined with delicately-applied pressure, the offensive has helped Facebook keep advertisers on the side through past scandals.
Those include its role in manipulating U.S. elections, data misappropriation in connection with Cambridge Analytica, and failing to stop a live-stream of a domestic terror attack in New Zealand last year.
New Media Reliance
In Switzerland, Facebook is the second-largest online advertising platform after Google, with combined revenue of more than 1.5 billion Swiss francs ($1.6 billion) annually. Finance firms spend several hundred million francs on Facebook ads alone.
The majority want to keep it that way. The public avowals and private actions illustrate how reliant traditional finance is on newer media platforms like Instagram, Snapchat, or TikTok in order to tap a younger, media-savvy client.
Backfire With Next-Gen?
This translates to a kind of arbitrage: firms know they may suffer a ding to their reputation for keeping company with Facebook. But the promise of high returns thanks to Facebook's data-driven platform is too powerful for them to resist.
The conundrum brings out the most opportunistic side of finance: the Facebook habit reduces a clean image and lofty goals and mission statements to lip service. Trying to have it both ways may backfire badly with precisely the next-gen clients the banks are so desperate to court.
