One of the world’s largest tech companies and social media networks Facebook is facing one of its toughest periods in the stock market. It all started with a $60 billion plummet in market value that happened last Monday and continued on for two days. The good news is that the company’s stock later on rose by 1.2 percent, much to the relief of its many stockholders.
What caused this major change? Well, it’s safe to say that it all started when advertisers started defecting from the tech giant in droves after citing the proliferation of racist rhetoric that has been allowed to continue unchecked on the platform. These advertisers include Starbucks which happens to have suspended all social media marketing campaigns since then.
In reaction to this, Facebook decided to make small changes to its advertising campaign. But, even this doesn’t seem to have helped as Facebook continues to lose advertisers by the day due to what many are referring to as “hate speech.”
After the death of George Floyd, a group called Stop Hate for Profit was founded as a coalition of different U.S. civil rights groups in order to help fight racial discrimination in the US.
According to the coalition, Facebook rakes in about $70 billion per year from advertisers therefore they should be more responsible and try to moderate the speech of U.S. President Donald Trump. This comes after Facebook CEO Mark Zuckerberg decided to not limit Trump’s speech or his posts.
Companies like Starbucks responded to this by halting all social media marketing campaigns effective immediately. Currently, Starbucks is discussing a viable way forward with several civil rights organizations and media partners.
Ford followed suit by halting all social media marketing campaigns for the next month due to the prevalence of content that apparently promoted racial injustice and hate speech.
Other companies that have since pulled advertising dollars from Facebook include Verizon, Clorox, Lululemon, HP, Coca-Cola, Adidas, Unilever, and Pepsi. After this happened, Facebook experienced an 8.3% hit in its stock overall within one day.
As more companies came to the party and Facebook lost more revenue, so did the tech giant’s stock begin to plummet.
Facebook eventually caved to the mob by introducing changes to their advertising policy, which was a sharp turn from their earlier statement that they wouldn’t be interfering in what people post due to being a private company and all.
However, Zuckerberg eventually caved in and decided to introduce policies that would further tighten content restrictions on the platform, especially when it comes to advertisers and the type of language that they use. These wholesale restrictions include public figures, private companies, and regular users alike and are aimed at reducing harmful posts on the platform.
Facebook announced that it would place a wholesale ban on labeled voting ads that contain inaccurate information as well as any hateful language. One of the first posts to be penalized was a video by the GOP which was taken down due to having hateful and harmful content.
Overall, Facebook’s new policy is aimed at reducing hate speech, misinformation, and inflammatory posts.
