Disney pulls back on Facebook spending; analysts say company can weather storm

(Photo: Pixabay/Graphic: The Desk)

The Walt Disney Company drastically reduced spending on Facebook during an advertiser boycott of the social media company, according to a report.

The Wall Street Journal reported on Saturday that Disney paused ad spending on Facebook in solidarity with civil rights groups who have led a spending boycott over what they say are Facebook’s failures to adequately police hateful user-generated content.

The Anti-Defamation League and the NAACP are among the activist groups leading the boycott. Some of Facebook’s leading advertisers, including Adidas, Coca-Cola, CVS, Denny’s, Microsoft and Starbucks, have responded to the boycott by pledging to pull or pause ad spending.

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Disney spent around $210 million on Facebook in the first six months of 2020, according to data from a research firm quoted by the Journal. Disney’s social media ad budget included commercials for its streaming services Hulu and Disney Plus, with ads running on Facebook and sister services Instagram and WhatsApp.

Disney also pulled ads for its broadcast channel ABC and cable network Freeform, an unnamed source told the Journal. The source said those ads are unlikely to return in the future unless Facebook does a better job policing hateful and defamatory content on its platform.

Earlier this month, top Facebook executives met with key stakeholders involved in the boycott to discuss how the social media company could better enforce its anti-hate policies. Facebook executives agreed to a demand to hire a new employee to fill a civil rights position, but other demands were blocked and the Facebook meeting was received by activists as a public relations meeting at best, according to the New York Times.

While some companies have reconfigured their ad budgets based on the boycott, others have reduced spending due to the ongoing coronavirus health pandemic. That crisis has led to a shutdown of brick-and-mortar businesses, with those companies reconsidering how much they spend on traditional and social media advertising.

Others still have resisted efforts to join the boycott and have largely kept their commercial spending on track. Procter & Gamble, AT&T WarnerMedia and SiriusXM Radio have continued to spend millions of dollars taking out Facebook ads, according to information published by National Public Radio earlier this month.

Analysts say Facebook is in a good position to weather a short-term boycott: The companies account for around $1 billion in advertisement revenue for the social media company. Facebook earned $70 billion in advertisement revenue in 2019.