— This is the script of CNBC's news report for China's CCTV on June 29, 2020, Monday.
So far, at least 160 companies have suspended advertising on social media. The organizers of the boycott, #Stop Hate for Profit, told Reuters on Saturday that they would further call on major European companies to join the boycott.
Most of the companies that have recently said they would join the boycott or suspend social media advertising have been large, industry-leading companies. Their actions will be exemplary and motivating and may have a snowball effect. This weekend, many companies will be rethinking their social media advertising strategies, by Monday, we're likely to hear more companies announce similar changes.
Founder & CEO of BKCM LLC
I think the water is over the level at this point. It's broken. I think Monday morning you're gonna see a lot more people pull out of this advertising on social media. Facebook in particular.
The boycott has affected major social media companies, including Facebook, twitter and alphabet, which owns the social media platform YouTube. We saw the stock prices of all of these companies fall sharply in Friday's trading, with Facebook the most affected.
More than 98 percent of Facebook's $69.7 billion in revenue last year came from advertising, according to public financial reports. It's worth noting, though, that Facebook has eight million advertisers, most of them small businesses. Under intense pressure from advertisers, Facebook CEO Mark Zuckerberg on Friday said he would issue a new policy banning hate speech in ads. However, opponents are calling for broader action to extend censorship beyond advertising and more user protection measures to improve the platform environment.
CNBC received a 1600-word note written by Facebook's vice president in charge of global business solutions to advertisers. In the memo, Facebook said boycotts are not the way we move forward together and that it is acting in principle and will not make policy changes because of revenue pressures. However, in the face of the epidemic, protests and demonstrations in the United States, and the approaching general election, Facebook's principles for content review are being questioned. At the same time, social media is coming under increasing regulatory pressure.
In June, the European Commission announced new guidelines for technology companies, including Facebook, asking them to submit monthly reports on how they deal with the mis-information on COVID-19. Zuckerberg also said Facebook had made progress in removing hate messages and speech but admitted that more regulation is needed.
Facebook has managed to bounce back from the huge backlash it faced after the Cambridge Analytica scandal, industry insiders think things are different this time, the hard time has not come. We will keep an eye on this issue.