Facebook said in its second quarter 2020 earnings on Thursday it's been impacted by ad boycotts from major advertisers. But its third-quarter outlook suggests there won't be much of a ding to its ad revenue growth.
Facebook said its year-over-year ad revenue growth rate in the first three weeks of July were in-line with its second-quarter year-over-year ad revenue growth rate of 10%, and that its ad revenue growth rate for the third quarter will be "roughly similar to this July performance."
Major advertisers announced various degrees of pauses to their social media advertising budgets in June, after a campaign called "#StopHateForProfit" called on advertisers to boycott Facebook for the month of July.
Those organizations wanted to pressure Facebook into taking more stringent steps to stop the spread of hate speech and misinformation on its platform.
Facebook listed an "impact from certain advertisers pausing spend on our platforms related to the current boycott" as a factor contributing to its third-quarter outlook, and said macroeconomic uncertainty, a normalization in a recent surge in community engagement and potential regulation will also impact its third quarter ad revenue.
Wedbush analysts in a research note this week said they expected "minimal financial impact from brand boycotts." They wrote that given the duration of announced boycotts, it expects roughly $100 million of "near term brand revenue is at risk, representing less than 1% of [year-over-year] growth in Q3."
"#StopHateForProfit" organizers said in an emailed statement Thursday that the boycott encouraged Facebook to take a number of "concessions," but that Facebook CEO Mark Zuckerberg "has not yet approached the type of meaningful action that we want to see."
"We called for a Facebook ad pause for the month of July as the mobilization for the Stop Hate for Profit movement. Many companies, frustrated by Facebook's unwillingness to address their concerns, have already said they are not ready to return to Facebook's platforms," they wrote. "We applaud them for that decision. We see this movement growing in Europe and in other areas. And we have explicit commitments from many advertisers to participate in future pauses and new actions if Facebook continues to ignore their demands for change."