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Facebook boycott has negative impact on marketing effectiveness for participating brands

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Researchers at Saïd Business School, University of Oxford have estimated the impact of the Facebook advertising boycott on participating brands.

They found an immediate negative impact, which will be felt most strongly by retail – a sector already under pressure from the pandemic.

If retailers pull their advertising budget from Facebook and move it into other channels in their typical media mixes they can expect the overall ability of their ad campaigns to influence customers’ purchase intentions or motivations to drop by an average of 8% and likelihood to consider their brand to drop by a substantial 25%.

Auto manufacturers could expect their audience’s purchase motivations to drop by 13% and the perceived saliency of their brand to drop by 6%.

According to the researchers, the reasons for this impact lie in the way Facebook interacts with other media channels. Associate Professor Jason Bell explains: ‘By removing Facebook from their media mixes, brands hurt their overall advertising effectiveness in the remaining channels. This is because Facebook ads seem to indirectly help make advertising in many other channels more effective. Facebook is like salt in cooking – where salt improves the flavour of other ingredients, Facebook advertising can help make other channels in a campaign more effective. For example, you might see a TV or YouTube ad that has an impression on you, but you aren’t in a position to act on it. Later a Facebook or Instagram ad might reawaken your interest, but now in a context with lower barriers to responding.’

 

The study was conducted by Jason Bell, Associate Professor of Marketing, Andrew Stephen, Associate Dean of Research and L’Oréal Professor of Marketing and Felipe Thomaz, Associate Professor of Marketing, using a large dataset on advertising campaigns across industries provided by data and insights company Kantar.

 

We believe it is right that many advertisers around the world have taken actions to draw attention to the propagation of unsafe and unacceptable content, such as hate speech, on social media platforms.

Andrew Stephen

Associate Dean of Research and L’Oréal Professor of Marketing

To reach their conclusions, the researchers estimated the impacts on ad effectiveness of both the individual components of ad campaigns (channels like Facebook, TV, radio, magazines) and the complex interactions between them. Using their statistical models, they then estimated the impact on ad effectiveness of setting Facebook to zero while assuming that advertising spend is unchanged and with the zeroed-out Facebook spending reallocated proportionally across other media channels. They produced percentage figures by estimating the percent difference between campaigns with Facebook, and those same campaigns if they had reduced Facebook spending to zero and reallocated to other advertising media.

‘Regardless of the rationale behind the boycott,’ Associate Professor Felipe Thomaz adds, ‘It is important to recognize that, contrary to some initial claims, brands will in fact bear a significant cost in the process. And on average, It will be more difficult and more expensive to be noticed, considered, and purchased.’

Professor Andrew Stephen added: ‘We believe it is right that many advertisers around the world have taken actions to draw attention to the propagation of unsafe and unacceptable content, such as hate speech, on social media platforms. And we are pleased that companies such as Facebook and Twitter have taken and continue to take action to address these problems. From a purely commercial perspective, however, these findings suggest that pulling ads from Facebook will likely prove costly for brands. We feel this is something marketing executives should be aware of and factor in, especially during extremely difficult economic conditions.’