Facebook advertisers boycott will make the CPM drop? (3)

Does Facebook advertisers boycott will make the CPM drop?
Well, think again...


In 2019, advertising revenue accounted for 98.5% of Facebook's total revenue. If you take the advertisements out of it, Facebook will be a company with just over $ 1 billion in annual revenue. Not an internet giant, barely a bug on the web.

In the most extreme scenario, with a global boycott of advertisers on Facebook, the company will collapse within weeks. But this is a very unlikely scenario... First, because Facebook advertising is very decentralized. Past data from the "Pathmatics" research firm, 100 of Facebook's biggest advertisers account for only $4.2 billion of its revenue, which is only about 6% of its advertising revenue!

That is, even if all major advertisers boycott Facebook for a year, the effect on its bottom line would be smaller than the fine it paid in the US following the Cambridge Analytica affair.

What do you think will happen?

Originally Posted by kinan

Does Facebook advertisers boycott will make the CPM drop?
Well, think again...


In 2019, advertising revenue accounted for 98.5% of Facebook's total revenue. If you take the advertisements out of it, Facebook will be a company with just over $ 1 billion in annual revenue. Not an internet giant, barely a bug on the web.

In the most extreme scenario, with a global boycott of advertisers on Facebook, the company will collapse within weeks. But this is a very unlikely scenario... First, because Facebook advertising is very decentralized. Past data from the "Pathmatics" research firm, 100 of Facebook's biggest advertisers account for only $4.2 billion of its revenue, which is only about 6% of its advertising revenue!

That is, even if all major advertisers boycott Facebook for a year, the effect on its bottom line would be smaller than the fine it paid in the US following the Cambridge Analytica affair.

What do you think will happen?

Yup, the potential loss is not big, even if all the biggest advertisers pull their campaigns, but it's still a loss and that's something that will create a lot pf pressure on the management and Zuck himself. A decrease in revenue is something "horrible" in this world of constant pressure for growth. So stock prices would likely start to fall too, which could create a snowball effect and do way more damage.

For now, the big spenders only plan to halt advertising for a month, if I'm not wrong, so no biggie for FBs bottom-line as of yet. But it's definitely gonna create a lot of pressure and they will have to start doing something about it. Which is a good thing imo, they need to do something about the moderation. With the global impact they have, they need to come up with some systems to filter the crap, fake news, hatespeech etc...

And maybe, while addressing these issues, they will also improve ad campaign moderation and get rid of some false bans... or who knows, maybe they will be even more strict and make our lives even more complicated.

Personally, I'm very curious about the outcome of this.