Unilever and Verizon Drop Facebook; Unilever Drops Twitter Too; Social Stocks Plummet

Unilever announced today that it is ceasing advertising on Facebook and Twitter through at least the remainder of 2020, saying that the social media platforms feature too much divisive content and unmoderated hate speech.

“Based on the current polarization and the election that we are having in the U.S., there needs to be much more enforcement in the area of hate speech,” Luis Di Como, Unilever’s executive vice president of global media, told the Wall Street Journal.

This comes a day after Verizon also dropped Facebook ads, saying that the platform does not have enough on a handle at moderating hateful or misleading content. Both Unilever and Verizon's dropping of Facebook will include Instagram ads.

While these are relative drops in the bucket for Facebook -- Unilever spends $42.3 million annually on Facebook ads according to a research firm cited by WSJ, which sounds like a lot but Facebook had nearly $71 billion in revenue in 2019 -- it's impacting the stock. At press time, Facebook stock is down 7.6 percent and Twitter is down 7.5 percent today. For comparison, NASDAQ and S&P are both down around 2 percent on the day.

Facebook has had a pretty abrupt about face in policy. This was in the WSJ yesterday:

Today, Facebook announced that they would start labeling posts that violate their rules but are deemed "newsworthy". Per Axios:

This will not apply to violent content, which will still be taken down. It sure seems like they responded to their business interests here.

It'll be interesting to monitor if there are more blue chip brands taking their money out of social media platforms as the election season heats up.