Facebook Boycott: Big Opportunity For High-Risk Merchants? – Pt. 1
Jul 29, 2020
Unless you’ve been living under a rock, you know that there is a Facebook boycott. No, not from individual users. From big brands and corporations that advertise on the platform.
The global pandemic has forced the number of Facebook users into record territory. Today the platform has over 2.6 billion monthly active users. Thus, you would think that advertisers would be licking their lips at the chance to target such a vast audience. However, many prominent companies have staged a Facebook ad boycott; holding back their advertising dollars. This is due to recent events and reemerging concerns over Facebook’s performance in policing its own platform.
Some of the biggest brand names in the world such as Starbucks, Coca-Cola, and Unilever have joined the initiative. But with so many of the world’s biggest Facebook advertisers pressing pause on their ad budgets, what does it mean for high-risk merchants?
This two-part series will walk you through what the Facebook boycott is about. As well as how the role Facebook plays in your high-risk vertical may change. It’ll also cover what the current status of Facebook advertising is for high-risk online merchants. Before moving on to the importance of diversifying your advertising strategy.
What is the Facebook boycott?
Facebook has struggled in the past with events such as the Cambridge Analytica privacy scandal. But this boycott centers on new issues. More specifically, the issue of Facebook failing to tackle the spread of hate and misinformation on its platform.
Other platforms such as Twitter, have recently started tackling the spread of false information. Including from sources such as Donald Trump. They’ve also committed to a complete political advertising ban. However, Facebook has taken a different approach. They have steered clear of interfering with posts and some adverts made on their platforms. For instance, many adverts from extremist right-wing groups are still circulating to this day. This is despite the fact they are banned according to their own guidelines.
This approach to so-called “hate speech” and misinformation spawned the The “Stop Profit for Hate campaign”. It was first launched on June 17. It’s backed by civil rights groups, and so far over 1,000 prominent brands have taken part. They have all agreed to pause their ad spend until real changes happen. Their action is a response to the “repeated failure to meaningfully address the vast proliferation of hate on its platforms.”
Why does it matter to Facebook?
The idea of the campaign is to put pressure on Facebook to make significant changes to the way it operates its platform. They know holding back advertising dollars is the way to achieve that change. In 2007, advertising accounted for $764 million in revenue for Facebook. Last year that figure was $69.65 billion. Worse, despite recent efforts to diversify, 98.5% of Facebook’s revenue is derived from advertising. If the movement gains serious momentum, Facebook could see the bottom line impacts as soon as Q3 2020.
Facebook knows it has a problem. They’re aware they shouldn’t have 98.5% of their eggs in one basket. This is why they’ve been recently expanding their business operations to diversify their income. They’ve acquired WhatsApp, Instagram, and now they have entered the payments space with WhatsApp Pay in India and Brazil. That’s not to mention their attempts to launch a new cryptocurrency named Libra. But it has stalled after many major backers pulled out shortly after its announcement.
As Facebook operations continue to proliferate, what does it mean for high-risk merchants? For instance, what if you’re in the dating niche? How much longer before Facebook bans your adverts for clashing with their new Facebook Dating service?
But this is pressure from high-spending partners to get even stricter with their advertising polices. Also, couple that with their desire to lessen their dependency on ad revenue. It could be a ticking time bomb for high-risk merchants reliant on Facebook ads to drive revenues. On the other hand, it could present an opportunity.
How is the Facebook boycott affecting high-risk merchants?
Facebook advertising is already a tough environment. Even tougher if you’re in a high-risk vertical such as dating, online education, supplements, or digital info products. Any kind of adult content (symbolic or otherwise) in ads is a big no-no. The advertising of dietary supplements is very tricky, with before and after pictures banned, for example. Merchants selling info products (particularly online business coaches or biz-ops) have a hard time getting Facebook ads approved. Since, many operators in the same making money online niche have caused problems for Facebook.
Prescription drugs, supplements, alcohol, tobacco, cryptocurrency, weapons, gambling, and credit and loans. These are a few examples of tightly-restricted verticals on the Facebook advertising platform.
But the boycott may help to relax those policies. You see, it’s not actually the big household name brands that provide the bulk of the advertising revenue for Facebook. It’s small and medium-sized businesses. Given that the movement has spread far beyond the headline names. The boycott may make Facebook a little more lenient with their policies so as not to feel the pinch on revenues. Ads that were not compliant a few months ago may make it through the gate now that Facebook’s ad dollars are drying up from big companies.
Therefore, if you’ve had a tough time trying to advertise on Facebook, now might be the moment to try again. By being strategic with your advertising, you can beat competitors who gave up on Facebook ads years ago.
Are you aware of the compliance rules governing Facebook ads? If you get you ads wrong, you could be banned from advertising on Facebook altogether. Make sure to read our two-part guide to staying on the right side of their guidelines!
Now could be the time to restart those old Facebook ad campaigns
For instance, let you say you operate a survivalist or prepper website. Advertising your camping knifes are out of the question. However, can you get creative with your products or advertising? What about selling an e-book that informs the reader about the best camping gear, boots, or tents? Or what about if you’re a credit-repair merchant? Could you write an ad that omits inflammatory and sensational keywords?
Collecting email addresses from customers of these types of products might help sell other products to them at a later date. An email list of customers for a particular product niche is a very valuable asset!
There’s no time like the present to revisit Facebook ads, if you’re a high-risk merchant. Facebook hasn’t yet publicly stated any changes to its strict advertising guidelines. But with less ad spend across the board, there may be less competition for your placements.
Don’t forget Facebook’s ads system is based on an auction system. The less bidders there are, the cheaper you can acquire new customers. Also, with Facebook compliance typically being very restrictive, they may let out given there are less advertisers.
Some in high-risk verticals will see the boycott movement as the beginning of the end for their industry on Facebook. In some instances, they may even be right. But while they are focusing their efforts elsewhere, you can gain a competitive edge by taking their spot at the table.
For that reason, it may be worth increasing ad budgets during this boycott period. To see what effect it has on your bottom line. You may begin to notice you receive higher returns on your investment.
Don’t forget the importance of the landing page
Where many Facebook marketers for high-risk merchants have gone wrong is at the landing page. Facebook no longer scans the content of the ad, but where you’re sending their users too. In fact, 50% of the ad review process is dedicated to your landing page, rather than the advert itself. Your landing page is also subject to the same rules and stipulations.
Therefore, just because you’re not on the platform itself, it doesn’t mean you can revert to more sensational marketing language. Avoid any language that could be construed as misleading. By the same token, avoid providing false information or overselling your products and services.
Not only is this a bad practice from a Facebook standpoint, but it will also result in high refund rates. And a slew of damaging chargebacks. You don’t want your little experiment in beefing up your Facebook ad spend to result in damaging to your ability to process payments. But by staying on brand throughout your ads and landing pages you may be able to increase revenues. All without running into ad compliance issues associated with Facebook advertising. At a time when even local and small online outfits are pausing their Facebook ad spend, you could reap some hefty rewards by experimenting.
The Facebook boycott may signal the time to start experimenting with your ads
The dust is yet to settle on what the Facebook boycott means for high-risk merchants. But it certainly presents a potential opportunity. Many household brands and local businesses are shunning Facebook. You could use the reduced competition to your advantage. Facebook haven’t changed their strict compliance policies. But you could get smarter and experiment with the way you craft your adverts. Benefitting from lower customer acquisition costs in the process.
In the second part of this two-part series, we will delve into how to get the most out of your Facebook ads. We’ll also look at how to future-proof your marketing, given how turbulent Facebook is as an advertising channel at the moment. So stick around!
In the interim, get a head start on your payment processing as well as your online advertising strategy. Speak to us at DirectPayNet. We work will all types of high-risk industries. Including adult entrainment, supplements, and online coaches to name a few.