Walt Disney Co., according to sources familiar with the matter, has significantly slashed its advertising budget on Facebook Inc. as it faces a boycott by businesses unhappy with its treatment of hate speech and inflammatory content, the latest setback for the technology giant.
Disney was Facebook's biggest U.S. advertiser for the first six months of this year, devoting roughly $210 million on ads, the Journal reported, citing research firm Pathmatics Inc. Disney spent around $16 million for Hulu ads on Instagram between April 15 and June 30.
It joins hundreds of other firms, including Starbucks Corp., Unilever, Ford Motor Co., Verizon Communication Inc., and a large number of small marketers. Microsoft suspended its advertising on Facebook and Instagram through August. In 2019, Disney was the No. 2 Facebook advertiser in the U.S., behind Home Depot Inc.
Disney doesn't have many movies to promote this summer because the ongoing global health crisis-triggered lockdown led to a delay of movie premieres. However, it is unlikely that spending on ads will normalize when new flicks require promotion unless the social platform rules itself better, a source told the newspaper.
Representatives of the entertainment group did not immediately issue a comment on the situation, while Facebook disclosed in a statement that it knows it has more work to do, the Journal stated. Disney did not immediately respond to a request for comment from Bloomberg.
Disney has also suspended its ad budget on Facebook-owned Instagram for its another streaming platform called Hulu, the report said. In a statement, a Facebook representative said they will "continue to work with civil rights groups... and other experts to develop even more tools, technology, and policies to continue this fight," Reuters reported.
Other units of Disney are also re-evaluating their advertising budget on Facebook. Ads for ABC and Disney-owned cable networks like Freeform have all but disappeared from the site. Facebook has stated that it pours out billions of dollars to keep its social media platforms safe and has barred 250 white-supremacist groups from Instagram and Facebook. It also has announced that artificial intelligence helps it locate almost 90 percent of hate speech before anyone can flag it.
Earlier this month, leaders and organizers of the growing Facebook advertising boycott disclosed that they saw "no commitment to action" after meeting with company Chief Executive, Mark Zuckerberg, Reuters said.
Facebook earns approximately $70 billion in yearly advertising sales, generated from more than 8 million advertisers. It would take a sustained and dedicated boycott from its most prominent advertisers to create a significant impact on the company financially.
