Luxury quietly negotiates Facebook advertising boycott

The #StopHateForProfit boycott is reaching luxury brands. Where will the advertising dollars go?

Luxury brands have been slow to join the Facebook advertising boycott dubbed #StopHateForProfit, which quickly enlisted support from brands including Patagonia, Puma, Eileen Fisher, Levi’s, Lululemon, and Adidas. But some luxury brands are quietly quitting their spending on the platform or negotiating directly with the social platform’s executives.

Ralph Lauren executives decided last week to pause the brand’s Facebook and Instagram advertising as they review the social platform’s values, says a spokesperson. Carolina Herrera’s North American operations paused Facebook spending, according to people familiar with the decision. Neither company appears on the public list of corporate and brand supporters of the boycott, which was launched in mid-June by the NAACP, Anti-Defamation League, Common Sense, Free Press, Color of Change, and Sleeping Giants.

That suggests there is broader support for the boycott than the 800-plus companies that have publicly signed on so far. It also means that an increasing number of fashion brands are out hunting for alternative places to spend their advertising budgets, especially as the social media call-out culture reaches brands who advertise on Facebook and Instagram. Facebook raked in $70 billion in advertising revenues last year.

Luxury quietly negotiates Facebook advertising boycott

“Earlier this month, we committed to a series of actions to address systemic racism, including a review of the media partners we support,” said Ralph Lauren spokesperson Katie Ioanilli via email. “This review is underway and inclusive of all social and media channels and platforms. As part of this, we will reassess our principles for media buying to ensure we appear in channels and on platforms that share our values. As we conduct our audit, we are pausing paid advertising on Facebook.”

Joining the boycott presents a dilemma for luxury brands that have built their direct-to-consumer strategies around the two social media platforms. As it has rocketed into relevancy in recent years, brands like Gucci have worked closely with Facebook tools to trace consumption across the internet. The Kering-owned brand referred to Kering parent for comment. Paul Michon, a Kering spokesman, said in an email that Kering decided not to join the boycott after speaking directly with Facebook executives.

“Kering is very committed to fighting racism and discrimination of any form, and we are closely monitoring what policies social media companies implement to combat hateful content and discriminatory narratives on their platforms,” Michon said. “We have voiced our concerns and demands directly to Facebook’s executive leadership, and we expect the enactment of tangible solutions.”

The marketing dilemma creates an opportunity for other platforms as advertisers weigh the likely returns from pitching on  YouTube,  Google,  Snapchat, and other options. Marketing executives at Ralph Lauren have been doubtful they can replace the return-on-investment they have found on Facebook at large tech rivals, according to people familiar with those discussions.

RewardStyle, a Texas-based influencer marketing company, has been reaching out to brands with a new pitch, arguing they’re better off marketing on a platform that isn’t crammed full with angst-ridden commentary about politics and justice.

“It’s been an information campaign (saying) you need a partner who is safe and scaled, says RewardStyle founder and chief executive Amber Venz Box. “As socio-political content rises on social platforms, consumers are shifting their shopping to neutral ground.” Among her global luxury business partners and clients, she lists Net-a-Porter, Farfetch, Moda Operandi, and Alibaba, as well as Gucci, Burberry, and Sephora.

Recognizing that fashion CEOs are under severe pressure for financial results, Venz Box is basing her company’s pitch around the conversation rates on its consumer shopping app, LikeToKnowIt, which she says saw sales of $500 million in the past six months — roughly equal to its revenue for all of 2019. She says the app, which sells via RewardStyle influencers, sees conversion rates of 3.9 percent, compared with an average of 1.1 percent across social media platforms such as Facebook, Instagram, and YouTube.

Sleeping Giants’s highly successful guerrilla campaign to stop companies from advertising Breitbart, and later Fox News show The O’Reilly Factor, suggests the potential potency of a Facebook boycott, particularly as this action’s partners include the NAACP, Anti-Defamation League, Common Sense, Free Press and Color of Change. Sleeping Giants began in 2016 by politely heckling Breitbart advertisers on Twitter, shaming them for advertising and rewarding them when they agreed to quit the site. Other Twitter users quickly joined in.

That system is already playing out with #StopHateForProfit as consumers tag Facebook advertisers on Twitter, asking them to halt their spending. Not all brands are complying.

When Twitter user @Jennifeg on Thursday asked shoe brand Toms to halt its Facebook ad spending after she saw one of its ads on her feed, the  Toms Twitter account replied, “At this time, digital advertising is essential to our business. It allows us to support our employees, and to continue funding the important work of our Giving Partners.” Other Twitter users quickly pledged in the comments to stop buying Toms shoes and sunglasses.

The Facebook showdown has drawn the attention of founder Mark Zuckerberg and his executive team, who have met with advertisers over the past week, according to one luxury brand executive who participated in one of the meetings. Facebook representatives did not respond to a request for comment.

Many fashion brands, particularly direct-to-consumer companies, have built their marketing strategies around Facebook and Instagram and Facebook, in turn, has created tools that are helpful to track consumers and measure advertising returns.

On its Facebook for Business site, the social platform has published a 2019 case study on its partnership with Gucci that pointedly pitches the success of the Kering-owned brand in using tools such as Facebook Attribution that track consumer behavior across devices. “Given its strong focus on return on ad spend,” the casebook study says, “Gucci wanted a measurement solution that could account for conversion journeys across devices and also measure ad influence beyond last-click.”

The boycott lasts for July.