Zuckerberg 'Troubled' by Calls to Target Internet Ads While Facebook Posts 18.3 Billion Ad Revenue in Q2 2020

While the recent Facebook advertising boycott generated headlines and brand support, it may ultimately have little effect on the bottom line.

As the civil rights coalition behind the "Stop Hate for Profit" boycott movement pledged to continue the fight on Thursday, the vast social network confirmed in a financial report that it had brought in more than 18.3 billion ad revenue in Q2 2020.

While CEO Mark Zuckerberg said he was "troubled" by calls to target ads, Facebook said the year-on-year growth rate of 10 percent is expected to continue.

The Q2 financial report does not cover the full month of July, when the ad boycott took place, but Facebook said the first three weeks of July had been "approximately in-line" with the same growth rate, suggesting the boycott had little financial impact.

Facebook said: "In the first three weeks of July, our year-over-year ad revenue growth rate was approximately in-line with our second quarter 2020 year-over-year ad revenue growth rate of 10%. We expect our full quarter year-over-year ad revenue growth rate for the third quarter of 2020 will be roughly similar to this July performance."

Advertising continues to make up the majority of Facebook revenue, which totaled 18.7 billion during Q2 2020, which is up approximately 11 percent year-on-year.

As reported by Reuters, total revenue growth of 11 percent was technically its lowest ever, however shares in the technology giant soared by roughly seven percent because the figures in the Q2 financial report had exceeded analyst expectations.

Facebook currently has about nine million advertisers, mostly made up of small/medium sized businesses that pay to circulate their ads, Mashable reported. This spending only increased during the virus pandemic, which forced many firms to move online.

Zuckerberg said in an earnings call Thursday it was wrong to assume that Facebook is dependent on large advertisers, not referencing the boycott directly by name.

He said: "While we value every single one of the businesses that use our platforms, the biggest part of our business is serving small businesses.

"Our advertising is one of the most effective tools that small businesses have to find customers, to grow their businesses, and to create jobs.

"That's why I am often troubled by the calls to go after internet advertising, especially during a time of such economic turmoil like we face today with COVID."

The billionaire CEO—fresh from an appearance before Congress as part of an antitrust hearing—said making it more difficult to target ads would burden small businesses.

Zuckerberg said in his opening remarks: "It's true that making it more difficult to target ads would affect the revenue of companies like Facebook."

"But the much bigger cost of such a move would be to reduce the effectiveness of the ads and opportunities for small businesses to grow. This would reduce opportunities for small businesses so much that it would probably be felt at a macroeconomic level. Is that really what policymakers want in the middle of a pandemic and recession?"

Yesterday, the Stop Hate for Profit campaign noted it had been supported by more than 1,100 companies and criticized Zuckerberg's response to their demands.

Its accusation that Facebook was failing to combat hateful content had gained support from many high-profile brands including Ford, Starbucks, Target, Unilever, Lego, Verizon, Coca-Cola and Diageo, which pulled their ad spend throughout July.

Jonathan Greenblatt, CEO of the Anti Defamation League, one of the groups leading the boycott, said yesterday the groups never expected to impact the ad revenue.

"We have said from the beginning that we never expected to make a dent in Facebook's pocket book, but rather to send a message to their conscience. Today just reminds us that they continue to profit from hate," Greenblatt wrote on his Twitter account.

Facebook's chief operating officer Sheryl Sandberg said during the earnings call the site understands the concerns, reiterating previously-used PR talking points.

She said: "It's an interesting situation we find ourselves in because I think oftentimes when companies are boycotted, it's because they don't agree with what the boycotters want. That's not true at all here. We completely agree that we don't want hate on our platforms, and we stand firmly against it. We don't benefit from hate speech. We never have. Users don't want to see it. Advertisers don't want to be associated with it."

While Facebook's financial report seemed rosy, it stressed the COVID-19 pandemic had left it facing an "unprecedented uncertainty in our business outlook."

Even amid the uncertainty, analysis suggested that Zuckerberg's net worth has increased since the beginning of the novel coronavirus was declared a pandemic.

One study cited by CNBC based on the Forbes' Billionaire List suggested Zuckerberg boosted his wealth by 52 percent, growing by more than $83 billion between March 18 and June 4. His current net worth is listed as even higher, around $86.3 billion.

Mark Zuckerberg
Facebook CEO Mark Zuckerberg testifies via video conference during an Antitrust, Commercial and Administrative Law Subcommittee hearing on "Online platforms and market power. Examining the dominance of Amazon, Facebook, Google and Apple" on Capitol Hill on July 29, 2020 in Washington, DC. Graeme Jennings/Pool/Getty