Probably not panicking yet.
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Over the past week, a number of companies have announced plans to pull back advertising from Facebook temporarily in response to the company’s lax policy toward hate speech. Facebook’s stock price has fallen — but is this an existential threat or more of a bump in the road? Kara Swisher and Scott Galloway discuss the issue on the latest episode of the Pivot podcast.

Kara Swisher: So, after escalating pressure from companies — and from Kara Swisher and Scott Galloway — Facebook says it will start labeling political speech that violates its rules on the platform. The move came late last week after Unilever said it would be holding ads on Facebook for at least the rest of the year because of hate speech. In a livestream aired last Friday, Zuckerberg said he was “optimistic that we can make progress on public health and racial justice while maintaining our democratic traditions around free expression and voting.” He then denied that the change in policy has anything to do with an ad boycott or revenue, which is a lie, but Facebook shares fell about 8 percent.

Coca-Cola is going to remove social-media advertising — it didn’t join the boycott, but sort of did. And there are other companies considering it. Starbucks is doing the same thing as Coke, pulling social media but not signing onto this specific thing — which is the Stop Hate for Profit campaign that’s been going on, organized by a bunch of different people, like ADL, Color of Change, the NAACP, Sleeping Giants, and Common Sense Media. There’s a coalition, and they’re taking the whole thing global. So, Scott, it looks like there’s some movement here. Maybe not, but it is having some effect. And I think it’s a good sign.

Pivot

Twice weekly, Scott Galloway and Kara Swisher host Pivot, a New York Magazine podcast about business, technology, and politics.

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Scott Galloway: Well, I was doing some research this morning and Nick Clegg, Facebook’s vice president of global affairs and communications, conceded Sunday on CNN that “people want to put pressure on Facebook to do more. That’s why we made those additional announcements on Friday. That’s why we’ll continue to redouble our efforts because, you know, we have a zero tolerance approach to hate speech.” Yeah, they have zero tolerance. That’s like saying I have zero tolerance for Zacapa and Chipotle. I run on rum and burrito bowls. That is just so ridiculous. And you know what, Kara?

Swisher: What?

Galloway:I hate to say it, I think this in the long run is probably bad, because Facebook is going to do things that Twitter has already done. They said, “Okay, we’re going to label political speech.” They’re not saying they’re going to stop taking political ads. So, they’re going to move to — not even where Twitter has moved. They’ll declare victory, their advertisers will all pat themselves on the back — the ones that were accounted for, I think it’s like 0.01 of their revenue. And we’ll be under the impression that Facebook is less of a menace.

Swisher: I agree with you. I think it’s better than nothing, and these are significant advertisers. But I talked to a relatively small advertiser and they said, “I have to spend more on Facebook.” It’s the only game in town. It really is. It’s like Google and search. I do think that that dynamic is in their favor, but at the same time, they’re being tarnished. And I think we have to continue to keep up pressure on them to do the right thing. I mean, of course, they’ll do the smallest amount they want and wrap themselves in the First Amendment like they tend to do. But what I think is going to happen is that they’re going to be pressured by employees, they’re going to be pressured from the government next, and so it will continue. It will be sort of a drumbeat. I don’t think this is going away for them by any stretch.

Galloway: I hope not. I hope you’re right. But remember in The Terminator

Swisher: Remember? It’s my favorite movie, but go ahead.

Galloway: In the second one, the Terminator has some sort of liquid substance, where if he chops off an arm, it just sort of reanimates and reforms, very elegantly.

Swisher: It’s the metal.

Galloway: The tensile base or the tensile strength … Facebook’s advertising base is, arguably, one of the most robust business ecosystems in the world. And the tools are so powerful, and so many people are on it, that even if they were to lose their 50 biggest advertisers, as long as they just throw some kind of sort of symbolic gestures at the problem, that arm is going to regrow really, really fast. The opportunity to swoop in and target those people for other brands and small businesses who really depend on Facebook — it’ll just regrow that arm really, really quickly.

Swisher: So you have to put them in a very hot vat of metal.

Galloway: There you go.

Swisher: The question is, do you think there’s nothing to be done about these things? I don’t agree with you.

Galloway: No, no, no. Come on. I absolutely think it’s going to be done. I think we need to break them up and I think we need to file criminal charges against senior execs. I’m saying let’s do something that’s effective.

Swisher: Really? I don’t know about criminal charges. I do think civil charges and regulatory things.

Galloway: Until a senior executive at one of these firms that have levied extraordinary damage, have denied doing harm to our youth, have done all sorts of damage to democracy — until one of them, and I think this is going to happen, is arrested, and I think it’s going to happen on foreign soil — I don’t think any of them give a good goddamn. I think the markets have taught them: Delay and obfuscate, hire super-charming, high EQ people like Nick Clegg. He strikes me as a very impressive, likable person.

Swisher: He’s very pleasant.

Galloway: The market will react and respond and just keep on going. It’s easy to make a sociopath when you keep rewarding people for sociopathic behavior. I salute Unilever. It was a leadership position. But you know what? Unilever spends $11 million on Facebook a year. They do $16 billion a quarter. It was like, “Oh, wow, this is a big deal.” Not really.

Swisher: I’m going with the glass-half-full thing. This is the beginning of it. I think if you continue to keep the pressure on — it’s not a good look for Facebook. You’re essentially a cigarette company. I put up something that said, “Let’s not give kudos to someone who did the thing they were supposed to do in the first place.” And I got lots of retweets — thousands. I don’t pay attention to everything on Twitter, but I do notice what people react to.

Galloway: No, I think you pay attention to everything on Twitter.

Swisher: Oh, stop it.

Galloway: I want to bring some nuance to the conversation. This was a leadership move by Unilever. It was bold. . I love Unilever and Procter and Gamble — I’ve worked with both of them. The people who run the companies are these really thoughtful kinds of civic-minded people. Congratulations to Unilever — I mean that. But you know who’s going to register the impact of their actions? You know who registers the desired impact of these very, what I’ll call, honorable, thoughtful, heart-in-the-right-place brands trying to do the right thing? You know who gets really hurt by this?

Swisher: Who?

Galloway: Twitter. Because if you’ll notice, every brand and every company that’s decided we’re going to remove our advertising from hate platforms is lumping Twitter into it, even though Twitter was the one to ban all political advertising. The moves that Facebook has said they’re going to make in response to this — they aren’t even what Twitter has already done. And by the way, Twitter can’t absorb these body blows. Twitter is not the Terminator.

Swisher: Yes. And therefore, they need subscriptions, like you say.

Galloway: This is the thing. The real damage to the business, the real gut punch is going to be registered by Twitter and potentially Snap, who are being lumped into all this.

Swisher: They should not be lumped.

Galloway: Well, I think the way people look at Twitter, unfortunately, is that it’s all the hate with none of the scale. If Twitter doesn’t figure out a way to disarticulate themselves from other social-media platforms, as Tim Cook did from other big tech companies, they’re going to get all the boycotts. It’s not a monopoly. It’s not part of the duopoly. The company that really got hurt by Unilever in this campaign is Twitter. It’s not Facebook.

Pivot is produced by Rebecca Sananes. Erica Anderson is the executive producer. 

This transcript has been edited for length and clarity. 

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