This is an interesting move by Unilever. I have to say I’m proud of them. I think of them as a conservative company and this impressed me.
Unilever, who spends over $2.5B per year on digital marketing, is sick of their trusted brands showing up next to fake news or even worse, hate news, content through the Google and Facebook platforms.
Taking $2B straight off of Google and Facebook’s bottom lines would be a painful blow for the GOOGL and FB tickers.
Google and Facebook make up 80-90% of the digital advertising spend due to their massive scale, reach, and incredible targeting capabilities. They charge a premium for advertising due to the high quality of the traffic they can drive.
The advertising revenues have resulted in a combined $1.25 trillion, yes, trillion, in shareholder value.
However, the past few years, crap content such as fake news sites, click bait, tabloid “news from around the web” articles, and hate speech, they’ve really fallen from grace.
And because these crap content producers spend so much money, Google and Facebook didn’t put much effort into remedying the situation because it would hurt revenues. And now we have Trump, whether you like him or not, 70% not.
Here’s the story by CNN: http://money.cnn.com/2018/02/12/media/unilever-advertising-facebook-google-swamp/index.html
I am pretty sure Google and Facebook were already taking this swamp of fake news seriously, but I applaud Unilever helping to nudge them along. Hopefully more brands will “techlash” against Google and Facebook until they really clean up their act.
However, if you are an investor in Google or Facebook, this will hurt the value of your stock at least for the next few years. I imagine they’d have to pull billions of dollars worth of ads to really clean up the swamp. And that’ll be a painful blow to both revenue and earnings.