PepsiCo Vice Chairman and CFO Hugh Johnston said his his company is suspending its social media ad buys. However, the move isn't part of a broader Facebook boycott, an organized effort by hundreds of companies to withhold ad spending to pressure Facebook to crack down on hate speech and misinformation.
"We have not joined the [Facebook] boycott, but we have announced we're suspending social media advertising for a period of time," Johnston, a former Twitter board member, told Yahoo Finance Monday. "I believe [our suspension] ends in July."
- The boycott gained traction last month amid pressure from civil rights organizations, including the National Association for the Advancement of Colored People and the Anti-Defamation League, the New York Times reported.
In a Fox Business report last month, "people close to the matter" confirmed PepsiCo is "quietly" joining the boycott. In his Yahoo interview, Johnston did not specify from which social media platforms PepsiCo would be suspending advertisements.
Many of the boycott participants are small businesses, which comprise the bulk of Facebook’s eight million advertisers, the Times reported. But recently, several large companies have joined in, including Adidas, Dunkin,' Unilever, Coca-Cola, Verizon and Starbucks, sister publication Marketing Dive reported.
"What we're dealing with simply is this: the business we're in really [supplies] people with little bits of joy in their day. Just smiles. That's the way we tend to think about it," Johnston said. "We don't want to take the products that bring smiles to people's faces and have them positioned right against some of the challenging things on social media right now."
Johnston added PepsiCo, as a company, is "obviously in favor of free speech," but some things on social media "are really inconsistent with the way we're looking to position our brand."
"As they do a better job with managing that, you’ll see us come back to social media," he said. "But for the time being, we're going to pull back."
Facebook CEO Mark Zuckerberg has faced criticism for the platform's struggle to deliver on promises to monitor rampant misinformation and hate speech on his platform.
PepsiCo, which has an annual advertising budget exceeding $2.5 billion, joins Hewlett Packard, Pfizer and Ford Motor Company, among others, in its targeted pause on ad spending.
"It's a major wake-up call for Facebook," former Unilever CEO Paul Polman told Yahoo Finance. "I think they’ll rally to the challenge. If they don't, we'll visit them soon in the graveyard of dinosaurs."