WEBVTT - Facebook's Ad Sales Taking a Hit 0:00:00.160 --> 0:00:03.760 This is Bloomberg Business Week with Carol Mazer and Jason 0:00:03.840 --> 0:00:07.360 Kelly on Bloomberg Radio. One story. We wanted to make 0:00:07.400 --> 0:00:10.239 sure we talked about today because we were thinking about it. 0:00:10.280 --> 0:00:12.280 I think a lot of the weekend and certainly is 0:00:12.360 --> 0:00:16.480 the day began, Carol. The headlines just keep coming for Facebook. 0:00:16.760 --> 0:00:18.840 We're going to talk to Tom Giles in a second, 0:00:18.840 --> 0:00:21.120 but first let's hear a little bit of sound from 0:00:21.239 --> 0:00:25.160 Nick Clegg. He is Facebook's VP for Global Affairs and Communications, 0:00:25.200 --> 0:00:28.480 talking about the issues facing the company. I think it's 0:00:28.520 --> 0:00:31.080 quite right that civil rights organizations should pressure us to 0:00:31.120 --> 0:00:35.879 always do do better. I think that's totally fair. We 0:00:35.920 --> 0:00:39.839 have three billion people or thereabouts on our platform around 0:00:39.880 --> 0:00:44.000 the world. Thankfully, hate speeches are a tiny minority of 0:00:44.000 --> 0:00:47.360 the total amount of content on our on our platforms 0:00:47.440 --> 0:00:51.199 around the hundred and fifteen billion messages are sent on 0:00:51.240 --> 0:00:54.160 our platforms on on every you know, on an average day, 0:00:54.200 --> 0:00:56.160 and only a tiny fraction of that is hate speech. 0:00:56.200 --> 0:00:58.760 But because it's a tiny fraction, it might be harder 0:00:58.800 --> 0:01:02.440 to identify fine remove. But we should, of course always 0:01:02.560 --> 0:01:06.640 try to do as well as we possibly can well 0:01:06.640 --> 0:01:11.479 trying to do their best, says Nick clegg over at Facebook. 0:01:11.760 --> 0:01:15.360 Let's break it down with Tom Giles, so excited to 0:01:15.360 --> 0:01:18.440 have him on the show, Executive editor for Global Technology 0:01:18.480 --> 0:01:20.760 joining us on the phone from San Francisco. So this 0:01:20.840 --> 0:01:23.680 is quite a moment for Facebook. It feels like Tom, 0:01:23.760 --> 0:01:27.959 help us understand how important it is. Absolutely well, it's 0:01:27.959 --> 0:01:29.840 great to be on the show. Thanks for having me. 0:01:30.640 --> 0:01:34.679 Right now. Facebook is under attack from a couple of 0:01:34.720 --> 0:01:39.080 different areas. One, there's civil rights groups who were really 0:01:39.160 --> 0:01:43.840 set up with what they consider to be ineffective efforts 0:01:43.880 --> 0:01:47.520 at policing hate speech, as Nick was as Nick mcleg 0:01:47.600 --> 0:01:52.640 was just discussing disinformation. There's a long litany of gripes 0:01:52.760 --> 0:01:56.800 against many of them deserve um. The fact of the 0:01:56.800 --> 0:01:59.320 matter is Facebook hasn't done a good job of keeping 0:01:59.520 --> 0:02:02.240 harmful content off its site, whether you define that as 0:02:02.280 --> 0:02:07.760 hate speech, glorification of violence, disinformation around elections, etcetera. The 0:02:07.800 --> 0:02:11.160 list goes on and on. Now, in fairness, Facebook has 0:02:11.200 --> 0:02:14.800 taken several steps, as Nick clad pointed out Mark Zuckerberg 0:02:14.919 --> 0:02:18.880 last Friday outline some some changes that they're making. Civil 0:02:18.960 --> 0:02:22.519 rights groups are not a peace and now you have brands, 0:02:22.560 --> 0:02:27.960 global brands Board, Microsoft, Core Rox. The list goes on 0:02:28.000 --> 0:02:31.800 and on and on of people saying we're either we're 0:02:31.840 --> 0:02:36.160 gonna pause spending on either Facebook in particular or social 0:02:36.160 --> 0:02:41.119 media more generally. We're concerned about harmful content, and we're 0:02:41.120 --> 0:02:45.680 concerned about our ads appearing alongside content that is what 0:02:45.800 --> 0:02:48.480 we consider to be inappropriate. So but really trying to 0:02:48.560 --> 0:02:51.079 hit Facebook where it hurts the most and that's its 0:02:51.080 --> 0:02:53.200 bottom line. God, I have so many questions for you, 0:02:53.280 --> 0:02:55.840 tom Um. I feel like, why did it take so 0:02:55.880 --> 0:02:58.480 long for companies to react? Why did it take so 0:02:58.520 --> 0:03:01.520 long for Facebook to react? You know? And if we 0:03:01.520 --> 0:03:04.880 weren't in this situation where we've all been locked down, 0:03:05.480 --> 0:03:07.960 and I feel like we're all experiencing, you know, the 0:03:08.040 --> 0:03:11.959 inequalities that are being unearthed again in our society altogether. 0:03:12.120 --> 0:03:15.760 And if George Floyd, you know, hadn't been killed in Minneapolis, 0:03:16.000 --> 0:03:19.480 would we be having this conversation and what would everybody 0:03:19.720 --> 0:03:21.520 and the social media platforms kind of just be going 0:03:21.560 --> 0:03:25.400 about their business. Well, I think that we we are 0:03:25.440 --> 0:03:29.200 at a moment right now as a society, and George 0:03:29.200 --> 0:03:31.920 Floyd's killing had a lot to do with it. The 0:03:32.000 --> 0:03:37.040 discussion around race, the discussion around violence against people of color, 0:03:37.320 --> 0:03:41.440 police brutality. Those conversations have been brought to the four 0:03:41.680 --> 0:03:44.520 as a result of George Floyd, and you've seen corporate 0:03:44.560 --> 0:03:50.000 America really take a stronger stand than they've taken before. 0:03:50.040 --> 0:03:53.800 I mean, clearly, police violence against people of color is 0:03:53.840 --> 0:03:59.360 not new. What's different is this time corporate America seems 0:03:59.400 --> 0:04:04.240 to be getting the message in a stronger way. You've 0:04:04.240 --> 0:04:08.000 seen changes in brands, You've seen changes in logos, You've 0:04:08.000 --> 0:04:10.680 seen changes in you know, some of the products that 0:04:10.760 --> 0:04:13.840 we've all grown up with. That's just one indication that 0:04:14.320 --> 0:04:19.599 corporate America recognizes that business as usual is no longer 0:04:20.400 --> 0:04:22.919 gonna work here um, and that they need to be 0:04:22.960 --> 0:04:25.920 involved and they need to take the stand now. When 0:04:25.920 --> 0:04:28.240 it comes to Facebook, there's a couple other things that 0:04:28.320 --> 0:04:31.040 work here. Not only is there this cultural discussion, this 0:04:31.200 --> 0:04:35.360 dialogue much needed, there's also the global pandemic that has 0:04:35.400 --> 0:04:40.080 brought economic activity around the world, particularly in the US 0:04:40.120 --> 0:04:43.839 in many sectors to a standstill or slowed them considerable. Right. 0:04:44.560 --> 0:04:49.600 So when that happens, global brands decide, right now is 0:04:49.640 --> 0:04:51.479 a good time for me to tap the brakes on 0:04:51.560 --> 0:04:55.440 marketing spending. We saw that happening starting around March when 0:04:55.440 --> 0:04:59.839 the when the quarantines began. It continued throughout the second quarter, 0:05:00.440 --> 0:05:05.120 and it was its experience largely expected to continue probably 0:05:05.120 --> 0:05:07.120 a bit a little bit in the third quarter in 0:05:07.160 --> 0:05:11.520 the fourth quarter, but brands were already raining in spending. 0:05:12.040 --> 0:05:16.440 There's little economic activity, little there's little reason if you're 0:05:16.480 --> 0:05:19.200 if you're choosing between whether the fireworkers or rain in 0:05:19.240 --> 0:05:21.719 your marketing budget, you're going to cut your marketing budget. 0:05:21.960 --> 0:05:24.320 So this is a way for companies to get in 0:05:24.360 --> 0:05:27.200 there and say we're doing something about race, and we're 0:05:27.240 --> 0:05:30.000 also you know, justifying why we're cutting back on spending 0:05:30.000 --> 0:05:32.480 on marketing. So Tom, I have to ask you. We 0:05:32.480 --> 0:05:34.320 were talking about this a little bit before we came 0:05:34.360 --> 0:05:37.000 into this segment, you know, looking at what's going on 0:05:37.720 --> 0:05:41.800 um with Reddit especially and some of the moves that 0:05:42.200 --> 0:05:46.479 they are are making and twitches making around their content. 0:05:47.279 --> 0:05:49.880 I do wonder as you look back on it, and 0:05:49.920 --> 0:05:52.479 obviously this is sort of instant history, but I mean, 0:05:52.880 --> 0:05:57.279 was Jack Dorsey's moment a few months ago? I guess 0:05:57.279 --> 0:05:59.839 it was about a month ago or so, what was 0:06:00.080 --> 0:06:02.480 that as important as we think it was in terms 0:06:02.480 --> 0:06:05.760 of maybe setting a new tone for what social media 0:06:05.960 --> 0:06:09.600 cannon should be doing. When it comes to speech. I 0:06:09.640 --> 0:06:12.880 think he put his foot down. He said that we 0:06:13.320 --> 0:06:16.960 as social media can push back. We can say enough 0:06:17.080 --> 0:06:19.880 is enough, and we don't have to be pushed around 0:06:19.880 --> 0:06:25.479 by any group. Um. In this case, there are some 0:06:25.560 --> 0:06:28.360 things that Trump has said and done in recent months. 0:06:28.360 --> 0:06:30.760 I mean this is not new, right there has made 0:06:30.800 --> 0:06:34.359 controversial statements and tweets for a very long time. But 0:06:34.440 --> 0:06:37.919 when you combine that with the global pandemic and the 0:06:37.960 --> 0:06:40.799 misinformation that has come from certain people close to Trump, 0:06:40.880 --> 0:06:44.320 it's not Trump himself. Um, when you look at that, 0:06:44.480 --> 0:06:46.679 When you look at the things that he has said 0:06:47.279 --> 0:06:50.000 that that have condoned or glorified or otherwise kind of 0:06:50.080 --> 0:06:55.560 rallied people around violent or violence or violent imagery, this 0:06:55.640 --> 0:06:58.120 is where this is where, this is where Twitter, Jack 0:06:58.200 --> 0:07:01.599 Doors in particular, said, We're going to start to annotate. 0:07:01.640 --> 0:07:04.800 We're going to start to put some disclaimers, some warnings 0:07:04.839 --> 0:07:09.520 around Trump's tweets when we think that they are inappropriate, 0:07:09.600 --> 0:07:14.400 violat our policies, or or glorify violence or spread disinformation. 0:07:15.680 --> 0:07:20.560 Why that wasn't happening? I mean basically, Twitter's critics, just 0:07:20.720 --> 0:07:24.320 like Facebook's critics, would say, it's all long overdue they're 0:07:24.360 --> 0:07:27.320 also going to say, well, we're glad it's finally happening, right, 0:07:28.040 --> 0:07:30.520 and the stakes are really high. We're in a global pandemic, 0:07:31.120 --> 0:07:33.960 we've got we've got race as a matter of national 0:07:34.320 --> 0:07:37.600 debate and discussion, and we've got the election in four 0:07:37.680 --> 0:07:40.880 or five months. Yeah, there's a lot going on, and 0:07:40.960 --> 0:07:43.400 you're right, never never more important than now to be 0:07:43.480 --> 0:07:47.120 having these discussions. What a treat to up with, Toms. 0:07:47.160 --> 0:07:55.400 What of our favorites for having me? It's great. It's again, yes, done, done, done, 0:07:55.640 --> 0:07:58.480 done and done. Tom Giles, executive editor for glovel Technology, 0:07:58.560 --> 0:08:02.560 joining us from servances Scout one of Bloomberg's best full 0:08:02.600 --> 0:08:05.320 out so small stop and I gotta just say, Facebook 0:08:05.320 --> 0:08:07.040 shares they ended up more than two percent. They were 0:08:07.160 --> 0:08:09.720 down nine percent earlier in our session. They were down 0:08:09.800 --> 0:08:13.720 eight percent Friday. But it's interesting, despite you know, big 0:08:13.760 --> 0:08:17.320 time investors pulling back the stock, you know, continue to 0:08:17.840 --> 0:08:20.960 rally off of that low. So yeah, that's you know, 0:08:21.040 --> 0:08:22.720 money talks in a lot of different ways.