Companies

Facebook controversy is unlikely to make Indian firms to pull out ads, say brand experts

Nandana James Mumbai | Updated on August 21, 2020

Facebook is not likely to face a backlash from Indian advertisers like it did in the US   -  REUTERS

Most Indian consumers are indifferent to firms’ political stance, though a group of ‘woke’ consumers in India is emerging

While Facebook has reportedly lost over $7 billion due to companies in the West pulling out advertising from the platform over its refusal to take down disruptive content, the same is unlikely to happen in India, its largest market.

Unlike in the West, where consumers expect brands to stand up for causes — including political ones — a vast majority of Indian consumers remain indifferent to companies’ moral stance, said experts. This is even despite the recent revelation on how Facebook deliberately ignored hate speech from members of the ruling BJP.

A report by The Wall Street Journal last week reported that Facebook had ignored hate speech violations by BJP leaders.

Experts told BusinessLine that only the Indian arms of the global-headquartered companies, which have already pulled out advertising globally, are likely to do the same in India, if at all. Even if they do, they are likely to be wary about publicising it.

“Even when the MNCs pull out advertising, they will do it quietly — they will not wear it on their sleeves,” pointed out Harish Bijoor, brand guru & founder, Harish Bijoor Consults Inc.

Avoiding controversy

“Indian companies have as yet, not come out openly to take stands on contentious issues, preferring to stay away from controversy or publicly disclosing their positions. Even if a few companies may consider pulling out advertising, a big deterrent would be the fear of sending out the wrong signal to the ruling party. There will be no direct impact or fall in advertising on Facebook India as a result of this controversy,” said Lloyd Mathias, Business Strategist and former Asia Marketing head of HP Inc.

Companies like Coca Cola, Unilever, Starbucks and Microsoft have pulled out advertising on Facebook. This is because big brands in the West have always had a culture of taking decisive stances and standing up for causes, explained Subramanyeswar S, Group Chief Strategy Officer, MullenLowe Lintas Group.

In India, post the WSJ report, the backlash is mostly limited to the outcry by the Opposition parties, he pointed out.

In the US, the use of social media for building political influence has been a hot topic of discussion over the last decade and there is high public awareness about this topic in the West, said Shailesh Kapoor, founder and CEO, Ormax Media, a media consulting firm.

“However, in India, this understanding is restricted to a few urban citizens only, and the larger mass does not fully understand this topic. Brands take decisions such as withdrawing advertising from a particular platform when they think the public opinion is against that form of advertising. In India, a public opinion building against Facebook is unlikely to happen in any significant way, and hence, one doesn't expect any major impact on advertising or usage of Facebook,” explained Kapoor.

‘More about indifference’

As Mathias pointed out, “It’s not that Indian consumers prefer neutrality, it’s more about indifference.” Most consumers in India still look at the price-value equation of their purchase, and not larger considerations about the company’s morality, he said.

“India is not a market which accepts brand activism in terms of brands getting involved in anything that is outside the realm of commerce. Brands have realized that it’s better to unite markets and lead rather than divide markets and lead,” explained Bijoor.

Indian consumers also do not hold brands accountable for the media they advertise in, seeing advertising and editorial as two independent streams, Mathias pointed out.

“While brands are sensitive to public opinion, they also, by and large, want good advertising platforms to advertise on. It’s a balance between public sentiments and the advertising opportunity,” said Sam Balsara, chairman and MD, Madison World.

Even in the US, the pulling out by companies seems to be a temporary affair fuelled by factors like the political backlash against US President Donald Trump over his mishandling of the pandemic, and might only last until the US elections, said Subramanyeswar.

For Facebook, this is akin to a warning shot from brands, he said, adding that whatever happens temporarily is not going to affect Facebook in any way as brands have also not said that they are permanently cutting ties with the platform.

“There is a need for a permanent solution, which will not be found only by advertisers pulling out. The solution for this will also emanate from technology. A solution needs to be found to disallow the fundamental issue of hate speech on such platforms...The solution to this will be largely technology based and less human interference based, I feel,” said Ashish Bhasin, CEO, APAC and Chairman, India - Dentsu Aegis Network.

‘Woke’ consumers

Meanwhile, with increasing activism in social media, this consciousness is starting to build up and a group of ‘woke’ consumers has begun to emerge in India, said Mathias.

Brands in India have also stood up for various causes or purposes, pointed out Subramanyeswar. “People are warming up to the idea of brands taking a stance. That’s the reason why you see a lot of purpose-led brand building in the last 5-10 years.”

People are no longer looking at engagements with companies like just another commercial transaction, said Subramanyeswar.

“People are looking at themselves as being part of something bigger. ‘When I am buying this brand, what am I buying into? Is it something far beyond the transaction that I am doing? That’s what motivates and excites me about the brand.’ That will happen in India also — we are not far away from that,” he explained.

Unlike before, when companies had strong product differentiators, now, it’s only when the brands are led by a purpose and when they take a stance that they would end up having a sustainable advantage over the others, he added. However, people in India still haven’t warmed up to the idea of brands taking political stances, he said.

So, will anything at all change due to the recent Facebook controversy?

“Brands will continue to use their media budgets based on commercial considerations — of reach and impact — but may start getting conscious of the editorial environment they advertise in. This can intensify if consumers, especially millennials, publicly call out their discomfort of their favourite brands for advertising in media that seem to propagate hate speech,” said Mathias.

In an increasingly polarised world, consumers will include a brand’s stand on key issues when evaluating their purchase decisions, he said.

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Published on August 21, 2020
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