Facebook (NASDAQ:FB) is already facing headwinds from reduced advertising budgets because the COVID-19 pandemic is causing businesses to reduce expenses. Now, large public companies have started announcing that they will stop paid marketing efforts on Facebook in support of the Stop Hate for Profit campaign. 

Although most of Facebook's sales come from small businesses, the social media giant generates a quarter of its annual revenue from big corporations. Some of these major brands, such as Coca Cola and Starbucks, said they would stop advertising on all social media sites, not just Facebook. That raises a question: Could Disney (NYSE:DIS) profit from the changing landscape?

Various media screens overlaid over a cityscape at night.

Image Source: Getty Images.

Disney has various options for advertising dollars

Disney might be a candidate to receive advertising funds on the move for three reasons. 

First, its media segment, which includes its cable channels, provides a broad set of opportunities for promoters looking to reach target audiences. Even as many people are cutting the cord and moving to streaming services, Disney's cable channels are performing relatively well. At the end of fiscal 2019, ESPN had an estimated 83 million domestic cable subscribers, Disney Channel and FX each had 86 million, and National Geographic had 87 million, just to name a few of Disney's cable offerings. The variety in Disney's stable could help promoters reach a broad set of differentiated audiences.

Second, marketing budgets can also reach consumers on Disney's ad-supported Hulu accounts. Many Hulu viewers can't skip or fast-forward a commercial. Knowing that an ad will be consumed in its entirety increases the value proposition for marketers.

Finally, with the National Basketball Association season set to resume at the end of July, the timing of funds leaving Facebook and arriving at ESPN could sync up perfectly. The NBA plans to return to action on July 30. Demand for in-home entertainment has soared since stay-at-home orders started -- and will likely continue to thrive as these orders are extended.

Most major leagues suspended their seasons in March, so fans are missing their live sports fix. When the NBA season resumes, this pent-up demand could be the perfect opportunity for ad dollars seeking a new home.

Live sports demand a premium price for ad placement because people generally prefer to view these events as they happen. Watching events live exposes viewers to more commercials. Other broadcasting types can be recorded and viewed later, allowing viewers to fast-forward through most of the ads. 

What this means for investors

The shift of marketing dollars away from social media might be good for Disney in the short term -- with the potential to be even better in the long term. The boost in revenue would come at a convenient time for the company, which is operating at a fraction of its capacity due to shutdowns of its park, cruise, and resort operations. If the ads prove effective for businesses in terms of return on investment, that could lead to a longer-term boost in revenue for Disney.