July has come and gone, and to the chagrin of the #StopHateForProfit Campaign and the 1,100 companies that joined it, Facebook (NASDAQ:FB) has not made sufficient changes to its policies around hate speech and political disinformation.

In June, the organization of non-profits called for a boycott of the social network over what they believe to be its role as a megaphone for hate and disinformation. Now that the month has ended, we have some data to examine the impact of the campaign.

The "thumbs-up" sign at Facebook headquarters.

Image source: Facebook.

Facebook's recovery has stalled

The news was mostly lost in the shuffle as Facebook stock soared on its earnings report after breezing past estimates, but revenue at the social media giant actually decelerated through the first weeks in July, increasing by only 10%. While that was the same as the total for the second quarter, Facebook said revenue growth was flat for the first three weeks of April, implying roughly 15% growth in May and June.

If Facebook's business trended similarly to the broader economy, then ad sales likely recovered gradually over the course of the quarter, making the July results look even more paltry. The company said it expects revenue growth to remain around 10% in the third quarter, holding steady from the second quarter -- a sign that the boycott's impact could linger.

By contrast, Facebook's competitors expect to see sequential improvement from Q2 to Q3. Google-parent Alphabet noted a modest bump in search revenue in July, signaling a year-over-year increase after a 10% decline in the second quarter. Pinterest reported revenue growth of 50% through nearly all of July after its top-line grew just 4% in the second quarter, as July benefited from tailwinds from the Facebook ad boycott, and it expects revenue growth in the mid-30% range for the full third quarter. At Snap, revenue growth accelerated from 17% in the second quarter to 32% in the first 19 days of July. Twitter did not give any update on its July numbers but said performance was trending up at the end of the second quarter. Facebook, therefore, is alone among its peers in expecting just flat sequential growth in the third quarter.

On its earnings call, management sought to downplay the impact of the boycott, noting that it was one of a number of headwinds in July and the third quarter, including macroeconomic uncertainty, a normalization in community engagement following an earlier surge, the impact of regulation like the California Consumer Privacy Act, and changes to mobile-operating platforms like Apple's iOS that will make ad targeting more difficult, as well as the ad boycott.

Management also explained that its top 100 advertisers made up just 16% of revenue in the second quarter and said it primarily serves small businesses, as it now has 9 million advertisers on its platform.

What the advertisers did

What was most notable about advertising on Facebook last month is that the biggest impact didn't come from advertisers that had declared themselves part of the boycott but from those who quietly joined. According to data from Pathmatics, that group of advertisers took away nearly $5 million in daily ad spending on Facebook. As a whole, the top 100 advertisers spent $221.4 million last month, or 12% less on the social media platform than they did a year ago, as some advertisers in the group actually increased their spending, aiming to capitalize on the economic reopening. Among those who pulled spending without formally joining the boycott were Procter & GambleSamsungWalmart, and Geico.

At this point, advertisers are divided on whether to continue the boycott. Some plan to keep their marketing dollars off Facebook, while others believe they have fulfilled their commitment to the July abstention and are satisfied with Facebook's response. Facebook's Global VP of Business Solutions, Carolyn Everson, told Ad Age that a number of boycotters plan to come back to the site as Facebook has promised them a "set of deliverables, which we have sent out ... to many, many clients. They have the timeline in their hands and I've said to them, 'hold us accountable.'" 

Those deliverables haven't been made public, however, and an earlier meeting with boycott organizers left them dissatisfied, calling it "a disappointment."  

What's next

It's impossible to say how much of an impact the boycott is having, though it does appear to be shaving at least a few points off Facebook's revenue growth. 

While the first round of the campaign has passed, #StopHateForProfit has more plans for the future, including focusing on European companies and Facebook users. The upcoming U.S. election should also ensure the issue remains in the spotlight. The campaign called the July boycott "a warning shot across Facebook's bow," implying more action was to come. Meanwhile, a significant number of advertisers plan to continue avoiding Facebook, including Coca-Cola, Beam Suntory, General MotorsFordHonda America, and Unilever, among others.

Based on the post-earnings reaction, investors believe Facebook has passed its first test with the protests, but this is likely not the last time the issue will pressure the social media titan.