Published on August 1st, 2019 | by The Beam0
Google & Facebook Profit From Fossil Fuel Advertising
August 1st, 2019 by The Beam
By Liam J. Kelly
No matter how you slice it, the attention economy is big business. It has opened the gates for publishers big and small to get their message across and major Internet companies like Google and Facebook are cashing in on this surge of content. As reported in March 2019, CleanTechnica drew readers’ attention to how each of these platforms has become a massive advertising marketplace, boasting ad revenues in the billions of dollars a year.
What’s more, both Google and Facebook have been vital tools in enabling fossil fuel companies to pedal their often misleading agenda related to climate change developments. If the price is right, it appears that these Internet companies have no issue backtracking on their green initiatives and advertising policies.
The Social Media-Advertising Complex
In its latest earnings announcement, Facebook reported more than US$15 billion in total revenue between January and the end of April 2019. Of this sum, US$14.9 billion was accrued via advertising, with mobile ads making up 93% of this. Daily active users also showed increases and Facebook estimates that “more than 2.1 billion people now use Facebook, Instagram, Whatsapp, or Messenger (our ‘Family’ of services) every day on average.”
The breakout tool for generating revenue, however, has been the advent of the Stories feature across all their services. All four channels now each host over 500 million daily active Stories users, according to CNBC.
Sheryl Sandberg, the COO of Facebook, indicated that three million advertisers are using Stories to advertise across all four mediums. The company is intent on continuing this growth too, with Facebook’s CFO David Wehner adding:
“We can increase demand for Stories as we attract more advertisers and bring more effective direct response units to Stories, and over time that will play through to increased prices.”
The reach of Facebook alone is striking; Zuckerberg’s social media empire now commands an audience larger than most countries. As such, companies are eager to use the platform as leverage for their marketing campaigns. Learning about which firms are joining the advertising bandwagon is now easier than ever too.
Upon inquiry into which fossil fuel companies are advertising on Facebook, a representative pointed the author to the platform’s recently released Ad Library Report. The Report is a database that interested parties can use to discover which companies are using the platform and how much they are spending on advertising. At the time of writing, neither Apple, Amazon, nor Google responded to similar requests.
For its part, ExxonMobil spent over US$5 million to advertise on Facebook between May 2018 and July 2019, while BP and its subsidiaries spent less than US$300,000. Chevron spent roughly US$14,000 on supporting advertisements for “Vote James Ramos AD 40,” a state assembly member from California. Similarly, BP America helped fund parallel political interests to the tune of over US$600,000. ConocoPhillips also makes the list with a combined ad spend of over US$350,000 on Facebook. According to the Report, Total S.A. and Royal Dutch Shell did not contribute any funds to Facebook advertising in the past year.
If, however, one looks into the lobbying groups that represent these two companies’ interests, the Ad Library Report returns some interesting findings. The American Petroleum Institute, for instance, contributed roughly US$900,000 to advertising on Facebook from May 2018 to July 2019. For the uninitiated, the API is a trade organization sponsored by members of large and small companies in the natural gas and oil industry. Included in this membership is both Total S.A.
Tracing Royal Dutch Shell’s spending means taking a much more granular look into its lobbying expenses. Data provided by Open Secrets, a non-profit organization that collects information on money movements in American politics, reveals that Shell disseminated US$1.6 million via a number of different lobbyist groups. These included McLarty Inbound, Alpine Group, Harbinger Strategies, Monument Policy Group, Scrivner Leon Group, SMW Partners, and Squire Patton Boggs.
None of these groups are listed in Facebook’s Data Library, which means that one of the largest oil and gas companies in the world has zero exposure on Facebook.
It can be deduced that, like Chevron, many of these companies are funding political campaigns and lobbyist groups which pursue the same ends — some definitely advertising on Facebook at the financial gain of Facebook. Without too much digging, this is already a red flag for a company which recently launched a large-scale sustainability campaign. On the site’s landing page for its green initiative, Mark Zuckerberg is quoted as saying, “withdrawing from the Paris climate agreement is bad for the environment, bad for the economy and it puts our children’s future at risk.”
Mark Zuckerberg just weighed in on Trump pulling out of Paris Climate Agreement pic.twitter.com/ypSLzitB0w
— Charlie Warzel (@cwarzel) June 1, 2017
Although the project was launched in direct response to Trump’s withdrawal from the agreement in 2017, the fact that Facebook continues to profit from companies like ExxonMobil, BP, and Chevron is concerning. In the first, the message being broadcasted on the part of fossil fuel companies is often corrupt or misleading.
According to March 2019 data from InfluenceMap,the data firm stated that its research “finds that the five largest publicly-traded oil and gas majors (ExxonMobil, Royal Dutch Shell, Chevron, BP and Total) have invested over $1Bn of shareholder funds in the three years following the Paris Agreement on misleading climate-related branding and lobbying.”
This campaign has also included the use of social media, like Facebook and Instagram. Drawing from the same report, The Guardian revealed that these oil and gas majors spent US$2 million on these platforms “promoting the benefits of increased fossil fuel production” leading up to the US midterm elections in 2018.
Not only does this run in direct contrast with Facebook’s sustainability campaign, but it is also problematic when analyzed from a public health perspective. Zuckerberg’s company already bans tobacco, firearms, and drugs advertising due to the associated risks.
But if one considers the imminent health risks related to climate change, plus the clear evidence that the top fossil fuel companies are responsible for this warming, shouldn’t that also be grounds for banning fossil fuel interests like ExxonMobil, Chevron, and BP from using Facebook to advertise their illegitimate claims?
Dirty, Dangerous Money
The bleak picture outlined above holds true for Google, as well. The California-based Internet firm reported ad revenues of US$32.6 billion for the final quarter of 2018 and is Alphabet’s strongest revenue stream. This will likely continue as the company looks to spend more resources on platforms like YouTube to drive growth. The CEO of Google, Sundar Pichai, explained that “YouTube is a place where we see users come not only for entertainment. They come for information.”
Such expansion efforts will ultimately lead to a much more profitable bottom line. Much like Facebook, 100 percent of the cost of advertising on Google’s AdWords product goes straight into the company’s accounts. After that, Google enjoys another 32% slice on any derivative advertisements made within its AdSense advertising network. The exact figures for this business have been notoriously hard to uncover, even for regulators, but without advertising its clear that Google would be an entirely different company.
What the public does know, however, is the following: the top 100 fossil fuel companies that contribute to global warming have been shifting to digital channels over the past few years. In the Internet era, these channels can be reduced to four companies owning most of the digital advertising revenue, of which Google is far and away the top performer.
A New York Times article from December 2017 explained how any organization could simply “bid on search terms, and [Google] displays paid content at the top of its search results in the same blue font used for unpaid content.” This was true when the NYT reporter typed “climate change” into the search engine and was immediately greeted by an advertisement from DefyCCC claiming “nothing has been studied better and found more harmless than anthropogenic CO2 release.”
Since buying the term “climate change,” the founder of the DefyCCC (also known as “DefyClimateChangeCult”) reported a massive influx of site traffic. The content of the site includes Koch-backed climate denier and blogger Anthony Watts, among other writings that challenge climate change science.
Larger scale campaigns, like those lanced by The Natural Resources Defense Council (NRDC), bid on similar search terms in the sector. Writ large, Google is turning into one of the most contentious battlegrounds for the climate change info wars despite AdWords strict policy for posting misleading content. In the wake of this chaos, the platform is also enjoying record-breaking advertising revenue.
In conclusion, Facebook and Google are not only profiting from the spread of damaging information, but they are also in moral violation of their respective green initiatives and publication standards. Similarly to excluding Fossil Fuel interests from financial investments (divestment campaign) the public should push these two large companies to speak out on how they intend to treat Fossil Fuel advertising profits in the future.