Facebook, Inc. (NASDAQ:FB) has come under pressure in recent weeks over its failure to act over misinformation or hate speech in its social networking app. Microsoft Corporation (NASDAQ:MSFT) & Sony Corp (NYSE:SNE) are some of the big brands that have paused ad spending on the giant networking app. However, the suspension may not last long as it appears the big brands cannot do without the networking app.
Sony PS5 Factor
Sony has only suspended advertising on Facebook for a month, signaling it is not ready to permanently end its ties. Facebook’s massive user base running into billions of users daily is one that Sony cannot do without, especially in its bid to strengthen its competitive edge in the multi-billion gaming industry.
Sony suspending advertising on Facebook might as well be a money-saving tactic as the company has hinted it would come back at the end of July. With the company poised to launch PS5 later in the year, cutting ties with Facebook appears highly unlikely.
It appears that Sony is only saving cash for a month ahead of the big launch of its much-awaited PS5 gaming station. With the new Playstation, the company will have to ramp up advertising, especially on Facebook, in a bid to attract more sales. Conversely, it is likely that the company will lift the spending ban on Facebook ahead of the big launch.
Microsoft-Facebook Close Ties
Microsoft, on its part, has not made a big declaration on pulling ads out of Facebook. The software giant has only made it clear that it does not want its advertisements appearing close to controversial topics or misinformation
It is also highly unlikely that Microsoft will sever ties with Facebook completely, given the intimate relationship they enjoy. In recent years, the company has handed hundreds of thousands of Mixer users to Facebook Gaming.
Like Sony, Microsoft also needs Facebook to reach a bigger customer base with its software products and gaming products led by Xbox. Last year, the company spent close to $119 million on advertising on Facebook and was the third-largest advertiser.