The outlook for tech and Facebook ad boycott: Anduril's Palmer Luckey

Palmer Luckey, founder of Oculus and Anduril, joins "Squawk Alley" to discuss the tech industry, Facebook's ad boycott, diversity and more. Subscribe to CNBC PRO for access to investor and analyst insights on Facebook and more: https://cnb.cx/3dIH56N

Some advertisers that rely heavily on Facebook but want to join the recent advertising boycott are faced with a dilemma: Do they risk hurting business in the near term, or risk losing customers who might punish them for not participating in the long term?

With hundreds of businesses joining a boycott of Facebook ads (and some taking it a step further by pausing spending on all social media), some have speculated why some companies have yet to press pause. Others have taken a more cynical view, saying that joining the boycott is simply providing cover for broader marketing cost-cutting associated with the coronavirus pandemic.

But Facebook is a massively efficient channel for many businesses, and experts say cutting out the platform can be a major sacrifice, especially those that rely on it to bring in new customers.

Dashlane chief marketing officer Joy Howard last week wrote in a blog post about the password manager company’s decision to join the ”#StopHateForProfit” boycott that stepping away from the platform “even for a month… will be hard for many of us.”

She told CNBC in an interview Monday that Facebook is an “incredibly effective channel” and that it takes discipline and sacrifice to move to alternatives. She said the company had already wanted to reduce its dependence on Facebook and has been actively testing on other channels.

“The more dependent a brand is on direct response, the greater the sacrifice of getting off of Facebook,” she said, referring to direct response advertising, which includes methods that drive consumers to take an immediate action, like download an app or buy something from an e-commerce site. “I wish it was easier for smaller businesses and smaller brands and ones that are more dependent on Facebook to take that stand, but if they’re not doing it, it’s most likely because they can’t afford not to do it.”

Howard said she’s hopeful that her company is able to be successful on other marketing channels.

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