FACEBOOK WARNS GROWTH TO DECELERATE MANDATES UPDATE The iPhone maker’s privacy changes make it harder for apps to track users and restrict advertisers from accessing valuable data for targeting ads. The company also announced on Wednesday that it would require anyone working at its U.S. offices to be vaccinated against COVID-19. Monthly active users came in at 2.90 billion, up 7% from the same period last year but missing analyst expectations of 2.92 billion and marking the slowest growth rate in at least three years, according to IBES data from Refinitiv. “The user growth slowdown is notable and highlights the engagement challenges as the world opens up. But importantly, Facebook is the most exposed to Apple’s privacy changes, and it looks like it is starting to have an impact to the outlook beginning in 3Q,” said Ygal Arounian, an analyst at Wedbush Securities. “Everyone will be watching any developments to their ad targeting system closely to see how that plays out given its huge role in helping Facebook monetise its apps,” said Tom Johnson, WPP Mindshare’s chief digital officer. The company’s total revenue, which primarily consists of ad sales, rose to $29.08 billion in the second quarter from $18.69 billion a year earlier, beating analysts’ estimates of $27.89 billion, according to IBES data from Refinitiv.įacebook, like its peers, has seen increased demand for digital ads as the pandemic drove consumers to shop largely online, forcing several businesses to create online stores and markets using social media platforms. Its revenue from advertising rose 56% to $28.58 billion in the second quarter ended June 30, Facebook said. It pointed to a 47% increase in price per ad. “In the third and fourth quarters of 2021, we expect year-over-year total revenue growth rates to decelerate significantly on a sequential basis as we lap periods of increasingly strong growth,” Chief Financial Officer Dave Wehner said in the earnings release. The world’s largest social network has been ramping up its ecommerce efforts, which are expected to bring additional revenue to the company and make its ad inventory more valuable. The push will be key to how Facebook, which hosts more than 1 million online “Shops” on its main app and Instagram, can grow its ad business amid the impact of Apple’s changes. It is also on the offensive to attract top social media personalities and their fans, competing with platforms like Alphabet’s YouTube and short-video app TikTok, which recently hit 3 billion global downloads. FACEBOOK WARNS GROWTH TO DECELERATE MANDATES UPDATEįacebook said this month it would invest more than $1 billion to support content creators through the end of 2022.
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