Although Snap and Pinterest say they benefited revenue-wise from the Facebook boycott over the summer, Facebook barely felt a ding.
Advertising made up nearly all of Facebook’s revenue in the quarter – $21.2 billion of $21.5 billion overall, a 22% year-over-year increase.
And Facebook now has more than 10 million active advertisers across its services – which represents mega growth. That number is up from roughly 8 million advertisers in January. The majority are small and medium-sized businesses.
“The acceleration in revenue growth from Q2 to Q3 is largely driven by strong advertiser demand and the accelerating shift from offline to online commerce that we saw in connection with the pandemic,” Dave Wehner, Facebook’s CFO, told investors.
Average revenue per user in the United States and Canada in Q3 was $39.63, up from $34.55 YoY.
But there are headwinds coming in the form of an evolving regulatory landscape, continued uncertainty to do with transatlantic data transfers and coming platform changes, particularly on Apple’s iOS.
PSA for personalized ads
Mark Zuckerberg was somber when he talked about the “future of the internet.”
Personalized advertising, he said, is helping small businesses grow, find jobs and survive the economic downturn, and personalized advertising is under threat.
“I worry that some proposals, especially in the EU and actions planned by platform companies, like Apple, could have meaningful negative effects on small and medium-sized businesses and economic recovery in 2021 and beyond,” Zuckerberg said. “We’ll have to stand up strongly for our vision of an internet where individuals can have access to free services and every small business can have access to the same tools … as the big companies have.”
And Facebook still expects Apple’s upcoming IDFA changes to impact its revenue next year. Audience Network and app developers will bear the brunt, Wehner said.
“Businesses reach out to us all the time to ask how they can continue to run effective ads [in the face of platform changes],” he said. “We’re looking at various options, but the best view is that there will be significant headwinds next year as a result of these changes.”
Election integrity
Although Zuckerberg opened the call with a long exposition on what Facebook is doing to try and avoid a repeat of 2016 – political ad transparency, shutting down coordinated interference campaigns, rooting out voter suppression ads, etc., etc., etc. – investors blithely ignored the topic altogether.
Cue wall-to-wall questions about AR.
Augmented reality
Investors were deeply interested in Facebook’s plan for AR technology, which Zuckerberg said will be a big investment area in the year to come.
Apparently, Facebook is working with Luxottica to develop a pair of smart glasses that’ll be available at some point next year, and it’s laying the foundation for a pair of AR glasses down the line.
Uh, cool, I guess.
