Facebook ad revenue grew by more than 45 percent in the first three months of 2020, reaching $ 25,4 billion - or about seven times that of Twitter for a full year.
However, the company sees some potential problems on the horizon that could limit its continued growth: regulators are considering ad tracking practices, and a feature launched by Apple this week could hurt its ability to target advertisements.
“We continue to expect increased challenges for ad targeting in 2021 from regulatory and platform changes,” Facebook CFO Dave Wehner said in the company’s Q1 2021 earnings call .
Wehner cites iOS 14.5 as an example, which has a feature that allows iPhone and iPad users to easily stop watching in certain ways.
Facebook, however, believes that its advertising revenue will continue to increase for the rest of 2020 even with these changes, but predicts that there will be a slowdown in the second half of the year. The company says that Apple's regulators and changes will play an important role.
The new update requires applications such as Facebook to proactively ask users for their consent to be tracked for advertising purposes.
Facebook and other companies expect many people to refuse tracking, which will impair their ability to use targeted ads. Facebook said the operation was a threat to businesses based on these ads.
"Apple's latest update threatens personalized ads that millions of small businesses rely on to find and reach customers"
In a statement to investors, Facebook executives said the company was working on improvements to its ad technology that would allow better ad targeting and that they would need access to less data. Facebook COO Sheryl Sandberg described it as a "reconstruction" of the company's technology.
Meanwhile, the European Union's data protection team has proposed banning web-based ad targeting. European lawmakers are planning a major overhaul of digital market regulation, and Facebook could come up with fewer tools for targeting ads to individual users.
But for now, Facebook continues to grow. Daily users in all Facebook products reached 2,72 billion, up from 2,6 billion at the end of the previous quarter, while monthly users reached 3,45 billion.
George is still wondering what he is doing here….
