Covid-19 has done what no regulator, privacy group or data protection scandal has managed so far by whacking Facebook’s ad revenues as brands big and small rein in their social media adspend in the face of the coronavirus crisis.
While the tech giant has witnessed a huge increase in traffic, with messaging up 50% as users to keep in touch with friends and family, it reports that it has seen “a weakening” in its earnings from advertising.
In a blog post Facebook wrote: “We have received questions about revenue, so want to provide some context here too: Much of the increased traffic is happening on our messaging services, but we’ve also seen more people using our feed and stories products to get updates from their family and friends.
“At the same time, our business is being adversely affected like so many others around the world. We don’t monetize many of the services where we’re seeing increased engagement, and we’ve seen a weakening in our ads business in countries taking aggressive actions to reduce the spread of Covid-19.”
Google has yet to comment on its performance, although earlier this month analysts were predicting dire consequences from the global travel ban. Google, dominates the travel search market with travel ads making up 10% of all search ads and accounted for about $10.7bn of Google’s $98bn search revenue in 2019.
Meanwhile earlier this week, Twitter withdrew its revenue and profit forecast for the first quarter as well as its outlook on costs for the full year, citing a potential hit from the outbreak.
Twitter chief financial officer Ned Segal said the impact on advertising has been “more significant” in the past few weeks. He added: “We have made solid progress on our consumer and revenue product priorities, and we remain confident in our opportunity and strategy. We hope everyone stays healthy and safe.”
Twitter will provide an update on its first-quarter earnings call on April 30.
Chief executive Jack Dorsey said: “Twitter’s purpose is to serve the public conversation, and in these trying times our work has never been more critical. We’re seeing a meaningful increase in people using Twitter and our teams are demonstrating incredible resilience adapting to this unprecedented environment.
“We’ll continue to navigate this environment focusing on supporting our employees, customers and partners, while strengthening our service for everyone around the world and adjusting to a new operating and economic environment.”
However, while some brands are cutting spend, there are plenty of others who are keeping calm and carrying on…
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