Despite Spike in the Usage, Facebook Says That the Ad Business is ‘weakening’
Like Twitter, Facebook joins in to acknowledge that the coronavirus pandemic is generating a good amount of spike in the user activity on the platform. But, this doesn’t mean profit, there are steeper losses on the revenue end of its business.
This trend is set to affect most digital advertising sector- which fortunately Google and Facebook dominate. This is generally affected by the coronavirus, which is adding pressures that mounted during this time of the pandemic.
Once the pandemic will wear off, the economic consequences are going to be severe. Together, Facebook and Google may lose up to $44 billion in 2020. This will make the platform’s highest hit by the current volatility.
However, given the stature of both the companies, the ad business may suffer, but that they will remain profitable despite slides in revenue.
The Facebook main concern is that the type of services people currently are looking for is mainly for WhatsApp or Messenger, like group calling or live streaming, etc. These are the two features people do not use on Instagram and other platforms much.
Many marketers are cutting back or maybe entirely freezing their strategies to promote on Facebook and also are cutting down on spending.
Twitter was the first one this week to pull its Q1 revenue outlook, which indicated shrink in the advertiser demand. It was also the first major ad-supported platform to disclose the dip in the market against the pandemic.