Facebook’s had a rough time in the media over its approach to user privacy and election hacking. But it’s party time on the business side, as the money keeps coming in thanks to more people using Facebook and mobile ads driving revenue, and despite impending data regulations in Europe, Facebook executives said Wednesday they expect to continue winning media budgets. In what’s become a regular occurrence, Facebook posted eye-popping business results.
The highlights:
2.2 billion monthly active users and 1.45 billion daily active users, both up 13 percent from the previous year
Added 67 million users from the last quarter (13 million in the U.S. and Canada)
$11.97 billion in quarterly revenue (down $1 billion from the prior quarter, but up $3.94 billion from the previous year)
Profit was $4.99 billion
91 percent of its ad revenue came from mobile, up from 85 percent from the previous year
Overall ad revenue up 50 percent from last year
Yet Facebook’s future success won’t be easy. Facebook’s relies on targeted advertising, and impending privacy regulations in Europe and Facebook’s restrictions for data partners, in the wake of Cambridge Analytica, could decrease its efficiency. After the General Data Protection Regulation goes into effect next month, user data will be severely restricted in one of its crucial demographics for revenue. While U.S. and Canada is Facebook’s biggest revenue driver at $5.6 billion last quarter, Europe follows at $3 billion. Europe also has been its fastest-growing segment with average revenue per user up nearly 50 percent from the year prior, Axios noted.
But Facebook claimed that these restrictions will not lead to a disaster in ad effectiveness.
“Targeted ads that respect people’s privacy are better ads,” Facebook Chief Operating Officer Sheryl Sandberg said in her prepared remarks.
Privacy advocates will turn red in the face over the statement on the assumption that targeted ads rely on data collection that doesn’t respect privacy. But that’s a fight Facebook appears willing to have, as its defense against concerns has fallen squarely in the be-more-transparent approach rather than the change-the-product-that’s-making-us-billions tack.
For what its worth, Facebook said user growth in Europe may be “flat” in next quarter, and there is the “potential for some impact on advertising revenue,” Facebook’s Chief Financial Officer David Wehner said.
“We will be monitoring this closely,” he added. “Fundamentally we think we can build an ad business while providing the protection. We don’t expect the changes will significantly impact advertising revenue, but there’s certainly the potential for some impact [on] our optimization potential at the margin.”
Facebook positioned GDPR as a larger industry issue. Wehner and Sandberg argued that they can still be strategic of winning budgets.
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