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Facebook said digital ad prices are soaring amid rising demand, a day after Google dit enjoyed a similar dramatic benefit from the pandemic.
Mark Zuckerberg’s social media group’s first-quarter revenue rose 48% to $ 26.1 billion, exceeding analysts ’expectations of $ 23.7 billion, the company reported Wednesday.
David Wehner, chief financial officer, said quarterly revenue growth was driven primarily by a 30% year-over-year increase in the average ad price (high-demand signal) and a 12% increase in ad revenue. published ads ”.
He added: “We expect advertising revenue growth to continue to be driven primarily by price for the rest of 2021.”
Facebook’s net revenue rose 94% to $ 9.5 billion or $ 3.30 per share, well above the agreed-upon estimates of $ 6.8 billion or $ 2.34 per share.
Facebook shares rose 5.4% shortly after earnings were posted, reaching a record high.
The company, which earns most of its revenue from the sale of specific advertising, has invested in new tools for video chat and online shopping, as non-entertainment users have been stuck at home. during pandemic blockades.
Just last week, Facebook announced plans to introduce a set of audio and podcast features, as well as ways for Instagram influencers to make money more easily by promoting brands or selling their own products.
On March 31, monthly active users increased 10% year-on-year to 2.85 billion. Monthly users of its app family (which includes WhatsApp and Instagram) rose 15% to 3.45 billion.
In its guidance, Facebook said it hoped second-quarter revenue growth “would remain stable or modestly accelerate relative to its latest earnings, as advertisers massively slowed spending in the second quarter of the year. last year as the pandemic affected the US and Europe. But he said the growth rate would “slow down significantly” in the third and fourth quarters, given higher comparators.
On Wednesday he also reiterated previous warnings about this week’s introduction of Apple privacy policies, which prohibit apps and advertisers from collecting data about iPhone users without their explicit consent.
Most users are expected to reject tracking, causing a severe blow to app developers, including Facebook, which is heavily dependent on the sale of personalized ads. Wehner said Facebook expected “headwind-oriented ads” for the changes to “begin to have an impact in the second quarter.”
Facebook has embarked on a pressure offensive against the changes, arguing that Apple is motivated by profits rather than privacy. Zuckerberg recently suggested that the change could be an advantage for Facebook if it encourages companies to move their budgets away from advertising and direct commerce.
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