Close Menu
Money 101
  • Business
  • Lifestyle
  • News
  • Wealth Creation

Newsletter

Get the financial tips, offers and more

What's Hot

Critical Questions About Funeral Cover

September 19, 2024

Mortality Benefits

September 19, 2024

How do You choose a Medical Plan?

October 2, 2023

3 increases in medical rates in 17 months = 27%!

Sponsor: Ubuntu CapitalUbuntu CapitalOctober 2, 2023
Tuesday, May 13
Facebook X (Twitter) Instagram
Money 101
  • Business
  • Lifestyle
  • News
  • Wealth Creation
Money 101
Home»Business»Facebook announces slowing advertising sales & revenue
Business

Facebook announces slowing advertising sales & revenue

EditorBy EditorNovember 3, 2016No Comments3 Mins Read
Facebook Twitter Pinterest LinkedIn Tumblr WhatsApp VKontakte Email
Share
Facebook Twitter LinkedIn Pinterest Email

Facebook’s sales hit yet another new record in the third quarter, but the boom times may be ending.

On a conference call after its earnings report Wednesday, Facebook CFO David Wehner spooked investors by talking up plans for “aggressive investment” in 2017 even as it expects sales growth to slow.

 We expect to see ad revenue growth rates come down meaningfully [in 2017],
” Wehner said.

The reason: Facebook expects slower growth in “ad load,” or the number of ads it can put in front of users.

Facebook’s revenue surged to $7 billion in the September quarter, up 59% from the same quarter a year earlier. In fact, Facebook sales for this quarter are nearly as much as its total revenue for all of 2013.

Bizlink Creative are market leaders in both Facebook and Google advertising to help your business generate leads and brad awareness
Bizlink Creative are market leaders in both Facebook and Google advertising to help your business generate leads and brand awareness, Click this image to go to Bizlink Creative

Facebook’s remarkable sales growth has been fueled by its success in transitioning to selling ads on smartphones and tablets. Mobile ads now account for 84% of Facebook’s overall ad revenue, compared to almost nothing in mid-2012.

But that sales growth depends on Facebook’s ability to place more and more ads in the feed — and charge more for them. Now, it wants investors to know it may be reaching its limits with the former.

Facebook’s stock, a juggernaut in recent months, fell as much as 7% in after hours trading following Wehner’s comments.

Wehner made similar remarks about ad load sales growth on Facebook’s last earnings call in July.

“Since ad load has been one of the important factors in our recent strong period of revenue growth, we expect the rate at which we are able to grow revenue will be impacted accordingly,” he said then.

This time, however, Wehner went one step further by saying ad sales growth would fall “meaningfully.”

The troubling comments and sharp investor reaction come against the backdrop of what was otherwise a strong quarter for the company.

The social network revealed it had 1.79 billion monthly active users as of the end of the third quarter, up from 1.39 billion a year earlier. That’s more than half of the 3.2 billion people estimated to have access to Internet worldwide.

To put it another way: Facebook (FB, Tech30) has added the equivalent of Twitter’s (TWTR, Tech30) entire user base in one year.

Wall Street once viewed mobile as the Achilles’ heel for Facebook because the site was originally designed for desktop. Now, Facebook has one billion monthly users who only use mobile — and millions of businesses eager to reach them through ads.

If you need to meet more clients, get more leads click this image to go to Bizlink Creative.
If you need to meet more clients, get more leads click this image to go to Bizlink Creative. http://creative.bizlink.co.za/

Yet, the most pressing concern for Facebook may simply be that there is only so much room left to squeeze ads onto the social network to keep up its incredible sales growth.

Facebook has quickly been building up an arsenal of other services that also have one billion users and are primed to make money. That list includes Facebook Messenger and WhatsApp, which are both expected to monetize interactions between businesses and customers.

Instagram recently topped the 500 million mark and has begun ramping up its advertising business. This week, Instagram also announced plans to make it easier to shop for items on the platform.

digital marketing
Share. Facebook Twitter Pinterest LinkedIn Tumblr WhatsApp Email
Previous ArticleTrump Vs Clinton – How will this affect the SA Economy
Next Article 7 CV tips to help you Get that Job
Editor

Related Posts

Unemployment – South Africa’s Ticking Time-bomb

May 18, 2018

BEE – What you need to know

May 13, 2018

5 things many Start Up Entrepreneurs get wrong.

September 14, 2017

5 Essential Skills to Help you Sell More

September 8, 2017
Our Picks

How Do I Calculate My Tax

May 21, 2021

Momentum Health Increases 2022

October 28, 2021

How am I able to be Tax Compliant?

May 23, 2021

Who may and how do you apply for business rescue?

May 31, 2021

Subscribe to Updates

Get the financial tips, offers and more

Don't Miss
About Us
About Us

Money 101 is your source of Personal, Financial, Business and Lifestyle educational articles which is brought to you by Adarna.

Visit Adarna: Adarna.co.za
Privacy Policy: Click to View

Our Picks

Retirement Annuities Explained

June 7, 2021

How am I able to be Tax Compliant?

May 23, 2021

Who may and how do you apply for business rescue?

May 31, 2021
© 2025 Brought to you by Adarna.

Type above and press Enter to search. Press Esc to cancel.