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Meta ad sales plummet: how it could affect Facebook

Meta reported in February this year that Facebook’s active users were down last year, with the figure representing 1.929 million in the last quarter of 2021, compared to 1.93 billion in the previous quarter.

Meta, parent company of Facebook and Instagram WhatsApp, Messenger and Oculus, announced that its net profits between January and September represented $18,547 million dollars, this figure is considered a 36% drop compared to the same period of the previous year.

In the first nine months of the year, Meta entered $84,444 million dollars, practically the same turnover as in the equivalent period of 2021, while its operating expenses skyrocketed, which explains the drop in profits.

Between January and September, investors in the company founded by Mark Zuckerberg only managed to earn $6.86 per share, down from $10.27 in the same period last year.

The increase in expenses was led by investment in research and development, an item to which the company spent nearly $8 billion more than in the first nine months of 2021.

The firm indicated that they also had expenses related to marketing, sales and administrative costs. The bad streak of the company is not new, since for two years they have gradually been losing followers, especially on Facebook.

Although Mark Zuckerberg’s company did not say if these negative numbers have to do with the drop in the number of daily active users, in February of this year, they acknowledged that it fell to 1,929 million in the last quarter of 2021, compared to 1,930 million from the previous quarter.

After what happened in February, the value of Meta’s shares plummeted almost 27% on the New York Stock Exchange. What happened represented the biggest drop in a single day, which according to financial experts was the biggest drop ever experienced by a company in the United States.

The revenue forecast for the next three months will be between $30,000 and $32,500 million dollars, figures that suggest that Meta expects the drop in internet advertising demand to persist and even intensify.

Last September, 2.93 billion people connected to one of Meta’s apps daily, representing more than a third of humanity, while 3.71 billion did so at least once a month.

Both numbers represent a 4% year-on-year user growth for the company led by Mark Zuckerberg.

Rachel Maga
Rachel Maga is a technology journalist currently working at Globe Live Media agency. She has been in the Technology Journalism field for over 5 years now. Her life's biggest milestone is the inside tour of Tesla Industries, which was gifted to her by the legend Elon Musk himself.