Meta results are less about techlash and more about headroom | WARC | The Feed
Daily effectiveness insights, curated by WARC's editors.
You didn’t return any results. Please clear your filters.
Meta results are less about techlash and more about headroom
Meta, the company formerly known as Facebook, posted results that showed slowing ad revenue growth and a dip in daily users from its big blue app; the numbers are staggering, but it also shows why the firm should now diversify.
Why it matters
The numbers are colossal: 2.9 billion use Facebook every month. While daily users of the big blue app have dipped, with pressure blamed on TikTok. Ad revenue is slowing, too, with that pressure blamed on Apple.
But Facebook is also relatively uncommon among big tech in that it is, as Bloomberg observes, dependent on advertising for 98% of revenues. This has not only left it vulnerable to device makers but increasingly dependent on bringing onboard ever harder to reach non-internet users.
This is now the trouble with Meta, whose metaverse is unlikely to replace its core platform revenues anytime soon.
- While the scale of the Wall Street sell-off is dramatic – to the tune of $220 billion – it’s probably because the financial markets had begun to convince themselves that Facebook’s growth really was limitless. There had been, after all, no financial backlash from CEO and all-powerful leader of Meta, Mark Zuckerberg’s congressional appearances, whistleblowers, boycotts.
- Rather, it’s facing two things. In attempting to make Facebook (the app) ubiquitous, it has ceased to be cool. This is especially true in North America, which remains its highest ARPU region, even though it has mostly plateaued since 2018.
- Second, it’s chasing TikTok in a growth game that Facebook had set the terms of. Except TikTok has a huge amount of room to grow.
- The next phase of growth, if it does indeed lie in the metaverse, is going to be far tougher. Hardware is key, manufacturing and distribution become headaches. It’s a new world for the company.
Sourced from WARC, Bloomberg
Email this content