Facebook: Facebooks’ ads revenue declines despite increased users online. Read ahead to know more.
The Company’s Initial Projection (Facebook)
Facebook has seen a rise of more than 50% of users to date due to the pandemic. Furthermore, the frequency of messages increased by 50% on Facebook. This is because people are staying at home due to coronavirus outbreak.
Furthermore, the World Health Organisation and other government bodies throughout the world are using FB to reach people with the coronavirus information. As a result, the website in mention has established a very big customer base to date.
Therefore it was projected that the digital ad revenue sales would increase with an increase in the number of customers.
What The Actual Situation Is
In present, rather then gaining ads revenue, Facebook is losing revenue from digital ads. Furthermore, both tech giants Google and latter can lose $44 Billion in revenue this year. However, they will remain profitable since they are well established.
The app’s ad revenue stands at 67.8 billion dollars this year after hitting a massive 15.8 billion dollar loss. Moreover, it is believed that both Google and Facebook might incur double-digit losses in this year ahead.
As a result, the estimated operating income of Google stands at 54.3 billion dollars at the end of this year. FB’s operating income stands at 33.7 billion dollars at the end of 2020. The coronavirus outbreak is affecting other new online digital marketing companies as well.
What To Expect In The Future (Facebook)
Both Google and Facebook have huge cash reserves. Furthermore, both the companies will stay profitable next year as well despite the losses being incurred this year. Furthermore, in 2021, FB’s advertising business should grow by 23%.
As a result, it should earn 83 Billion dollars in revenue next year. Furthermore, the company is well prepared to overcome any loses. Also, the latter will continue to run its online ads and improve the business as much it can this year amidst the coronavirus outbreak.
However, other small digital marketing will require massive funds resources to cope up with the losses.