Facebook warns that ad business has been ‘adversely affected’ during pandemic

The post was attributed to Alex Schultz, VP of analytics, and Jay Parikh, VP of engineering.

Last week, Facebook CEO Mark Zuckerberg informed the public that a growing number of users are taxing its systems as more people stay home and communicate online. That means more people are using Facebook Messenger to talk with friends and family; more people are spending time in Facebook Groups, which are the niche communities based on shared interests; and more entities are using video to share Stories and livestreams. However, some of these digital spaces are not as conducive to Facebook advertising as the traditional News Feed. There are no ads in Facebook Groups, for instance.

“In many of the countries hit hardest by the virus, total messaging has increased more than 50 percent over the last month,” Facebook said in its post. “Similarly, in places hit hardest by the virus, voice and video calling have more than doubled on Messenger and WhatsApp.”

Facebook’s advisory follows Twitter’s public pronouncement on Monday, when the media and messaging service said advertising was negatively impacted by coronavirus. Twitter, too, was handling an influx of users.

Both companies are set to report their first-quarter results in the coming weeks, which will provide a more complete picture of how the internet advertising industry has been affected by coronavirus. There have already been signs of a slowdown, with industries including travel, hotels, airlines and others having to pull back on marketing while people remain at home.

The hard times are expected to continue. On Tuesday, the International Olympic Committee announced that the Tokyo games would be postponed until 2021. The Olympics are not just major advertising events for NBC, which broadcasts the games in the U.S., they are a big-money opportunity for digital platforms.

Meanwhile, Facebook’s immediate concern is keeping its internet connection online. Facebook said it will temper video streaming to handle the increased demand, similar to YouTube, Netflix and Amazon, which have all adjusted their streaming rates in places.

“We’re monitoring usage patterns carefully, making our systems more efficient, and adding capacity as required,” Facebook said. “To help alleviate potential network congestion, we are temporarily reducing bit rates for videos on Facebook and Instagram in certain regions.”

Related posts