Facebook sees ‘signs of stability’ in ad spending

san francisco/bengaluru — Facebook beat analysts’ estimates for quarterly revenue on Wednesday and said it has seen “signs of stability” for sales in April after a plunge in March, in yet another signal that tech giants may weather the coronavirus-induced economic collapse better than other sectors.

The announcement came a day after Alphabet’s Google said a drop in its online ad sales similarly steadied in April. Shares of Facebook,

the world’s biggest social network and the owner of WhatsApp and Instagram, soared 9 per cent in extended trading. Facebook said advertising revenue was roughly flat in the first three weeks of April compared with the same period last year, a tentative early sign of recovery following a “steep decrease” in revenue in March as lockdowns took effect worldwide to slow the spread of the virus.

Revenue growth was 18 per cent in the first quarter, Facebook’s slowest ever by a wide margin, although it beat analysts’ expectations for growth of 16 per cent, according to data from Refinitiv. Ad sales, which make up nearly all of Facebook’s revenue, rose 17 per cent to $17.44 billion.

Some businesses took advantage of bargain pricing to run a heavier volume of ads after the pandemic wiped out Facebook ad pricing over the course of the quarter, contributing to a 39 per cent increase in total ad impressions, executives said.

Chief operating officer Sheryl

Sandberg told analysts the company saw an increase in gaming ads and steady spending from technology and e-commerce players, which offset “significant declines” in ads from the hard-hit travel and auto sectors.

Even so, analysts have a gloomy outlook for Facebook’s second quarter, with advertisers across industries slashing marketing budgets in response to virus-related uncertainty, including many of the small businesses and direct-to-consumer brands that market themselves heavily on Facebook. —