Facebook reported strong ad revenue growth in Q2, Instagram ads continue to drive impression growth
Ad revenue increased by 28% year-over-year with the strongest growth from North America and Asia-Pacific regions.
Facebook earned $16.6 billion in ad revenue for the second quarter of 2019, a 28% increase year-over-year. Facebook CFO David Wehner said the strongest ad growth on a regional basis belonged to North American and Asia-Pacific, both up 30%.
The company’s total revenue for the quarter was 16.9 billion. More than three times what the company has to pay as part of its settlement with the FTC over privacy violations.
Ad prices down, impressions up. Wehner reported that the average price per ad across Facebook’s services decreased 4% during the second quarter, while ad impressions served were up 33%.
“Similar to last quarter, impression growth was primarily driven by ads on Instagram Stories, Instagram Feed, and Facebook News Feed. The year-over-year decline in average price per ad reflects an ongoing mix shift twoards Stories ads and geographies that monetize at lower rates,” said Wehner.
Ninety-four percent ($15.6 billion) of Facebook’s ad revenue came from mobile ads.
DAU growth remains flat. Facebook’s daily active users (DAUs) saw another quarter of single-digit year-over-year growth at 8%, with 1.58 billion DAUs during the second quarter. Wehner said lifts in daily activity was led by growth in India, Indonesia and the Philippines.
Monthly active user (MAUs) rates also saw an 8% growth rate, with 2.41 billion MAUs on average during the quarter. Across its family of apps (Facebook, Instagram, Messenger
Regulatory impact on Facebook. Earlier this month, Facebook received a $5 billion fine from the FTC as part of a larger settlement around privacy violations going back to a 2012 consent decree requiring the company to better protect user privacy. The company must also pay the SEC $100 million.
“These efforts will require significant investments in compliance processes, personnel, and technical infrastructure,” said Wehner regarding steps need to comply with the FTC agreement, “In addition, these efforts will make some of our existing product development processes more difficult,
And it continues to face ongoing investigations, as the company noted, “In June 2019, we were informed by the FTC that it had opened an
Why we should care. In spite of Facebook’s comments about having to slow down on product development processes, the company is still connecting advertisers to their audiences — driving ad revenue forward and designing new ways to bring e-commerce to its platforms.
“When I look at the kinds of private interactions we can make easier, payments may be the most important for the long term,” said CEO Mark Zuckerberg, “In the future, we’ll enable people to use the same payments account to send money to friends and businesses on WhatsApp, shop on Instagram, or make transactions on Facebook.”
Zuckerberg said being able to send money via its family of apps will be as easy as sending a photo, opening up new opportunities for businesses.