Coronavirus has posed a severe economic threat by slowing down the pace of businesses across different channels. Facebook is also bearing the brunt of the global pandemic crisis wherein its business has massively slowed down. The Social Media Giant said that its market is adversely affected by the current scenario, and its ad business is weakening lately.
Facebook Ad’s Business Facing challenges due to coronavirus outbreak
Facebook acknowledged that the revenue of the company is hurt as the companies are providing an overview to the investors about the potential impact on their businesses. The Tech Giant revealed that the revenue is affected; however, it did not provide exact statistics of how much effect is there. The COO of the Company, Sheryl Sandburg said last month that the marketing industry is undoubtedly going to see a real impact.
The global pandemic causes a surge in the use of communication services
As the worldwide epidemic continues to impact the communities across the world, businesses have slowed down. Most of the countries are under lockdown, wherein the various social media platforms within Facebook are used extensively as people try to stay connected with each other. There is a rise of almost 50 percent in the usage of WhatsApp, Messenger, and video calling services; however, the use of aid services like Facebook Ads has gone down tremendously.
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Facebook Said it doesn’t Monetize Communication Services
Facebook said that it has never tried to monetize its connectivity services like WhatsApp and Messenger.
Facebook Executives Alex Schultz and Jay Parikh said in a lengthy blog post,
“We don’t monetize many of the services where we see increased engagement, and we’ve seen a weakening in our ads business in countries taking aggressive actions to reduce the spread of COVID-19.”
The business being adversely affected
“At the same time, our business is being adversely affected like so many others around the world. ” read the post.
Facebook said that the communication services of the comp might are crucial at these times, and it is striving hard to maintain them so that the users can have reliable and stable communications with their loved ones.
Maintaining the platforms challenging right now
The challenge is to preserve things as employees are also working remotely and have no access to the high-end onsite resources. The load on the communication-based services is on an all-time high for Facebook, and the company is thriving hard to maintain seamless services to its billions of users.
The slowdown in the Advertisers as Businesses cut the cost
Facebook said that digital ads are immune to such a downturn; however, in the wake of Covid-19, there is a decline in the Facebook advertiser income.
“At $70 [billion], [Facebook] was 50% of global display ad revenue in 2019, so cutting FB ads is the fastest way to cut costs for its clients,” “FB had 7 [million], active advertisers, in 2019, suggesting that many are small and may have to eliminate ad spending to survive”.