Facebook expects significant drop in ad revenue due to Apple’s ATT

Social media giant Facebook’s first-quarter earnings report exceeded expectations in terms of both quarterly revenue and profit. However the company said it expects a significant drop in its ad business which was the biggest source of revenue in the first quarter, as Apple’s App Tracking Transparency framework comes into effect this week.

The company saw a 48% growth in total revenue and 46% in ad revenue largely thanks to higher ad prices and the upward trend in digital ad spending as people are shopping online more than ever to meet their needs without having to leave their homes. Facebook Founder and CEO Mark Zuckerberg said they’re planning to build a full-featured e-commerce platform.

We have a long way to go to build out a full-featured commerce platform… but I am very committed to getting there,” said Zuckerberg on a conference call. 

The company’s total revenue reached $26.17 billion and its ad revenue hit $25.439 billion in the first quarter of 2021 ended March 31. 

Image Source <a href=httpsinvestorfbcominvestor newspress release details2021Facebook Reports First Quarter 2021 Resultsdefaultaspx target= blank rel=noreferrer noopener nofollow>Facebook Investor Relations<a>

Also Read: Facebook Revenue and Usage Statistics

Even though the company exceeded expectations, it said its ad revenue could ‘significantly’ fall due to Apple’s App Tracking Transparency framework which will make it much more difficult for app developers and advertisers to track user data. The company added that the ad revenue could start recovering in the third and fourth quarter. 

The iPhone-maker held a special event last week and introduced its latest product updates including the latest iOS 14.5 update which has brought along the enforcement of the ATT framework. 

Also Read: Everything to Know About Apple’s iOS 14.5 Update

In addition, Zuckerberg said that the main areas that Facebook plans to advance in are augmented & virtual reality, e-commerce features and monetization features to enable creators to make money on Facebook products. 

On Tuesday, Zuckerberg announced that the company will build new tools to let IG creators earn money from product recommendations, a marketplace to connect influencers with brands and Creator Shops where users will be able to sell their items directly through their pages. 

Written by Sophie Blake


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