Facebook’s active users in North America declined last quarter and the company expects the trend to extend to other regions in the future as COVID-19 stay at home orders lift.
The tech giant also expects more ad targeting and measurement “headwinds” in 2021 as Apple readies its new anti tracking privacy feature.
In Q3 results released on Friday Facebook announced a 22 per cent increase in revenue compared to the same period last year, as more businesses came online in the pandemic and poured ad money into the social media giant.
Facebook reported 2.74 billion monthly active users globally in the quarter, an increase in 12 per cent year on year. But its core North American market slowed down and the company expects other markets to follow.
“As expected, in the third quarter of 2020, we saw Facebook [daily active users] and [monthly active users] in the US & Canada decline slightly from the second quarter 2020 levels which were elevated due to the impact of the COVID-19 pandemic,” Facebook CFO David Wehner said in a company statement.
“In the fourth quarter of 2020, we expect this trend to continue and that the number of DAUs and MAUs in the US & Canada will be flat or slightly down compared to the third quarter of 2020.”
The tech giant warned investors it will “face a significant amount of uncertainty” in 2021.
Facebook warned the COVID-19 spurred ecommerce boom – and subsequent ad dollars to Facebook – could cool off, representing one of several ad revenue headwinds flagged in the results.
The others relate to privacy and regulation. Facebook is anticipating Apple’s upcoming privacy feature, which turns off advertising ID tracking by default and requires Apple device users to explicitly opt in to it to work, will hurt its ad revenue.
Advertising industry groups which represent Facebook are currently seeking to delay Apple’s privacy feature with complaints to the French competition regulator.
An “evolving regulatory landscape” was also flagged by the tech giant, including the current battle over transatlantic data transfers.