FB CFO during the earnings call today told the change affects 10 billion dollars in revenue. FB yearly revenue is approximately 120 billion dollars. So this is literally just 8%, which means 92% of revenue is not affected by this change. Why people acting as if revenue went to 0$?
Because that’s must the projection now. It could be worse as more people opt into these privacy restrictions. Also Apple could move to an even more restrictive policy in the future. It highlights their dependency on the platform. What happens if Google moves to do the same? This is why FRL might be a money pit but if they own the hardware/OS of the next generation device they’ll be in a much better place.
But it can only get better from here right given that they must have everyone working on it.
In the sense that they now have a clear problem to solve (how to model/estimate conversions if they can’t get actual data) and they can optimize their way to claw back the lost revenue, it should get better. However, ads are a two sided marketplace. Who knows how the advertiser base will react in the long run? They could choose to move their Ad budgets to different platforms and that will take a while to get back.
Brand vs performance media. Holiday ad dollars follow return on ad spend. Doesn't bode well if an 8% drop came during a period of time when FB should be helping advertisers hit their holiday goals. That growth AND guidance are weaker, AND eyeballs are moving to less mature (less monetized) feature eg Reels suggests it's being felt by clients and brand dollars can't recoup evergreen media.
10 billion dollars is still 10 billion dollars
It is a double edge sword. Top line $10B lost and same $10B extra expenditure on bottom line for metaverse. Assuming 50% profit of $120B was 60B. Now removing, 20B will bring net profit down by 33%. There goes your math.
Why Google isn’t enforcing the same as Apple did to fuckerberg’s shit app?
CFO will always play down the effect. In reality it will be much more