Meta, the company formerly known as Facebook, has released its financial results for the first quarter of 2022 and while there are a few wins, there are a number of losses as well.
Starting with the wins, daily active people across the Meta family of apps amounts to 2.87 billion on average as of March 2022. This represents a 6 percent increase compared to the same quarter in 2021.
However, the majority of those users appears to come from Facebook which reports 1.96 billion daily active users. While Meta uses “people” and “users” it appears that these are just used interchangeably as the C-Suite refers to users rather than people.
For advertisers, this is great news with ad impressions across the Meta family of apps increasing 15 percent year-on-year and the average price of advertising falling by 8 percent year-on-year.
“Impression growth was driven primarily by Asia-Pacific and Rest of World. The year-over-year decline in pricing was driven primarily by the ongoing mix shift in ad impressions towards regions and surfaces that monetize at lower rates,” explained chief financial officer at Meta, Dave Wehner.
Unfortunately, that’s where the good news ends.
Net income for the quarter clocked in at $7.4 billion compared to $9.4 billion in 2021, representing a 21 percent decrease.
Now, while Meta has been struggling to make gains since the pandemic – it even states as much in its earnings call – it also points to the situation in Europe as a reason for this slowed growth.
“Prior to the war in Ukraine, we faced expected headwinds related to the continued slowdown in our online commerce vertical which had grown quickly during the COVID-19 pandemic as well as ongoing targeting and measurement challenges impacting advertising spend,” said Wehner.
“We experienced a further deceleration in growth following the start of the Ukraine war due to the loss of revenue in Russia as well as a reduction in advertising demand both within Europe and outside the region. We believe the war introduced further volatility into an already uncertain macroeconomic landscape for advertisers,” the CFO added.
Of course Meta stopped serving and accepting advertising from Russia, but Wehner said in a follow up earnings call that Russian advertisers accounted for 1.5 percent of revenue in 2021. Yes, advertising in the rest of Europe reportedly slowed as well but by Meta’s own account, growth in Europe has been slow for some time now.
The outlook for the next quarter then isn’t blowing our hair back, but perhaps it’s time to consider whether social media has plateaued with user growth now barely hitting the single digits.
There is always the Metaverse for Meta to leverage for new ways of advertising. It just need to, you know, build it.
