Despite online ads slump from coronavirus, Facebook sales poised to hold steady

[April 29, 2020]  By Katie Paul

SAN FRANCISCO (Reuters) - Facebook Inc <FB.O> ad sales appear to have ticked up since late March, offering investors reason for optimism even as decimated advertising budgets from the coronavirus are expected to weigh heavily on first-quarter earnings, according to data from firms that track online ads.

Analysts on average expect Facebook on Wednesday to report 16.1% growth in first-quarter revenue, its lowest since the company went public in 2012, according to Refinitiv data.

The estimates were revised down by about $1 billion since January to reflect a plunge in demand for ads for travel, restaurants and other shuttered consumer services because of the global coronavirus pandemic.

But data from digital marketing agency Gupta Media indicates that the volume of ads shown on Facebook doubled late in the quarter as usage surged, even as prices declined by about half to $1.08 per thousand impressions at the end of March from $2.17 at the beginning.

That balance suggests Facebook's revenues held steady in March even as global markets cratered in response to the spread of the virus, said Gogi Gupta, whose agency tracks a global sample of more than 5 billion ad impressions on Facebook's core social network as well as Instagram, Messenger and Audience Network, which serves ads on other websites and apps.

Volumes continued to increase in early April, up 15% from the second half of March, while prices stabilized, Gupta said.

Gupta's thesis is supported by data from Socialbakers, another marketing firm, which shows that ad spending in East Asia has risen 12.7% since early March as the region's economies came back online.

A 3D-printed Facebook logo is seen placed on a keyboard in this illustration taken March 25, 2020. REUTERS/Dado Ruvic

A third firm, Pathmatics, said the top advertisers it tracks spent more on Facebook in recent weeks than at the start of the pandemic - $166 million in the second half of March, up from $114 million in the first half of February.

Much of that boost came from Walt Disney Co <DIS.N> alone, whose spending surged on Facebook in late March to about $50 million, the data showed.

All three data firms measure only a sliver of Facebook's total advertising, they cautioned. They also track big brands and do not account for the long tail of small businesses that comprise much of Facebook's 8 million-strong advertiser base, many of them buckling under the mass closures in response to the pandemic.

Still, the trend line looks positive for Facebook, putting it in step with other online ad players like Alphabet Inc's Google <GOOGL.O> and Snap Inc <SNAP.N>, which handily beat revenue estimates in early showings this earnings season.

Analysts expect Twitter Inc, <TWTR.N>, which reports on Thursday, to fare the worst of the bunch. They forecast a 1.4% year-over-year decline in revenue, given its reliance on ads for product launches and in-person events, many of which are canceled.

Twitter pulled its guidance for the quarter in late March.

(Reporting by Katie Paul; Editing by Greg Mitchell and Peter Cooney

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