Facebook: Advertisers won’t leave after Cambridge scandal

Facebook said in announcing its quarterly earnings that it sees no trend for advertisers to leave the platform after the Cambridge Analytica scandal. In addition, the number of daily active users is increasing, along with revenue.

Facebook’s chief operating officer, Sheryl Sandberg, said during a call on Q1 this year that in the early days after the scandal, “a handful of advertisers” said they would temporarily stop advertising on the platform. One of them would have already returned. “And we haven’t seen a meaningful trend or much more since then.” In the days following the scandal, some organizations said they would stop advertising on Facebook, including Mozilla.

There were also questions about the impact of the European GDPR privacy legislation on Facebook’s advertising revenue. Chief financial officer David Wehner said: “I don’t know if there’s really a doomsday scenario at this point. I think we think it depends on how people react to the controls and the ad settings whether there are any restrictions. We believe they will be relatively minor. Depending on how broadly the controls are used and set up, there are potential targeting implications for our advertisers.” He further states that less targeted targeting can have an influence on the price that Facebook can charge for impressions over time.

Facebook also released its growth figures, which show the number of daily and monthly active users growing, both by about 13 percent from the previous year. The latter number is now almost 2.2 billion, of which 377 million in Europe. Speaking about the numbers, CEO Mark Zuckerberg said he thinks the number of daily and monthly active European users will level off or decline in Q2 as a result of the GDPR.

Facebook’s revenue also increased compared to the first quarter of 2017 and amounted to 11.97 billion dollars, or about 9.82 billion euros. The possible effects of the Cambridge scandal are not reflected in these quarterly figures because it took place towards the end of the first quarter. Facebook’s net profit was $4.99 billion.