Meta has announced that its ad spend has ‘softened’ at the beginning of this fourth quarter, following the outbreak of the Israel-Hamas war.
The Facebook and Instagram parent company has said it has now adjusted its financial outlook for coming quarter, citing softer ad demand and increased volatility in the past few weeks,
Speaking to investors during the tech giant’s earning release, Meta chief financial officer Susan Li mentioned the effect the war had on revenue expectations:
“While we don’t have material direct revenue exposure to Israel and the Middle East, we have observed softer ad spend in the beginning of the fourth quarter,” she said.
Explaining the wide range of Meta’s adjusted Q4 guidance – revenue of between £30.1 to £33 billion ($36.5 to $40 billion) – Li added that the new prediction has been altered “in part” to “capture that uncertainty”.
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“It’s hard for us to attribute demand softness directly to any specific geopolitical event. Historically, we have seen broader demand softness follow other regional conflicts in the past, such as in the Ukraine war.”
Yet that despite the uncertainty fuelled by world events, the outlook for the quarter still shows growth, with a 13% to 24% increase compared to the same period the previous year.
The announcement also follows in the wake of Meta announcing its most profitable quarter in years, soaring past analyst expectations.
Reporting a third-quarter revenue of £28.2 billion ($34.15 billion), the growth beat the expectation of £27.7 billion ($33.56 billion), a jump of 23% year-over-year.
Meta reported that despite challenges such as user migration to rival platforms like TikTok and privacy changes introduced by Apple in 2021, which limit data collection, advertising remains a significant driver of revenue for Meta.