Last week Facebook announced a blow-out quarter, raking in a whopping $7.01B in revenue. Facebook now has an incredible 1.66 billion monthly active users (or roughly 21% of the Earth’s population… every month).
To some, Facebook’s soaring earnings came as a surprise. It was only two quarters ago that some analysts were pointing to the dark clouds of adblocking growth and predicting a near-term slowdown. For Facebook and other ad-revenue dependent companies, ad-blockers pose a potentially existential threat. So why didn’t Facebook’s revenue hit the skids?
Answer: Facebook fought back.
Facebook weighed several solutions and ultimately opted for a solution that serves ads “past” adblockers. Facebook’s ads are almost impossible to differentiate from the rest of its page-content, making the job of detecting and blocking advertisements extremely difficult — although not impossible. Out of the gate, Adblock Plus fired back a successful salvo and temporarily resumed blocking ads, but Facebook corrected the issue and to-date, Facebook is successfully serving ads past Adblock Plus.
On last week’s earning’s call, Facebook announced it’s quarterly ad revenue had grown an impressive 18% year-over-year vs. just 9% on previous quarters. It’s quarterly revenue is now $1.1 billion. In short, Facebook destroyed analysts’ estimates. Mission accomplished. For those who worry that fighting back against adblockers may have negative revenue consequences, Facebook’s data would seem to say otherwise.
David Wehner, Facebook’s CEO attributed the soaring earnings largely to the company’s anti-adblock measures:
On ad blocking, in terms of the impact I would just point out that this quarter we had 18 percent year-over-year desktop revenue growth. If you look at recent quarters, it was about half of that growth rate on a year-over-year basis. So that increment, that acceleration in desktop revenue growth is largely due to our efforts on reducing the impact of ad blocking. So that’s what led to the acceleration of desktop revenue growth
There are some takeaways from Facebook’s approach that are worth noting. Facebook concerned itself with two common user complaints about digital advertising.
- Web ads are disruptive.
- Web ads slow down the browsing experience.
By serving lightweight HTML ads, Facebook not only was able to evade adblockers, but preserve a non-interruptive browsing experience.
So where to from here?
As we all know, the game continues. Will Adblock’s filters adapt to Facebook’s latest strategy? Probably.
But for now Facebook’s efforts to counter adblocking have certainly paid off.