iWorld

Facebook’s Asia-Pacific numbers lesser impacted than other regions in pandemic quarter

Advertisement contributes to more than 98 per cent to overall revenues.

https://www.indiantelevision.com/sites/default/files/styles/smartcrop_800x800/public/images/tv-images/2020/05/04/mark.jpg?itok=VET657Wg

BENGALURU: As people across most of the globe retreated indoors under the lockdown announced by most of the countries to reduce the growth rate of Covid2019, world economies were badly hit. Officegoers had no other option but to use media to keep themselves occupied as the amount of work-to-do shrank. With the closure of education institutions, theaters and malls and hotels, etc., misplaced suspicion about the safety of newsprint, no new television/film content being produced, news and movies on television, OTT, internet, social media, became the new tools for entertainment and information, for networking and socialising distantly, education, occupying minds, etc.  

Social media networking major Facebook or FB reported its numbers for the first quarter ended 31 March 2020 (Q1 2020, quarter or period under review). Facebook reported 15.87 per cent lower Q-o-Q numbers for the quarter under review as compared to the previous quarter (quarter ended 31 December 2019, Q4 2019), but 17.64 per cent higher Y-o-Y than the year ago quarter Q1 2019. FB has witnessed Q-o-Q revenue declines in the first quarter earlier – in Q1 2018, revenue declined 7.76 per cent as compared to Q4 2018 and in Q1 2019 it declined 10.86 per cent as compared to Q4 2018. Overall, Facebook numbers have shown an increasing trend, the Covid2019 quarter is just a slightly bigger than the normal bump in its path to growth.

FB reports revenues from four major geographical regions in the world – the largest in terms of revenue being the US-Canada region, followed by Europe, Asia-Pacific (A-Pac) and the Rest of the World or RoW. The US-Canada region contributes about 48 per cent, the Europe region about 24 per cent, APAC region about 18 per cent and RoW about 10 per cent to FB’s revenues. Please refer to the figure below for FB revenue breakup.

Advertisement is the major revenue stream for FB that contributes to more than 98 per cent to its overall revenues. The figure below shows contribution in terms of percentage of ad revenue to total ad revenue from these geographical regions. As is obvious, the APAC region is the only one that has shown growth in contribution to FB’s ad revenues during Q1 2020 – It contributed 17.56 per cent to FB’s ad revenues in the previous quarter and its contribution to ad revenue increased to 18.56 per cent  in Q1 2020. As a matter of fact, the APAC region has shown only two downward blips in its contribution to ad revenue during 9 quarters (the quarter under review and its preceding 8 quarters). These two blips happened in Q1 2020 and Q4 2018.

Growth in contribution to revenue from the APAC region has generally been steadier than the other regions. When FB’s revenues have declined Q-o-Q, the decline in revenues from the APACregion has been lower than the other regions during these nine quarters. The APACregion’s total revenue declined 11.13 per cent Q-o-Q in Q1 2020 as compared to declines of 16.45 percent, 17.54 per cent and 17.21 per cent from US-Canada, Europe and RoW regions respectively. Y-o-Y, revenues grew 17.16 percent, 16.55 percent, 21.44 per cent and 15.80 per cent in Q1 2020 from FB’s US-Canada, Europe, APAC and RoW regions, respectively.

Facebook’s Daily Active Users or DAU grew 4.65 per cent in Q1 2020 to 1.734 billion as compared to 1.657 billion in Q4 2019. The APAC region has a major chunk of humanity, consequently, the company’s largest DAU are from the APACregion, and the number of these APACusers in Q1 2020 has grown 5.77 per cent Q-o-Q. Comparatively, the US-Canada, Europe and RoW regions have seen DAU growth in the quarter under review versus the immediate trailing quarter of 2.63 percent, 3.74 per cent and 4.51 per cent respectively. Please refer to the figure below:

The US-Canada region has the least DAU  among the four FB regions, however, this region has FB’s highest ARPU or average revenue per person, as well as the highest Family Average Revenue Per Peson or ARPP. Facebook defines a monthly active person (MAP) as a registered and logged-in user of Facebook, Instagram, Messenger, and/or WhatsApp (collectively, FB’s "Family" of products) who visited at least one of
these Family products through a mobile device application or using a web or mobile browser in the last 30 days as of the date of measurement. 

With drop in revenue, Facebook’s ARPU in Q1 2020 dropped 12.89 per cent Q-o-Q world wide. Q-o-Q FB’s APAC region ARPU declined 6.08 percent. ARPU drops of 13.6 per cent by US-Canada, 13.02 per cent by Europe and 10.43 per cent by RoW also happened in the quarter under review. Please refer to the figure below:

Excerpts on what the company has to say

"Our work has always been about helping you stay connected with the people you care about," said FB founder and CEO Mark Zuckerberg, "With people relying on our services more than ever, we're focused on keeping people safe, informed and connected."

Impact of Covid2019 on Outlook

On Revenue: Our business has been impacted by the Covid2019 pandemic and, like all companies, we are facing a period of unprecedented uncertainty in our business outlook. We expect our business performance will be impacted by issues beyond our control, including the duration and efficacy of shelter-in-place orders, the effectiveness of economic stimuli around the world, and the fluctuations of currencies relative to the U.S. dollar.

After the initial steep decrease in advertising revenue in March, we have seen signs of stability reflected in the first three weeks of April, where advertising revenue has been approximately flat compared to the same period a year ago, down from the 17 per cent year-over-year growth in the first quarter of 2020. The April trends reflect weakness across all of our user geographies as most of our major countries have had some sort of shelter-in-place guidelines in effect.

On Expenses:We expect to realize operational expense savings in certain areas such as travel, events, and marketing as well as from slower headcount growth in our business functions. However, we plan to continue to invest in product development and to recruit technical talent. In addition, we have committed over $300 million to date in investments to help our broader community during the crisis, which will have an impact on our financial performance this year. As a result, we expect total expenses in 2020 to be between $52-56 billion, down from the prior range of $54-59 billion. While this reflects a moderate reduction in the planned growth rate of total expenses, our overall expense growth in the face of expected revenue weakness will have a negative impact on 2020 operating margins.

On Capex: Our significant investments in infrastructure over the past four years have served us well during this period of high user engagement. We plan to continue to grow our capex investments to enhance and expand our global infrastructure footprint over the long term. In 2020, we expect capital expenditures to be approximately $14-16 billion, down from the prior range of $17-19 billion. This reduction reflects a significant decrease in our construction efforts globally related to shelter-in-place orders. Given the strong engagement growth and related demands on our infrastructure, this year's capex reduction should be viewed as a deferral into 2021 rather than savings.
 

Latest Reads

https://www.indiantelevision.com/sites/default/files/styles/340x340/public/images/tv-images/2020/10/23/eros.jpg?itok=100GnU2Y
ErosNow gets into a mess with provocative social media posts

These are sensitive times. Brands and influencers have to tread carefully, almost as if they are walking on egg shells. Streaming service Eros Now learnt it the hard way over the past couple of days.

iWorld Over The Top Services
https://www.indiantelevision.com/sites/default/files/styles/340x340/public/images/tv-images/2020/10/22/paul.jpg?itok=3i-HPdL5
Synamedia appoints Paul Segre as CEO to spearhead next growth phase

MUMBAI: Video software provider Synamedia has brought in Paul Segre as CEO, with immediate effect. Segre takes over from departing CEO Yves Padrines, who has overseen the company since its inception in 2018.

iWorld Over The Top Services
https://www.indiantelevision.com/sites/default/files/styles/340x340/public/images/tv-images/2020/10/22/watcho.jpg?itok=3pUPViZI
Watcho launches interactive Quiz contest ‘Watcho Aur Jeeto’ for its subscribers

Committed to delivering an innovative and engaging content experience to its users, Watcho, Dish TV India’s OTT platform has announced the launch of ‘Watcho Aur Jeeto‘- an engaging quiz contest. The contest will be running daily with additional bonanza offers on weekends. Each quiz will have a...

iWorld Over The Top Services
https://www.indiantelevision.com/sites/default/files/styles/340x340/public/images/tv-images/2020/10/22/zee5_800_new_1.jpg?itok=yln0_PLz
Zee5 partners with Meghbela Broadband to strengthen ISP distribution

MUMBAI: The Covid2019 pandemic has changed consumers’ viewing habits, with a lot of people migrating to the OTT space for at-home entertainment in the last few months. Zee5 has seen over 3X growth in its consumer base and it is now looking to expand beyond the traditional DTH and Cable TV. To this...

iWorld Over The Top Services
https://www.indiantelevision.com/sites/default/files/styles/340x340/public/images/tv-images/2020/10/22/mirza.jpg?itok=JM9a1hke
Brands leverage Amazon Prime's Mirzapur 2

Amazon Prime Video’s Mirzapur is hot property right now. Fans are eagerly looking forward to the gritty crime-thriller’s second season, which drops on October 23.

iWorld Over The Top Services
https://www.indiantelevision.com/sites/default/files/styles/340x340/public/images/tv-images/2020/10/21/net_0.jpg?itok=D79hQsJX
Netflix plans to give free access for a weekend in India

KOLKATA: Netflix has been constantly innovating its marketing and promotion strategy in India to get more users to sign up. Now, it plans to give free access to the Indian audience for a weekend. “We think that giving everyone in a country to access Netflix for free for a weekend could be a great...

iWorld Over The Top Services
https://www.indiantelevision.com/sites/default/files/styles/340x340/public/images/tv-images/2020/10/21/net.jpg?itok=XTrDh5Mi
Netflix Q3 result: Continues to grow strong in APAC, much work to do in India

Netflix fell short of global subscriber additions in Q3, albeit a slower growth was forecasted by the streaming giant. The company has added 2.2 million net subscribers in the quarter, even lower than its prediction of 2.5 million.

iWorld Over The Top Services
https://www.indiantelevision.com/sites/default/files/styles/340x340/public/images/tv-images/2020/10/20/mx.jpg?itok=ePhLYsJf
MX TakaTak launches Fame House for top Indian influencers to create and collaborate

KOLKATA: Short video app MX TakaTak is the new home for content creators across the country, with over 6 million digital influencers, and counting, under its umbrella. In order to nurture and give a platform to these talented digital enthusiasts, MX TakaTak has announced the first edition of MX...

iWorld Over The Top Services
https://www.indiantelevision.com/sites/default/files/styles/340x340/public/images/tv-images/2020/10/20/pockr.jpg?itok=MEsGxhkQ
Pocket Aces partners up with Tinder & Pure Me for Firsts Season 3

MUMBAI: Pocket Aces is back with a new season of the hit Instagram series, Firsts. Presented by Tinder and PureMe, Firsts Season 3 explores a same-sex romantic relationship between two young women, who match on the dating app and experience an exhilarating journey of understanding love, life, and...

iWorld Over The Top Services

Sign up for our Newsletter

subscribe for latest stories

* indicates required