Facebook expects to face more significant ad targeting headwinds in 2021

“We had a strong end to the year as people and businesses continued to use our services during these challenging times,” said Mark Zuckerberg, Founder and CEO, Facebook, during the presentation of the social media giant’s financial results for the quarter and full year ended December 31, 2020. Adding further, he said, “I’m excited about our product roadmap for 2021 as we build new and meaningful ways to create economic opportunity, build community and help people just have fun.”

Facebook’s monthly active user (MAU) base was up 12 per cent y-o-y at 2.80 billion as of December 31, 2020, while daily active user (DAUs) base was up 11 per cent y-o-y at 1.84 billion on an average.

Earnings in the October-December quarter stood at $11.22 billion, or $3.88 per share. Revenue grew 22% to $28.07 billion.

At the same time, the CFO outlook commentary stated, “We continue to face significant uncertainty as we manage through a number of cross currents in 2021.”

The outlook commentary further stated that Facebook also expects to face more significant ad targeting headwinds in 2021. “This includes the impact of platform changes, notably iOS 14, as well as the evolving regulatory landscape. While the timing of the iOS 14 changes remains uncertain, we would expect to see an impact beginning late in the first quarter,” the commentary added.

There is also continuing uncertainty around the viability of transatlantic data transfers in light of recent European regulatory developments, and like other companies in this industry, Facebook is closely monitoring the potential impact on its European operations as these developments progress.

“We expect 2021 total expenses to be in the range of $68-73 billion, unchanged from our prior outlook. This is driven by investments in technical and product talent as well as continued growth in infrastructure costs. We continue to expect 2021 capital expenditures to be in the range of $21-23 billion, driven by data centers, servers, network infrastructure, and office facilities. Our outlook includes spend that was delayed from 2020 due to the impact of the pandemic on our construction efforts,” the CFO commentary added.

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