Have you ever had one of those days?
Metaplatforms (GOAL) it apparently did so on April 3, when thousands of users reported problems with the social media giant's facebook, instagram and WhatsApp platforms, according to technology/metas-whatsapp-down-thousands-downdetector-shows-2024-04-03/”>Reuters.
This latest incident followed a two-hour outage that facebook and instagram suffered last month, affecting thousands of people around the world.
Meta has about 3.19 billion daily active users across its family of apps, which also includes Threads.
In addition to being a serious headache, social media outages can be costly in terms of lost advertising dollars.
Studies indicate that 62.3% of the world's population uses social networks and the average daily use time is 2 hours and 23 minutes.
No matter how you look at it, that's a lot of eyeballs, and the people behind those eyeballs want to buy all kinds of things.
Last year, social media advertising spending reached $270 billion and is expected to surpass $300 billion by 2024, according to Statesman.
The best of facebook for marketing
facebook, which has 2.9 billion monthly active users, was chosen as the leading social media platform for marketing in 2023, Statista said. About 90% of marketers surveyed said they used it for promotional purposes.
instagram is also a lucrative marketing destination. The platform allows businesses to promote their products and services through various formats, from photos and tags to Stories and Reels.
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I don't want to dwell on the bad news, but on October 4, 2021, facebook and its subsidiaries Messenger, instagram, WhatsApp, Mapillary, and Oculus suffered a global crash for six to seven hours.
CEO Mark Zuckerberg posted an apology on facebook, writing: “Sorry for the interruption today. I know how much you rely on our services to keep you connected to the people you care about.”
The Fact Check Websitefacebook-ad-revenue/”> snopes did a rough estimate and suggested the outage cost $79 million in lost advertising revenue.
Social media advertising is facing competition from TikTok and influencers, but it remains a major source of revenue and is something stock market analysts follow.
In February, Meta, a member of the so-called Big 7 tech stocks, posted fourth-quarter adjusted earnings per share of $5.33 on revenue of $40.1 billion.
Analysts had expected adjusted earnings per share of $4.94 and revenue of $39 billion.
A year earlier, Meta reported earnings of $1.76 per share on revenue of $32.2 billion, meaning sales grew 25% year over year and profits tripled.
The company also boosted its share buyback by $50 billion and initiated a quarterly dividend of 50 cents per share for the first time.
Additionally, Meta said fourth-quarter advertising revenue was $38.7 billion, compared to $31.3 billion a year earlier.
Analyst sees ad revenue growth thanks to ai
During an earnings call with analysts, Susan Li, Meta's chief financial officer, said the company was building its Advantage+ portfolio to help advertisers leverage artificial intelligence to automate their advertising campaigns.
“Advertisers can choose to automate part of the campaign creation setup process, such as who to show their ad to, with the Advantage+ audience,” he said.
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“Or they can automate their campaign completely using our end-to-end automation tool to drive online sales, Advantage+ Shopping, which continues to see strong growth,” Li said.
Analysts clearly liked what they were hearing, and several raised their price targets for Meta shares.
Wedbush analyst Scott Devitt said he was “encouraged by the impressive results and guidance as the company continues to see healthy engagement trends and improving monetization.”
“Meta remains our top digital advertising pick and we are raising estimates following the results,” he wrote in a research note.
In February, he reiterated an Outperform rating on Target and raised his price target on the company's stock by $100 to $520 per share.
Advertising revenue was also a concern for Jefferies analysts, who raised the company's price target on Meta Platforms to $585 from $550 on April 4, while affirming a Buy rating on the stock.
Based on an updated market share analysis, analysts believe Meta could capture 50% of the industry's incremental advertising dollars in 2024, which would be the highest level ever recorded and well above its 33% in 2023.
In 2024, Meta's ad revenue could grow 20%, above the industry average of 9%, as generative ai advertising tools complement Advantage+'s already best-in-class product suite. ” of the company, analysts told investors in a research note.
Jefferies analysts say Meta's market share gains will accelerate further in 2024. The firm now estimates that in 2024, Meta's advertising business could surpass amazon's. (AMZN) for the first time since 2015.
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