Facebook revenue increases by blocking ad blockers
Facebook’s recent workaround for Adblock Plus and other ad blockers is already earning it money. On today’s blockbuster Q3 earnings call, the company said desktop ad revenue grew 18 percent year-over-year this quarter compared to around 9 percent in previous quarters, and that thwarting ad blockers was largely the cause for that boost.
While Adblock Plus announced it would circumvent the ban, and temporarily did, Facebook nullified that change and has managed to keep ads flowing through Adblock Plus. Facebook’s position is that ads help pay for operating its service, so it’s reasonable to force users to see them as long as they’re not too interruptive. Adblock Plus and some users counter that Facebook’s ads are still distracting even if they blend into the feed. And they say that ad blockers help prevent people from being tracked, which raises privacy concerns.
Facebook hit $1.1 billion in desktop ad revenue this quarter, up from $998 million last quarter. While Facebook makes 84 percent of its ad revenue on mobile, desktop still contributes a meaningful amount to its total $7.01 billion in Q3 revenue. Scoring ad revenue from ad blocker users could help offset the reductions in revenue growth Facebook expects now that it’s hitting maximum ad load.
During the call, Facebook CFO David Wehner said, “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.” Earlier in the call he specifically said this was desktop ad revenue, which Facebook confirms to me.
As long as Facebook’s elite engineering squad can stay one step ahead of the ad-blocking software developers and their army of open-source contributors, Facebook could squeeze more revenue out of its remaining desktop users.