Facebook, Twitter, Google, and Amazon all delivered performance reports for the third quarter on Thursday, reflecting a volatile time in media and advertising, but they all showed signs of weathering the pandemic and unrest on social media. Some weathered it more nimbly than others.
Facebook, coming off one of its most tense periods with an advertiser boycott in July, showed unrelenting growth in ad sales, reaching $21.2 billion, up 22% year over year. The social network did see a dip in daily users in the U.S. and Canada, which it attributed to less activity thanks to the easing of the pandemic. Daily active users were still up 12% worldwide year over year to 1.82 billion people on Facebook, and 3.2 billion people use all its services monthly, up 14 percent year over year.
Meanwhile, Twitter saw a return to ad growth, but expressed concerns around the upcoming U.S. election, which lends to an inhospitable atmosphere for advertising on the site. Meanwhile, Google saw an economic rebound from the depths of the pandemic, pointing to strength in YouTube and Search.
It was a veritable feast of earnings from the tech sector, Apple also reported.
Benefiting from the boycott?
Twitter executives were asked about the Facebook ad boycott in July, and if it pushed more brands to consider Twitter. Twitter CEO Jack Dorsey saw some residual goodwill for seemingly standing up more forcefully to President Donald Trump’s tweets.
Ned Segal, Twitter’s chief financial officer, said that Twitter’s poise leads to goodwill among advertisers. “The decisions that we make, how we make them, how we communicate them ... make it easier for advertisers to choose Twitter with their next dollar, rather than put it somewhere else,” Segal told analysts on the quarterly call.
Ad revenue was $808 million in the third quarter, up 15% year over year.
Too much Twitter politics
Twitter executives worried about how the U.S. election will affect advertisers’ willingness to spend if it leads to chaos and dominates public conversation. “The period surrounding the U.S. election is somewhat uncertain, but we have no reason to believe that September’s revenue trends can't continue, or even improve, outside of the election-related window,” Twitter said in its note to shareholders.
“We have an opportunity to show people a much broader aspect of Twitter than just what they see with news and politics,” Dorsey told analysts.
Twitter missed expectations on user growth, which were still up 29 percent year over year, but analysts worried about Twitter’s mainstream appeal. Daily active user numbers were a problem, with only 36 million in the U.S., which is lower than peers rivals including Snapchat and Facebook.
Facebook is just fine
Facebook continues to add advertisers, reporting that there are now 10 million on the platform, up from 9 million in July. That number is sure to irk critics who have tried to discourage brands from advertising there. The third quarter covers July, when the boycott protesting Facebook’s policies around disinformation and hate speech began.
CEO Mark Zuckerberg opened his call with analysts by restating all the ways Facebook has been trying to control election misinformation and suspicious accounts, including ones that promote QAnon conspiracies and Holocaust denial.
Twitter and Facebook on Apple
The platforms had differing opinions on the major changes coming to Apple devices in 2021, when it turns on stronger privacy controls that will restrict data sharing on iPhones. Apple’s changes promise to affect programmatic internet advertising.
“It may very well level the playing field around personalization,” Twitter CFO Segal said, which means Twitter could have a better shot at targeting consumers in a landscape where Facebook loses its data advantage.
Zuckerberg offered a different take, worrying that privacy laws coming out of the European Union and Apple’s changes will hobble personalization. Facebook needs to “stand up strongly for our vision,” Zuckerberg said.
YouTube topped $5 billion in ad revenue, the majority of which it shares with creators who make the videos. And that’s just Google’s side business. Google reported $46.2 billion in total revenue in the third quarter, up 14% year over year.
“Brand advertisers are coming back to YouTube,” said Ruth Porat, Google’s chief financial officer.
Porat said that consumers were shopping across all areas in the third quarter, and that the pressure from the pandemic was easing and consumer behavior was changing. Google, like all the platforms, is developing more e-commerce products to make it easier to move consumers from search to shopping. YouTube, with 2 billion viewers, is very much viewed as central to that connection.
Google CEO Sundar Pichai is taking the regulatory action against his company in stride, and offered measured words to analysts on Thursday. “Scrutiny is not new for us and in some ways it’s now sector-wide and not surprisingly,” Pichai said.
Google has faced the toughest action yet among its rivals. This month, the Department of Justice and a number of states launched an antitrust case against Google, mainly focused on its power in search.
Amazon hits its prime
It’s no surprise that Amazon is seeing sales surge during the pandemic, and that continued in the third quarter. Sales reached $96.1 billion, up 37% year over year, and profits hits $6.3 billion, up threefold from the same quarter a year ago.
Amazon’s success is being bolstered by its ads business. Amazon reports ad revenue under its “other” category hit $5.4 billion in the third quarter, an increase of 49% year over year.
For the coming holidays, Amazon expects up to $121 billion in sales, which would be up from $87.4 billion in the fourth quarter of 2019.