Facebook grew revenue by 18% in Q2 earning report. This had surprised many. There's why.
The cost of ads on Facebook has become expensive before pandemic, which means that therere more ads available to serve that the available active users. Take an example of a web design company in Phoenix AZ that plans to place ads on Facebook. If therere 20 companies target a similar target audience base with $50k a month total before the virus, but only $25K were actually used. The pandemic has made the companies to cut the budget to $35 a month, but $30k were actually used.
The coronavirus will probably not go away in Q3. We expect Facebook to grow the revenue again in Q3 at a slower pace. Facebook stock price will slowly reflect those factors in coming weeks.
