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During the second-quarter earnings call in July, Facebook had predicted that the iOS updates could cause more headwinds during the third quarter than earlier.
Shares of Facebook Inc (NASDAQ: FB) fell as much as 4.1% on Wednesday after the social media giant said it underreported ad performance on iPhones. Facebook said Apple’s privacy measures in its iOS operating system caused the underreporting.
According to market analytics provided by MarketWatch, FB stock closed yesterday trading at $343.21. Meanwhile, the FB stock market had added approximately 0.59% during the extended hours.
The company explained through a blog post how Apple’s new privacy approach has adversely affected its marketing.
“We’ve heard from many of you that the impact on your advertising investment has been greater than you expected. The cost of achieving your business outcome may have increased and it’s also gotten harder to measure your campaigns on our platform. In some cases, this is due to underreporting on our part. We estimate that in aggregate we are underreporting iOS web conversions by approximately 15%; however there is a broad range for individual advertisers,” noted Graham Mudd, Facebook’s VP of Product Marketing.
As advertisers through Facebook cannot measure their ad performance, users are left wondering if the company is effective in helping them achieve their goals. However, the company noted that the real-world conversions, like sales and app installs, are higher than what is being reported for many advertisers. Hereby reassuring advertisers of better ad performance.
During the second-quarter earnings call in July, Facebook had predicted that the iOS updates could cause more headwinds related to ad activities during the third quarter than earlier.
Facebook Stock and the Market Outlook
The Facebook stock market has experienced mixed volatility since the beginning of the Covid crisis earlier last year. The greater part of last year was characterized by low advertisements as businesses remained closed as per the government’s directive.
The company was heavily impacted by low advertisers since it is the main source of revenue. As the United States approached the presidential elections, once again the company was met with the periodic election’s challenges. However, the company was able to rise above the waters and remain neutral as a social media platform.
According to market analytics provided by MarketWatch, FB stock has gained approximately 37%, and 25% in the past year and YTD respectively through Wednesday. However, the company’s stock market has dropped approximately 6.8%, and 8.21% in the past month and five days respectively through Wednesday.
A study conducted by the same media noted that 49 ratings gave FB stock an average of Over rating.