June 18, 2024

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Meta’s advertising rebound gets huge assist from China despite ban

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A Facebook sign is seen at the second China International Import Expo (CIIE) in Shanghai, China November 6, 2019.

Aly Song | Reuters

Meta may be banned from operating in China, but the company is finding plenty of growth coming from the world’s second-biggest economy.

In its third-quarter earnings report on Wednesday, Meta said sales rose 23% from a year earlier, illustrating the company’s ability to weather a tough digital ad market better than smaller rivals like Snap and X, formerly known as Twitter.

Susan Li, Meta’s finance chief, told analysts on the earnings call that Chinese companies played a major role this quarter, continuing a theme from recent periods.

Online commerce and gaming “benefited from spend among advertisers in China reaching customers in other markets,” Li said. That means Chinese companies are spending big money on Meta’s platforms like Facebook and Instagram to send targeted advertising to the company’s billions of users around the world.

Among Meta’s geographic regions, Li said the rest of the world category showed the strongest growth, at 36%. Europe was next at 35%, followed by Asia-Pacific at 19% and North America at 17%. The first category includes South America, and Li said China was a big reason for the rapid expansion.

“Brazil was a strong contributor to the region’s acceleration due in part to increased advertisers demand from China advertisers targeting users in Brazil,” Li said.

Facebook, along with Google and Twitter, are all blocked in China due to the country’s Great Firewall. Facebook and its sibling apps have been inaccessible there since 2009.

Still, Meta has witnessed a “longer-term trend of overall growth” from the China market, Li said, though there have been some “periods of volatility.” For instance, she said that the past two years were marred by higher shipping costs that resulted from the Covid pandemic, which also brought strict lockdown rules in China.

But with China opening up more this year and the worldwide supply…

2023-10-25 20:19:00

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