Facebook advertising revenue soars despite data scandal

Facebook CEO Mark Zuckerberg said ahead of his hearings in Congress that user threats to boycott the site had not caused "any meaningful impact". Picture / AP

Facebook's data scandal has failed to hit the tech giant's surging advertising revenue, despite triggering a user revolt and Mark Zuckerberg's appearance before the US Congress.

Advertiser spending on Facebook was up by an average of 43 per cent year-on-year over the weeks following the data row, according to advertising analysts.

Since the revelations, several major advertising groups have threatened to boycott Facebook if it doesn't offer better user privacy controls. The details of 87 million Facebook users were obtained by UK political consultants and used in US elections.

But Facebook saw a boost in advertiser spending each week after the scandal broke on March 18, according to media analysts 4C, which monitors hundreds of millions of dollars of ad spending. Spending increased by 7 per cent in the week of the scandal and 15 per cent the week after, compared to a six point fall at the same time in 2017.

The analysts estimate advertisers spent 62 per cent more on Facebook in the first quarter of 2018 than in 2017.

Arron Goldman, the marketing head of 4C, told the Daily Telegraph: "Brands are addicted to social media. They may change tactics, but they won't move from it."

In February, consumer goods giant Unilever spoke out against extremism on Facebook, while web-browsing company Mozilla, which manages the Firefox browser, boycotted the site over its handling of the Cambridge Analytica scandal.

Facebook is set to report first quarter earnings on April 25. Last year, Facebook made US$7.8 billion ($10.6b) from advertising in the first three months of the year, a 51 per cent increase.

"It's hard in the long term to see an impact on its ad revenue," said Ewen McIntyre, technology analyst at Gartner. "Trust in Facebook has fallen slightly, but as we saw with YouTube last year I would expect this to be short-lived."

Brands are addicted to social media.They may change tactics, but they won't move from it.

Arron Goldman, marketing head of 4C

Zuckerberg said ahead of his hearings in Congress that user threats to boycott the site had not caused "any meaningful impact".

Facebook marketing vice-president Carolyn Everson said she had not seen a rush from users to secure their data from advertisers.

"We have not seen wild changes in behaviour with people saying I'm not going to share any data with Facebook anymore," Everson told a Wall Street Journal event in London.

Last week Cambridge Analytica's acting chief executive Alexander Tayler dismissed claims that it had "hacked" Facebook, but said it had legally obtained users' data.

"Hundreds of data firms have utilised Facebook data in a similar fashion," he said.