Facebook share price experiences volatility
16:32, 23 September 2021
Menlo Park, California-based Facebook’s share price dipped 4% in pre-market trading, and then fluctuated slightly after the opening bell in New York as the company grappled with advertisers’s difficulties measuring ad effectiveness and the resignation of its chief technology officer.
Facebook’s share price took a hit early Thursday as the company grappled with a change to its advertising system and the departure of a leading executive.
Apple privacy change cited as cause
The volatility resulted after the company confirmed that it has become more difficult to track the effectiveness of ads due to a privacy change that Apple made to its mobile operating system.
On Wednesday 22 September, volume was nearly double the 60-day average, according to Barron’s.
The privacy change has impacted advertisers’s returns and made it more difficult to measure ad effectiveness, according to Graham Mudd, Facebook's vice president of product marketing.
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Ad measurement costs may be increasing
“The cost of achieving your business outcome may have increased, and it’s also gotten harder to measure your campaigns on our platform,” Mudd wrote in a blog post.
In some cases, technology is failing to indicate whether a user has made a purchase, preventing advertisers from assessing returns on ad investments.
“Our estimate is that in aggregate we are underreporting (Apple operating system) web conversions by approximately 15%; however, there is a broad range for individual advertisers,” wrote Mudd. “We believe that real-world (ad response) conversions, like sales and app installs, are higher than what is being reported for many advertisers.”
Mudd said Facebook is accelerating investments to address known reporting gaps and launching capabilities that will allow advertisers to track web conversions even when they do not own the top-level website. Facebook is also making several other efforts to make ad measurement easier.
CTO to pursue philanthropic activities
Meanwhile, Chief Technology Officer Mike Schroepfer’s departure also appeared to affect the share price. The longtime Facebook executive announced Wednesday that he will leave his post next year to become a senior fellow of the company and pursue personal philanthropic activities.
“This is a difficult decision because of how much I love Facebook and how excited I am about the future we are building together,” he said in a post on his personal Facebook page.
Schroepfer will continue to recruit and develop technical talent for Facebook. He has been with the company for 13 years and is a close confidant of CEO Mark Zuckerberg.
“He has played a critical role in almost everything we’ve done,” Zuckerberg said on Wednesday in a company blog post.
Schroepfer will be replaced by Andrew Bosworth, known as Boz, who is also a longtime Facebook employee and confidant of the CEO. Facebook’s share price was down more than 1% in New York Thursday as the social media giant deal with the departure of its chief technology officer.
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