WASHINGTON, July 28 (Sputnik) – Meta’s* sales dipped for the first time ever due to skyrocketing inflation and marketers’ fears that a recession is near, company executives told investors.
After the Federal Reserve raised US interest rates for a fourth time this year earlier in the day, Chairman Jerome Powell downplayed talk of a recession while the White House flatly denied the country was in one. The Fed’s Atlanta branch, however, has recently estimated that the US could see two straight quarters of GDP decline, which many consider the technical definition of a recession.
“We seem to have entered an economic downturn that will have a broad impact on the digital advertising business. It’s always hard to predict how deep or how long these cycles will be, but I’d say that the situation seems worse than it did a quarter ago,” founder and CEO Mark Zuckerberg said during a quarterly earnings call on Wednesday. “In the last recession, we invested in our ads business through the downturn and came out stronger on the other side. And I’m focused on doing the same today.”
Meta COO Sheryl Sandberg in the same call said the company is focused on helping clients run efficient marketing campaigns amid these concerns.
“There are also new challenges with rising inflation and uncertainty around a looming recession,” Sandberg said. “We know that recessions put pressure on marketers to make sure their ad budgets are spent in the smartest way possible.”
Meta revealed in its second quarter report that dropped revenues from $29 billion during the same period in 2021 to $28.8 billion this second quarter. The company said it expects total revenue for this year’s third quarter to drop to a range of $26-28.5 billion.
White House spokesperson Karine Jean-Pierre earlier said the textbook definition of a recession is not two negative quarters of GDP. The Biden administration does not believe the current economic indicators show the US is in that type of economic downturn, she added.
*Meta is a company banned in Russia