Mark Zuckerberg says recent traffic is ‘well beyond’ the rise that Facebook normally sees on New Year’s Eve.


Tobias Hase/Zuma Press

The coronavirus pandemic might bring people flocking to


and other social networks, but advertising dollars are unlikely to follow this time.

As the world hunkers down to deal with the outbreak, people confined to their homes will be making much more frequent use of social networks to check in on friends and loved ones, keep up on news and maybe even share tips on scoring toilet paper. In a recent call with reporters, Facebook CEO Mark Zuckerberg said recent traffic is “well beyond” the rise the company normally sees on New Year’s Eve. He added that the company is working to stay on top of its infrastructure needs “to make sure things don’t melt down.” Facebook’s capital expenditure is now more than $15 billion annually, in large part to build out that infrastructure.

But a boost in traffic won’t spare Facebook and its peers from a global recession that will bring a sharp drop in advertising spending. Some sectors like travel are already slashing their marketing spend as trips get delayed or canceled. (Mark Shmulik of Bernstein estimates that travel-related advertising accounts for about 6% of Facebook’s total revenue.) Same with entertainment-related marketing as concerts and movie theaters have largely been shut down under government edicts related to the outbreak.

The retail and automobile sectors also are getting hit hard as stores and plants have shut down. Colin Sebastian of Robert W. Baird estimates that these two categories combined account for about one-third of the total digital-advertising market. Small businesses are also a major source of social-media advertising, for both Facebook and smaller players.


formally pulled its first-quarter and full-year forecast on Thursday, citing growing uncertainty about the state of the market.

Meanwhile, Wall Street’s targets have barely budged. The consensus 2020 revenue estimate for Facebook has come down less than 1% over the past month, according to FactSet. Estimates for the same period for



and Snap have also come down by barely 1% each. All four stocks have taken a beating with the broader market in that time, but they could be in danger of further slippage once more analysts make a hard reset of their numbers.

There is also the risk that the pandemic gives fresh rise to misinformation and harmful content that social networks so often play a role in disseminating. But further regulatory crackdowns could be on ice for a while. As advertising analyst Michael Levine of Pivotal Research said in a report, “We would guess the government has bigger issues to be worried about right now.”

Write to Dan Gallagher at

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