Meta is set to receive a blow to its revenue after pulling out Instagram and Facebook from Russia. This unexpected loss will compound several concerns about the company’s sales since Russia accounts for 1.5% of Meta’s advertising funds, according to Dave Wehner, chief financial officer at Meta during the Morgan Stanley conference.
In 2021, Meta amassed a staggering $114.9 billion in total sales, with Russia accounting for 1.7 billion based on Wehner’s comments which is about $4.7 million lost per day.
The Kremlin, a fortified complex in the centre of Moscow announced that it would commence restricting Instagram. This is the latest escalation from the ongoing conflict between the Putin regime and Meta following Russia’s invasion of Ukraine. Russia also stated that it would categorize Meta as an “extremist organization.”
The decision closely follows Meta’s decision to add warning labels to all Russian state media agencies on Instagram as it did on Facebook. Facebook has already been banned in Russia and Meta stated that it would restrict Russian advertisers from purchasing ads on Facebook.
This loss of revenue from Russia comes at a period when Meta is already contending with questions on new ways to expand its revenue. As with other behemoth companies like Twitter and Google, the change to Apple’s iPhone software in 2021 has also impacted Facebook, making it more difficult for these companies to offer advertisers in-depth information about their users.
It didn’t take long for Facebook to warn investors that there would be a $10 billion reduction in revenue this year due to the Apple shift.
Facebook and Instagram were very popular in Russian, and oftentimes they were the easiest-to-access gateways to other parts of the world in a nation where information is taken very seriously by the government. According to Statista, a data tracking company, Facebook had over 70 million users in Russia and over 60 million on Instagram.
WhatsApp is also another Meta owned social media messaging app with more than 75 million users in Russia according to Statista. WhatsApp is not monetized like Facebook and Instagram, and it still remains available in all parts of Russia.