The disclosure indicates that the display-ad business model – which has largely been the industry standard for monetizing content on the internet — may be tapped out.
When Facebook reported its third quarter earnings, CFO Dave Wehner outlined how ad load is going to be less effective in the very near future. “We continue to expect that ad load will play a less significant factor driving revenue growth after mid-2017. Over the past two years we have averaged about 50% revenue growth in advertising. Ad load has been one of the three primary factors fueling that growth,” explained Wehner on a November 2 conference call. “With a much smaller contribution from this important factor going forward, we expect to see ad revenue growth rates come down meaningfully.”