Facebook has become one of the definitive icons of the modern digital age, a virtual embodiment of the human potential of the internet as a tool for interpersonal communication and information sharing. It is also something of a fairy tale in which a computer nerd with limited interpersonal skills of his own became one of the world's richest individuals before he was 30 by ruthlessly pursuing his own vision and then cashing in with what was then the biggest technology IPO of all-time. In this fairy tale, Facebook's creator and CEO Mark Zuckerberg is arguably the hero and the villain combined, certainly according to his many detractors, and for a while it was far from clear yet just how happy the ending of this story would be. Even with its vast audience, which first topped 1bn monthly active users in 2012, Facebook's ability to justify its sky-high $100bn-plus valuation seemed untested, and there were distinct wobbles in the first months following the site's IPO, not least after the company paid $1bn to buy Instagram, a service with virtually no revenues at that point in time. Yet Facebook has gradually won over most sceptics (despite the even more astronomical $22bn purchase of private messaging service WhatsApp). It managed to accumulate an extraordinary #2 position in mobile advertising (behind Google) in little more than a year, and its overall sales growth appears to justify all those original expectations. Nevertheless, life turned rather more challenging during 2017 and especially in 2018 after political extremists of many different affiliations were found to have used Facebook's platform to manipulate political sentiment, infringe privacy and misuse data, not least in the US in the run-up to the 2016 Presidential election. Zuckerberg and COO Sheryl Sandberg have spent much of their time since then fighting multiple political and ethical fires around the world. Yet that seems to have had only minimal impact on Facebook's financial performance. There has been a marked slowdown in user growth, especially in mature markets, but advertising revenues continue to soar. For 2020, revenues jumped by another 22% to almost $86.0bn, with net income at a record $29.1bn. By the end of 2020, some 2.8bn people worldwide accessed Facebook on a monthly basis, mostly from smartphones; more than 1.8bn used the site daily. The largest proportion of active users by far are from outside North America. India alone had 310m Facebook users by October 2020, ahead of the US on 190m. All of the remaining Top Ten markets by users were developing markets, mostly in Asia or Latin America. In 3Q 2021, Facebook adopted a new corporate banner, Meta Platforms Inc, that becomes the umbrella for all its individual brand businesses.
Capsule checked 25th November 2020
Adbrands Account Assignments track account management for the world's leading brands and companies, including details of which advertising agency handles which accounts in which countries for major markets.
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Marketer Moves 1st Jun 2022: Sheryl Sandberg steps down as COO of Meta Platforms. See Marketer Moves (members only).
Adbrands Update 3rd Feb 2022: Facebook parent Meta reported disappointing results for the final quarter of 2021, with a bigger than expected decline in net income - down 5% on 4Q 2020 - and a gloomy prognosis for the year ahead. CEO Mark Zuckerberg said he expected revenue growth to slow in 2022 because users are spending less on the company's more expensive products. More worryingly, for the first time ever, the number of average global daily users of Facebook fell by almost 0.5m in the final three months of the year. The company's share price plunged more than 26% following the announcement, wiping $230bn off its value, the biggest ever fall for any US company. For the full year, revenues rose 37% to almost $118.0bn and net income was up 35% to $39.4bn. Meta's results contrasted somewhat with those of Google parent Alphabet, whose net income almost doubled for the year, prompting a rise in share price to just below its previous all-time high.
Marketer Moves 16th Dec 2021: New VP marketing TBC at Instagram. See Marketer Moves (members only).
Marketer Moves 13th Dec 2021: New VP EMEA at Meta Platforms. See Marketer Moves (members only).
Adbrands Daily Update 29th Oct 2021: Following on from its below-par results for 3Q, Facebook confirmed the creation of a new corporate umbrella for its various brand businesses. The move had been anticipated for some weeks. Just as Google operates now as one unit of corporate umbrella Alphabet, Facebook and its other brands - WhatsApp, Instagram, Oculus etc - will become units of parent entity Meta Platforms Inc. CEO Mark Zuckerberg said this will be the next step in the company's move an evolved internet that has been dubbed the "metaverse". "We've gone from desktop to web to phones, from text to photos to video, but this isn't the end of the line," he said. "We believe the metaverse will be the successor to the mobile internet."
Adbrands Daily Update 26th Oct 2021: Facebook reported weaker than expected growth for 3Q 2021 amid a new barrage of headwinds relating to its business practises. Whistleblower Frances Haugen, a former Facebook employee, has been going on the record to lawmakers in several countries over the internal documents she made public in which the company appeared to acknowledge its role in the proliferation of hate speech in social media in general and the platform's potentially toxic impact on younger users' self-esteem. Changes to privacy on Apple devices, in which users are now being asked whether they wish to be tracked, also impacted on advertising sales growth. Revenues for the quarter were up 35% to over $29bn, and profits rose 17% to $9.2bn, but both figures were below expectations. By comparison, revenue growth for the first half of the year was significantly higher at 52%.
Marketer Moves 14th October 2021: Facebook confirms successor to ad chief Carolyn Everson. See Marketer Moves (members only).
Marketer Moves 1st Sep 2021: New head of agency development APAC at Facebook. See Marketer Moves (members only).
Marketer Moves 31st Aug 2021: Another senior marketer leaves Facebook. See Marketer Moves (members only).
Marketer Moves 27th May 2021: From Facebook to Coinbase. See Marketer Moves (members only).
Adbrands Daily Update 29th Jun 2021: In a big victory for Big Tech, a federal judge dismissed two anti-monopoly lawsuits brought by the US government and the attoneys general of 46 US states against Facebook before the cases had even begun. Judge James Boasberg, an Obama appointee, said the suit filed by the government's Federal Trade Commission was "legally insufficient" because it didn't cite enough evidence that Facebook constituted a monopoly, but he granted permission for more detailed resubmission within 30 days. The states' suit to force Facebook to divest WhatsApp and Instagram was dismissed altogether. Those businesses were acquired in 2014 and 2012 respectively, but the states' lawsuit wasn't filed until the end of 2020. "The court is aware of no case... where such a long delay in seeking such a consequential remedy has been countenanced in a case brought by a plaintiff other than the federal government."
Marketer Moves 10th Jun 2021: Ad sales chief Carolyn Everson is leaving Facebook. See Marketer Moves (members only).
Adbrands Daily Update 6th Apr 2021: Amazon is becoming a significant force in digital advertising. According to market watcher eMarketer, the ecommerce giant's share of US digital ads jumped from less than 8% in 2019 to 10.3% last year, or over $15.7bn. The bulk of that business comprises search-related ads on Amazon's own ecommerce pages. That's still some way behind Google (28.9%) and Facebook (25.2%), but Amazon's share is rising, mostly at Google's expense, while Facebook is mostly flat. eMarketer predicts that Amazon will continue to grow over the next three years, hitting 12.8% in 2023. Over the same period, Google is expected to fall to 26.6%. "You can see Amazon gaining share, Google losing share, and Facebook stable and gaining a tiny bit," says eMarketer analyst Nicole Perrin. "A big reason for that is Facebook isn't doing search ads and that's where Amazon is really competing."
Adbrands Daily Update 10th Dec 2020: Facebook was hit with a massive lawsuit from the Federal Trade Commission and 46 US states, alleging anti-competitive practises. "Facebook's actions to entrench and maintain its monopoly deny consumers the benefits of competition," said FTC Bureau of Competition director Ian Conner. "Our aim is to roll back Facebook's anticompetitive conduct and restore competition so that innovation and free competition can thrive." In particular, the suit aims to force a reversal of Facebook's acquisitions of both Instagram and WhatsApp. Facebook itself responded by pointing out that it was the FTC itself which had approved both purchases in 2012 and 2014 respectively. "The government now wants a do-over, sending a chilling warning to American business that no sale is ever final," said Facebook's general counsel Jennifer Newstead. "People and small businesses don't choose to use Facebook's free services and advertising because they have to, they use them because our apps and services deliver the most value. We are going to vigorously defend people's ability to continue making that choice."
Adbrands Daily Update 1st Dec 2020: Facebook added to its portfolio with a deal to acquire CRM platform Kustomer. Terms were not disclosed but the WSJ reported a value of just over $1bn . The new addition to Facebook's offering will enhance its fast-expanding "social commerce" service. Kustomer agglomerates customer enquiries and conversations across multiple social platforms and also provides AI-based chatbots to answer common questions.
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