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.
Capsule checked 25th November 2020
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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.
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.
Adbrands Daily Update 28th Sep 2020: "More Questions, More Answers". Keen to make amends for the chaos caused when it allowed Cambridge Analytica to game its system in 2016, Facebook is rolling out a mammoth campaign to encourage safe voting in the upcoming US election, and eliminate disinformation. This spot from Droga5 does a fine job of delivering the message without being too serious or partisan; it actually makes voting look like fun, and not just everyone's social responsibility.
Adbrands Daily Update 24th Aug 2020: Facebook's chief marketing officer Antonio Lucio announced his resignation after just two years in his role. His successor has not yet been named. "This has been a challenging year for us all," he said in a statement posted on LinkedIn. "Given the historical inflection point we are in regarding racial justice, I have decided to dedicate 100% of my time to diversity, inclusion and equity. Though these issues have been core to my personal purpose and my work for many years, I want to make them my sole focus. I will devote the next chapter of my professional life to helping companies and agencies in the marketing and advertising industries accelerate their transformation and to drive holistic and profound change." His statement also acknowledged that Facebook itself still has work to do in addressing its own internal troubles. "As the company evolves, striking the right balance between preserving freedom of speech and eliminating hateful speech on the platforms is a generation-defining question that must continue to be addressed. I know the company and its leadership agree on the centrality of this important task."
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