Facebook Inc (US)

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 Oct 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. Yet Facebook has gradually won over most sceptics (despite the even more astronomical $22bn purchase of 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. Revenues for 2017 soared by almost 50% to $40.6bn, while net income was almost $19bn. The number of daily active users surpassed 2 billion people for the first time in June 2017; 1.4bn use the site on a daily basis. Adbrands does not currently offer a business profile for this company but subscribers may access account assignments and contact information. The searchable account assignments database is available to full subscribers to Adbrands.net premium services. Click here to access Adbrands account assignments (subscribers only); or see here for information on how to subscribe.

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Capsule checked 28th June 2017

Recent stories from Adbrands Weekly Update:

Adbrands Weekly Update 15th Feb 2018: Unilever CMO Keith Weed - recently named as the World Federation of Advertisers' Global Marketer of the Year 2017 - threw down the gauntlet to the social media industry, warning that it will reduce advertising on Facebook, YouTube and other such sites unless they do more to combat fake news and divisive content. "We will prioritize investing only in responsible platforms that are committed to creating a positive impact in society," he told an IAB conference in California. "Social media should build social responsibility." He acknowledged that most sites have taken "meaningful" steps towards combating hate-based content over the past year, but that more needs to be done, especially in relation to content that is likely to be seen by children. That view is shared by other major advertisers, not least AT&T which has still not returned to YouTube almost a year after it suspended advertising over its proximity to hate-based content. That furore erupted in March last year following an investigation by The Times newspaper in London that revealed that ads from blue-chip advertisers were being displayed regularly alongside extremist videos on YouTube and on the websites of neo-nazi, homophobic, Islamic terrorist and other hate groups. Separately, this week, Facebook began testing a new "downvote" option - the closest it is ever likely to get to a "dislike" button - in which users can mark content or comments as "offensive", "misleading" or "off topic".

Adbrands Weekly Update 1st Feb 2018: Facebook reported strong growth in both revenues and profits for 4Q and for the year, but registered its first-ever quarter-to-quarter decline in the number of daily active users in its core market of North America, from 185m in 3Q to 184m. Usage elsewhere, especially in Asia and emerging markets, continued to soar, lifting the global total over 1.4m for the first time. The company also said that its moves to reduce the number of viral videos appearing in users' feeds had led to a slight decline in the average time they spent on the service. Facebook is trying to pivot towards more relevant content in users' feeds to address concerns about spreading fake or potentially harmful stories. “In 2018," said CEO Mark Zuckerberg, "we're focused on making sure Facebook isn't just fun to use, but also good for people's well-being and for society. We're doing this by encouraging meaningful connections between people rather than passive consumption of content. Already last quarter, we made changes to show fewer viral videos to make sure people's time is well spent. By focusing on meaningful connections, our community and business will be stronger over the long term." There was no visible impact on revenues for the final quarter, which soared by 47%. Annual revenues were up by the same percentage to a new high of $40.6bn, while net income jumped 56% to $15.9bn despite a higher tax charge in the final quarter.

Adbrands Weekly Update 14th Dec 2017: The advertising crisis affecting traditional publishers continued to worsen during 2017 as their share of digital spend slumped. According to industry watcher eMarketer, Google and Facebook between them siphoned off 63% of US digital advertising expenditure this year, up from 58% in 2016. The share of the next three digital publishers also increased. Microsoft and Verizon's Oath each accounted for just under 12% in 2017 and Amazon for a little over 5%. That left a measly 8% of spend to be shared out among everyone else. And the situation is not expected to get any better, with Google and Facebook expected to top 65% next year, and Amazon 7%.

Adbrands Weekly Update 2nd Nov 2017: There was no slowdown in Facebook's continuing growth curve, although in his address to investors, CEO Mark Zuckerberg acknowledged the ongoing controversy over exploitation of the platform by Russia-backed propagandists to spread discord during last year's Presidential election. "Our community continues to grow and our business is doing well," he said. "But none of that matters if our services are used in ways that don't bring people closer together. We're serious about preventing abuse on our platforms. We're investing so much in security that it will impact our profitability. Protecting our community is more important than maximizing our profits." Among other actions, the company plans to double its team of security and safety moderators to 20,000 staff by the end of 2018, and is building AI systems that will help to identify "bad content and bad actors". The group also announced plans to invest heavily in commissioned video content in a bid to match similar efforts by Apple and Google's YouTube, all of whom are chasing the lead established by Netflix and Amazon. For now, though, there was no discernible impact on profit, which soared by 79%, topping $4bn for the first time to hit a staggering $4.7bn, while revenues leapt 47% to another high of $10.3bn. Perhaps the most impressive achievement was the jump in profit margin by almost eight full percentage points to 45%. Daily and monthly active users both jumped by 16% to 1.4bn and 2.1bn individuals respectively.

Adbrands Weekly Update 27th Jul 2017: Facebook reported another spectacular set of results for 2Q, beating estimates for something like the 15th consecutive quarter. The company has been trying to lower analysts' expectations for at least the past year, warning that there are limits to the number of ads it can display in users' news feeds. The 47% rise in ad revenues this quarter - an increase that other media channels can only dream about - was actually the lowest for almost two years. But so far though there has been no serious net effect on financial performance, not least because of a significant rise in ad rates, up by an average 24% in 2Q. As a result, total revenues jumped by 45% $9.3bn, while net income powered up 71% to $3.9bn, surpassing ad rival Google for the first time.

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