Read our new manifesto
22 - 26 March

Festival for a rapidly changing world

Topics include: Direct to consumer / E-commerce / Data & privacy / Martech

Facebook ad revenues soar as it bemoans Apple privacy changes

Planned changes to Apple’s iOS 14 could greatly undermine Facebook’s ability to monetize its huge audience base

Facebook has emerged as one of the chief beneficiaries of a global shift to digital advertising in 2020, its earnings in the final quarter hitting nose bleed levels on the back of a global population forced to look online for social interaction.

Far from exhibiting excess ebullience, the social media giant has used the occasion to single out Apple’s pending privacy protections as a harbinger of leaner times to come as its ability to target ads is constrained.

Up against Apple

  • Putting Apple in its crosshair, Facebook warned that the Q4 earnings performance would not be maintained through 2021, principally because of a more onerous privacy policy from the iPhone maker.

  • Facebook has been making hay throughout the pandemic, its net income reaching a staggering $11.2bn over the three months to December, largely on the back of a 22% surge in advertising revenue which climbed to $28.07bn.

  • This windfall was earned on the back of 12% growth in its monthly user base to 2.8 billion, prompting the business to go on a hiring spree and increase headcount by 30% over the year to 58,604.

  • These global figures mask the relative performance of subsidiaries such as Instagram, but analysis by eMarketer suggests the image-sharing app drew 36% of Facebook’s total ad revenues and close to half of all its ad revenue in the US.

  • Mindful that all good things must come to an end, Facebook cautions that breakneck expansion cannot continue indefinitely with a shift toward online commerce likely to moderate or even reverse if and when the pandemic is brought under control.

  • Labelling Apple as its bête noire, Facebook also expressed consternation at planned changes to Apple’s iOS 14, which would mandate apps to obtain permission from individuals before they can collect or share data, greatly undermining Facebook’s ability to monetize its huge audience base.

  • Chief exec Mark Zuckerberg complained: ”Apple may say they’re doing this to help people, but the moves clearly track their competitive interests. This dynamic is important for people to understand because we and others are going to be up against this for the foreseeable future.”

  • Refusing to accept the changes lying down, Facebook operating head Sheryl Sandberg has revealed that the social platform will leverage its influence to surface the concerns of small businesses worried about what the changes mean for them.

Anything else?

  • After a tumultuous 12 months, Facebook is positioning itself to fight tomorrow’s battles having sought to placate recurring issues such as the propagation of misinformation and fake news.

  • That culminated during the recent US presidential election when Facebook blocked incendiary proclamations issued by Trump before he left office, and a decision to stop accepting new political ads a week before the 3 November vote.

  • That process will continue through 2021, with Facebook seeking ways to reduce the volume of political content presented to members via their news feeds.

  • Zuckerberg said: ”One of the top pieces of feedback that we’re hearing from our community right now is that people don’t want politics and fighting to take over their experience on our services.”

Join us, it's free.

Become a member to get access to:

  • Exclusive Content
  • Daily and specialised newsletters
  • Research and analysis