Despite long standing criticism for mismanagement of user data and privacy concerns, Facebook’s fourth quarter earnings report for 2018 showed that ad profits did not suffer.
Facebook reported advertising revenue at $16.6 billion for the last quarter of 2018, with an increase of 30 percent year-over-year. It reported daily active users (DAU) at 1.52 billion, up 9 percent year over year. The average price of an ad decreased 2%, while ad impressions were up by 34%. In a new release, Facebook CFO David Wehner said that the increase in impressions was primarily driven by ads on Instagram, in addition to Facebook mobile News Feed ads.
“Obviously, we believe we’ve got the best advertising products out there in terms of being able to deliver measurable business results to clients.” said Wehner during the earnings report call. The CFO also noted that the company is facing a deceleration of revenue growth in 2019.
While Facebook did not share the break-out of advertising revenue by ad product type, the report did mention that 93 percent of ad revenue during the fourth quarter came from mobile advertising.
During the earnings call, when asked about Stories ad adoption, Facebook COO Sheryl Sandberg stated that two million advertisers were currently using Stories ads. Facebook had earlier said that Instagram Stories has reached 500 million daily users. This makes it 50% of the platform’s total one billion users. In an added comment, CEO Mark Zuckerberg acknowledged that the company still has a long way to go for monetizing Facebook Stories at the same level as the News Feed. “I’m confident that we’re going to get there, but I want to make sure that we’re giving the right outlook on how we expect the near future to go,” said Zuckerberg. Noting the area he’s most excited about is Instagram shopping and commerce opportunities, he added, “there’s a lot of natural activity happening here, and this year I expect us to deliver some qualitatively new experiences around that.”
User growth across Facebook, Instagram and WhatsApp.
Facebook during the last quarter of 2018:
- 1.52 billion DAUs worldwide
- 186 million were located in the U.S. and Canada
- 2.3 billion monthly active users.
- 2.7 billion people around the world are using Facebook, Instagram, WhatsApp or Messenger each month
- More than 2 billion using at least one of the platforms daily.
Clearly, the concerns that advertisers had over Facebook’s on-going user privacy issues have not impacted the platform’s ad performance or user engagement. On the contrary, Facebook’s decreased average ad prices and increased ad impressions are a boon for marketers wanting to optimize ad dollars.