Facebook’s advertising revenue soars 10.2% to over US$18 billion
Facebook’s advertising revenue climbed 10.2% in Q2 to US$18.321bn.
The results come as many other media organisations, including Twitter, experience dramatic falls in their advertising revenue due to COVID-19.
CEO Mark Zuckerberg told investors that he’s “troubled” by the ongoing scrutiny of internet advertising.
“Now some also seem to wrongly assume that our business is dependent on a few large advertisers. Now, while we value every single one of the businesses that use our platforms, the biggest part of our business is serving small businesses. Our advertising is one of the most effective tools that small businesses have to find customers, to grow their businesses, and to create jobs. And that’s why I am often troubled by the calls to go after internet advertising, especially during a time of such economic turmoil like we face today with COVID,” he said on a call to investors.
Facebook’s revenue for Q2 2020 (Click to enlarge)
“It’s true that making it more difficult to target ads would affect the revenue of companies like Facebook, but the much bigger cost of such a move would be to reduce the effectiveness of the ads and opportunities for small businesses to grow. This would reduce opportunities for small businesses so much that it would probably be felt at a macroeconomic level. And is that really what policymakers want in the middle of a pandemic and recession? The right path, I believe, is regulation that keeps people’s data safe while allowing the benefits of this kind of personalised and relevant advertising.”
Total revenue for the quarter was US$18.687m. For the six months to 30 June, 2020, revenue was US$36.423bn, up 13.95% from 2019’s H1 figure of US$31.963bn.
The company spent US$2.840bn on marketing and sales in the quarter and US$5.627bn across Q1 and Q2.
Chief operating officer Sheryl Sandberg said more than 9m advertisers now use the platform.
Facebook’s daily active users (Click to enlarge)
The platform now has 1.785bn daily active users, up from 1.734bn last quarter.
Average revenue per users is now US$7.05 across the world, up from last quarter’s US$6.95, but not as high as Q4 in 2019 when it was US$8.52. Average revenue per user is highest in the US and Canada, where for Q2 it sat at US$36.49.
Average revenue per user on Facebook (Click to enlarge)
Beyond being an advertising platform for small businesses, Zuckerberg contended that Facebook’s role in consumers’ lives the pandemic was crucial.
“In many ways, amid this very difficult period for people around the world, our services are more important now than ever before. It’s worth reflecting on this for a moment, because there’s [a] fundamental difference between how the vast majority of people actually experience our services and the impression you’d get if you just read much of the commentary about Facebook,” he said.
“Imagine going through this pandemic two decades ago, when the Internet was nascent. Facebook didn’t even exist. Sheltering in place is incredibly disruptive now, but until recently, it would have meant almost no connection with your friends in the broader economy. Most of the small businesses whose storefronts had to close would have gone under, and there wouldn’t have been another infrastructure like the Internet that they can move quickly to in order to stay afloat. People sharing their day-to-day experiences with friends, communicating in groups with people who share interests and watching entertaining content, buying and selling things, this is how the vast majority of people use our services.”
Zuckerberg also said that despite media reports and ongoing public perceptions, politics, news, misinformation and hate is not crucial to the Facebook platform.
“And let me be clear. It’s not. These make up a small part of the content on our services, although they are all things that people generally tell us they’d like to see even less of. We do not profit from misinformation or hate. We do not want this content on our platforms. People come to our services to connect with the people they care about. That’s why people are using our services at record levels now, and enabling more of those meaningful social interactions is how we succeed. And we have a plan to further reduce the amount of harmful content,” he said in his address.
Facebook’s financials (Click to enlarge)
Despite apparently not relying on politics, Zuckerberg did say Facebook’s goal was to help people register to vote in the upcoming US election “regardless of what these candidates are posting or saying”.
“We’re also continuing to focus on stopping election interference, including removing voter suppression. We’ve already broadened our policies here and adopted new policies to partner with local election officials to remove false information about voting in the period leading up to the elections, and we are currently considering additional steps that we might take,” he said.
The rest of 2020, Zuckerberg said, remains unclear.
“Looking forward, I expect the rest of this year to continue to be unpredictable,” he said.
