Facebook's advertising revenue increased 21% year-on-year in 2020 to $84.2 billion

Recently, social media giant Facebook released its revenue report for the fourth quarter of 2020. The report shows that in the fourth quarter of 2020, Facebook 's profit increased by 53% to a record $11.2 billion; revenue increased by 33% to approximately $28.1 billion.

At the same time, Facebook 's total revenue in 2020 increased by 22% year-on-year to US$86 billion, of which advertising revenue increased by 21% to US$84.2 billion. This shows that most of Facebook 's revenue comes from selling advertising space.

Facebook’s strong revenue growth suggests marketers are increasing ad spending on social networks like Instagram , especially during the holiday season, to lure consumers into stores.

In addition to the continued growth in advertising revenue, Facebook's "other" business revenue , including the Oculus virtual reality (VR) division and the Facebook classified advertising marketplace, also grew significantly, increasing 156% year-on-year to US$885 million in the fourth quarter of 2020.

In terms of user data, Facebook 's monthly active users ( MAU ) in the fourth quarter were 2.8 billion, a year-on-year increase of 12%; the number of daily active users was 1.84 billion, a year-on-year increase of 11%. The number of users of Facebook's applications including Instagram , WhatsApp , and Messenger increased by 10% in the fourth quarter of 2020 to 2.6 billion.

The pandemic has undoubtedly helped Facebook 's growth. Facebook highlighted two major economic trends that have boosted its revenue this year: the continued shift from physical retail to online commerce and the shift in consumer demand from services to products. But if any of these trends weaken or reverse, it will become an obstacle to Facebook's advertising revenue.

Therefore, although Facebook 's data performed well in 2020, the company remains cautious about its performance development in 2021 and expects that Facebook will face greater "advertising headwinds" in 2021.

Facebook said that "advertising headwinds" may also come from the impact of Apple's new IDFA (advertiser identifier) ​​rules and evolving privacy policies. The IDFA identifier can be used to track Apple users' online activities and serve personalized ads based on this.

Facebook expects the changes to Apple's IDFA terms to begin taking effect at the end of the first quarter. After the Apple system is updated, when an application requests access to the company's built-in IDFA permissions in its devices, Apple users will receive a pop-up box to choose whether to allow the merchant to use the permission. Apple said it took this step to respect user privacy.

However, if you want to know whether Facebook ’s subsequent advertising revenue and the traffic channels of small and medium-sized sellers will be greatly affected, you may have to wait until Apple’s iOS14 update is officially launched to find out.

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