MUMBAI: Last year saw Mark Zuckerberg-led social media giant Facebook entangled in a number of controversies, especially its privacy policies with the biggest being the Cambridge Analytica scandal. Despite all the negative press throughout the year, the FAANG company has reported strong financial gain in Q4 beating revenue and earnings per share estimations. Daily active users on the social media platform reached 1.52 billion led by growth in India, Indonesia and the Philippines.
Facebook reported 16.91 billion revenue against the estimate of 16.39 billion and $2.38 EPS against $2.18 consensus estimate. The key contributor to revenue definitely remains advertising with $16.64 billion. As the company reported, the year-on-year growth for total revenue as well as ad revenue was 30 per cent. North America, the domestic market of the platform alone brought in $8.25 billion. Notably, the ad revenue growth was strongest at 34 per cent in Asia-Pacific region.
The number of active users was also slightly higher than the expectations. Facebook reported 2.32 billion monthly active users and 1.52 billion daily active users with a 9 per cent year-on-year growth. Mobile advertising revenue represented approximately 93 per cent of advertising revenue for the fourth quarter of 2018, up from approximately 89 per cent of advertising revenue in the fourth quarter of 2017. The platform now has over 7 million active users across all its services.
“In Q4, the average price per ad decreased 2 per cent and the number of ad impressions served on our services increased 34 per cent. Impression growth was primarily driven by ads on Instagram – including both feed & stories – as well as Facebook mobile news feed. The year-over-year decline in average price per ad reflects an ongoing mix shift towards product surfaces and geographies that monetise at lower rates,” Facebook CFO David Wehner said in a statement.
Recently, Facebook has started focusing highly on stories across all its properties. Facebook COO Sheryl Sandberg said that 2 million advertisers are using stories to reach customers across their family of apps. In the last quarter, the company launched ads in messenger stories too.
As per the company presentation, daily active user grew in every region including in Europe. While monthly active users stayed flat in North America, it grew in every other region especially in Asia Pacific. The presentation says average revenue per user (ARPU) also grew to $7.37 billion from $6.09 billion in the third quarter.
The numbers clearly that indicate advertisers have not lost interest in the social media engine despite all the data privacy scandals. Even backlash from governments across the world didn't affect its value much for advertisers.
"Our community and business continue to grow," Facebook founder and CEO Mark Zuckerberg said. "We've fundamentally changed how we run our company to focus on the biggest social issues, and we're investing more to build new and inspiring ways for people to connect."
With an attempt to focus more on videos, Facebook Watch entered global markets. Zuckerberg expects 2019 to be the year where Watch becomes more mainstream. “There are now 400 million people who use it every month, and people spend on average over 20 minutes on Watch daily. This means we're finding ways for video to grow outside of news feed so it doesn't displace the social interactions that people primarily come to our services for,” he added.
