Recently, the social platform Facebook released its fourth quarter 2020 revenue report. The report shows that Facebook’s profit in the fourth quarter of 2020 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 $86 billion, of which advertising business revenue increased by 21% to $84.2 billion, indicating that most of Facebook’s revenue came from selling advertising space.
Marketers increased advertising spending on social networks such as Instagram, especially during the holidays, attracting consumers to shop, which is the main reason for its revenue growth.
In addition to the continued growth in advertising revenue, Facebook’s other business revenue, including the Oculus virtual reality (VR) department and the Facebook sub-ad market, also increased significantly, increasing by 156% in the fourth quarter of 2020 compared with last year to $885 million.
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%; daily active users were 1.84 billion, a year-on-year increase of 11%. The number of users of Facebook apps, including Instagram, WhatsApp and Messenger, grew 10% to 2.6 billion in the fourth quarter of 2020.
The global pandemic has undoubtedly boosted Facebook’s growth. Facebook highlighted two major economic trends that have driven its revenue this year, namely the continued shift from physical retail to online e-commerce and the shift in consumer demand from services to products. However, if any of these trends weaken or reverse, it will become an obstacle to Facebook’s advertising revenue.
Although Facebook performed well in 2020, the company remains cautious about its performance growth in 2021 and expects Facebook to face greater “advertising headwinds” in 2021.