Facebook Continues to Grow, Steadily Adding New Revenue Streams - eMarketer

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Facebook Continues to Grow, Steadily Adding New Revenue Streams

This year, 162.9 million Americans will log on to Facebook at least once a month

April 26, 2016

eMarketer expects 2016 to be the last year of double-digit growth in the user base of the world’s largest social network, as the population of Facebook reaches 1.43 billion monthly users by the end of the year.

Facebook Users Worldwide, 2014-2020 (billions and % change)

That means if Facebook, which is reporting its earnings later this week, were a country, it would be one of the largest in the world. And it’s only getting bigger, with eMarketer projecting a monthly user base of 1.87 billion by 2020, the end of our forecast period.

In 2016, 162.9 million Americans will log on to Facebook at least once a month, along with more than half the UK population, or 33.2 million people. And its ad business is strong.

In the US, Facebook will capture $10.29 billion in display ad revenues in 2016, or a 31.2% share of total display ad spending in the US. In the UK, Facebook will capture £1.43 billion in display ad revenue in 2016, or a 32.1% share of display ad spending in the country. This is a 26.1% increase on last year.

Facebook Ad Revenues Worldwide, US vs. Non-US, 2014-2018 (billions and % of total)

And worldwide, Facebook is the No. 2 ad publisher behind Google. eMarketer estimates Facebook will earn $22.37 billion in ad revenues this year, more than half of which will come from non-US advertisers.

In 2016, mobile will account for 82.0% of Facebook’s US digital ad revenue this year. Ad revenues generated by Instagram and mobile video formats on Facebook will drive this growth. This year, Instagram is expected to earn $1.30 billion in the US ($1.53 billion worldwide) in mobile ad revenues. In the US, Instagram will represent 15.4% of Facebook’s total mobile ad revenues.

eMarketer principal analyst Debra Aho Williamson commented, “Facebook just keeps getting stronger and stronger every quarter. Its share of digital advertising is continuing to grow, and it is steadily adding new revenue streams. Facebook video is growing in importance for marketers. Two years after Facebook rolled out premium ads in the news feed, we see advertisers moving past the experimentation stage and beginning to craft advertising specifically for Facebook (rather than simply repurposing TV spots).”

Regarding Facebook Messenger, Instagram and Live Streaming, Aho Williamson added, “As we expected, Facebook is putting a lot of emphasis on Messenger this year, and the announcements at f8 earlier this month show that it is on a path toward monetizing that service.

“Instagram remains popular with advertisers, and the ad rollout appears to be going smoothly among Instagram users.

“Live streaming via Facebook Live will be a new revenue stream, likely later this year. We think this will be an interesting opportunity for Facebook, but there are many issues to sort out.”

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