Report Overview

Facebook doubles down on advertising

After the most challenging period in its history since 2012, Facebook has been able to stabilise its fundamental metrics and announce a major product overhaul

Despite talk of a business model pivot, Facebook’s focus remains on advertising, whose growth will remain concentrated in developed markets

News publishers wishing to stay relevant on the upgraded product set need to target exclusive layers of social interaction, with groups particularly important

Contents

Bringing the Facebook family closer together

• The town square, the living room, and the space between
• How will users react?
• The problems of being on notice

Implications for Facebook’s core business

• Overcoming the valley of death
• International growth won’t be enough
• New sources of ad revenue: Stories, video, classifieds and A2P

Few signs of growth outside advertising

• Payments… or yet more advertising?
• Promising but early steps in niche hardware

More bad news for news

List of charts/tables

Figure 1. Illustration of the new vision for the Facebook product family

Figure 2. YoY change of Facebook’s ad metrics (%)

Figure 3. Indexed Facebook advertising metrics, Q4 2015 values=1

Figure 4. Facebook market saturation by region in 2018

Figure 5. An optimistic scenario for Facebook ad revenue growth

Figure 6. Payments & Other as % of FB revenue, 12 month trailing avg.

Figure 7. Top personal finance services by mobile app reach* (%)

Figure 8. Share of US publisher referral traffic by platform* (%)