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Comparing Facebook’s Advertising Business with Peers’



Facebook’s ad business in 1Q18

In 1Q18, Facebook’s (FB) advertising revenue rose significantly, by 50% YoY (year-over-year) to $11.8 billion. Advertising revenue comprised ~98.6% of its the total revenue, which rose 49.0% YoY to ~$12.0 billion in 1Q18. Facebook’s advertising revenue grew faster than its overall revenue in 1Q18.

Like Facebook, rivals Twitter (TWTR), Snap (SNAP), Yelp (YELP), and Alphabet’s (GOOGL) Google also look to advertising sales for the majority of their revenue. In 1Q18, Facebook’s ad sales growth outpaced Google’s 24.4% YoY growth and Twitter’s 21%.

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Emphasis on mobile advertising

Facebook is making efforts to expand its mobile advertising, which now comprises 91% of its total advertising revenue. The company has been hiring to grow its mobile advertising business. Its total headcount increased 48% YoY to 27,742 in 1Q18.

Facebook grilled by lawmakers

Facebook, along with Twitter and Google, entered the spotlight last year amid claims that its platform was used by Russian groups to influence the outcome of the US presidential election. UK lawmakers grilled the three companies in connection with hate speech and extremist content being posted on their platforms.

Facebook became entangled in a data leak scandal after it was revealed that Cambridge Analytica had collected personal information from as many as 87 million Facebook users without their permission. The European Union is cracking down on data practices and will soon be applying the General Data Protection Regulation, which will affect ad-revenue-driven Facebook, Twitter, and Google.


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