2021 was a tumultuous year, so investors and digital marketers were keen to hear the results of the advertising giants, Google, and Facebook. Both Google and Facebook posted record earnings for the year but the evolving landscape of online privacy, FCC rulings, and name changes are possible challengers to this success in the future.
Google Ads Revenue
Google’s parent company, Alphabet, released its earnings in early February of this year. For the fiscal year 2021, the company saw an increase of 41% in revenue, $257.6 billion compared to $182.5 billion in FY 2020.
When looking at Alphabet’s various businesses, all saw increases for the year. Total advertising revenue for Google brought it 61.2 billion and grew by 42.5% compared to last year. Total Google advertising consists of Google search and other, YouTube advertising, and its Google Network which makes up 82% of Alphabet’s total revenue.
These increases show the superpower that Alphabet, and Google have created in the advertising realm and the want for advertisers to invest in their platforms. Recently, Google announced a multi-year initiative to build Privacy Sandbox, which offers users of Android devices more privacy and limits sharing of user data. In the coming years, it will be critical to watch how these changes will play out to advertisers but also to Alphabet’s advertising revenue.
Facebook Advertising Revenue
Facebook, now known as Meta, also saw increases in its advertising revenue. Their quarterly report saw the company bring in $117.9 billion in revenue with most of it coming from advertising. This quarter also saw declines in users for the first time in Facebook’s history.
For this quarter, Meta supplied a detailed looked at their advertising revenue split, a first for the company. Facebook saw its advertising revenue increase 15% compared to the previous quarter. Meta’s family of apps revenue also saw an increase of 15% compared to 2021 Q3 numbers. Meta described their family of apps as the total revenue across all their applications, Facebook, Messenger, Instagram, and WhatsApp.
As it looks to evolve and experiment with new digital platforms, we’re sure that advertising will continue to play a vital role. While Meta boasts about their Family of Apps, they are currently preparing for an FTC anti-trust case that looks to challenge their acquisitions. This quarter also saw, for the first time in its history, daily active users declined on Facebook resulting in a loss of a million active users.
As Meta continues to be in the news, monitoring possible challenges and opportunities on their multiple platforms is beneficial for a successful advertising strategy.
Why We Care
The media headlines may show a bleak future for Google and Facebook, but the reality is that their revenue continues to increase. In North America, this is even more apparent as it is a significant spender on their platforms. Their successes won’t be diminishing any time soon.
While Facebook might be seeing stagnant growth, it still holds a significant market share compared to most other platforms, worldwide. Their role in reaching your customers and communicating with them through organic and paid is hard to replicate on other platforms.
Both companies saw their advertising revenues increase which is great news for their investors. It usually translates to higher costs for advertisers and possibly more competition. It’s clear that changes are on the horizon for digital advertising and the companies that use it. You need a marketing team that understands these trends, is up to date on the latest changes, and has an agile strategy to address them when they arise.