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Guess how much Facebook's advertising revenue grew in 2016
Facebook has issued its 2016 annual report, covering all kinds of fun facts like the vast sums of money the company makes from serving ads at every available opportunity. You probably remember reports as recently as November about how Facebook’s investors were concerned over a slowdown in advertising revenue growth on the social platform. Well, the results are in and I’d like you to take a rough guess at what constitutes a worrying level of growth…
Before we get to the actual figure (because I know your eyes want to skim ahead), one of the other interesting parts of the report is how many daily active users the social platform now has. You may recall Facebook surpassed the one billion daily active user mark back in July 2016. The company added another quarter billion users to its daily user total by the end of the year.
Facebook’s daily active users grew by 18 percent year on year and by 23 percent on mobile (that’s 1.23 billion and 1.15 billion if you’re interested). Monthly active users since 2015 increased by 17 percent to 1.86 billion – that’s a quarter of the world’s population on Facebook each month. Monthly active mobile users grew to 1.74 billion, an increase of 21 percent. While all these figures are impressive, it’s clear that mobile is the way forward.
But let’s get back to that advertising revenue. Based on these staggering user numbers, it’s pretty obvious Facebook makes truckloads of cash from ads. In 2015, the company reported $17 billion in ad revenue. But guess how much that increased by in 2016?
The growth rate that had investors so worried just a few months ago was 57 percent. You read that right, there’s no decimal point missing. That level of insane growth pulled down an unimaginable $26.8 billion in ad revenue. That’s an additional $10 billion just from ads. In a year. Mobile ad revenue accounted for 84 percent of ad income in the final month of the year.
That kind of growth obviously means great things for shareholders, whose diluted earnings per share increased by 171 percent year-on-year. That’s a jump from $1.29 per share in 2015 to $3.49 in 2016. Likewise, Facebook’s net income increased by 177 percent to $10 billion, up from $3.7 billion last year. So the next time you read a story about Facebook investors having concerns, remember how nice it would be to share the kinds of concerns they suffer.