Facebook Announces a Strong Revenue Result, But Daily Active Usage in Key Markets is Plateauing

Facebook has released its most recent earnings figures, which indicate consistent overall improvements in both users and income as the platform progresses to the next stage of development and becomes an even bigger part of our daily lives. Which, considering its influence in so many areas, may not be a good thing. However, Zuckerberg's social media is still growing, particularly in developing nations, despite some steadily mounting indicators of alarm when looking at the broader figures and remarks.

To begin with, in Q2, Facebook attracted 30 million new daily active users, bringing the total to 1.91 billion. Despite a slowdown, and even a reversal, in other markets, Facebook continued to acquire significantly more users in the Asia Pacific region in Q2. This could be a cause for concern. As you can see, Facebook's DAU count has completely frozen in the United States after decreasing in Q2 of last year, and it's also declining in Europe. This is especially problematic when you consider the platform's ARR per-user statistics.

While Facebook earns substantially more money in the United States and Europe than it does in other regions, a drop in usage in its most profitable markets could be a key factor to watch. At Facebook's size and scope, attracting 28 million new members is still a significant accomplishment. However, if these markets continue to fall, the firm may become more concerned - or, at the very least, attempt to accelerate its growth ambitions in other places to divert attention away from the platform's diminishing appeal in its most established markets.

Does this imply that individuals in Europe and the United States are increasingly abandoning Facebook in favor of alternative apps? I mean, overall usage of Facebook's apps, which includes Facebook, Messenger, Instagram, and WhatsApp, continues to rise. However, those figures aren't broken down by location, so Facebook's growth may have slowed in some markets, while unfavorable news articles about the platform's capacity to spread misinformation and hate speech may be scaring people away, which is another source of concern.

We don't have a specific metric for how much time people spend in the app; instead, we track aggregate daily and monthly usage (monthly Facebook users are now at 2.9 billion). However, it appears that there is some level of reduction here. In any case, Facebook's overall visibility is continually growing, which means its commercial potential is still growing. However, for advertisers, the slowdown in these large markets may be worth noting.

A 47 percent year-over-year rise in the average price per ad and a 6% increase in the number of ads served drove advertising revenue growth in the second quarter of 2021. During the rest of 2021, we expect advertising revenue growth to be predominantly driven by year-over-year advertising price increases, as it was in the second quarter.

Another factor to consider is that Facebook ad rates are increasing, so even while the number of daily active users on the platform is stagnating, the company is charging more for ads. Of course, demand is driving this, but there are several significant elements to observe for marketers in the headline growth data. It's not just about Facebook's desire to project the largest possible audience. In terms of revenue, Facebook earned $29 billion in the third quarter, a new high for the firm.

Advertising is its primary source of revenue, accounting for more than 98 percent of total revenue, but it continues to enjoy stable income from its 'Other' bets.

Facebook has reportedly sold over 6 million Oculus VR devices, which, combined with sales of its Portal gadget, are helping to bolster its hardware elements, which will take another step forward with the debut of its AR glasses, the first of which is expected later this year. That's where Facebook is now aiming to go - because, while there's still plenty of room for growth, particularly in emerging markets, it needs to move on to the next great digital revolution to maximize its footprint and keep its following. This is where the Metaverse enters the picture.

Indeed, in his summary speech, Facebook CEO Mark Zuckerberg mentioned both its evolving creator tools and the Metaverse concept:

"I'm excited to see our major initiatives around creators and community, commerce, and building the next computing platform coming together to start to bring the vision of the metaverse to life."

The Metaverse is currently a bit of a hazy term, but the idea is that individuals will soon be able to communicate and engage in an expanding number of ways using digital representations of themselves in virtual surroundings. That could be through virtual reality, which Facebook is already working on, but it could also be through more basic examples such as your presence in games, digital clothing items that your avatars can wear, immersive AR applications that layer a new reality over the world, and online co-working, which simulates real-world interaction.

In an interview with The Verge, Zuckerberg highlighted that the metaverse is a vision that encompasses numerous firms - the entire industry. You can conceive of it as the mobile internet's replacement. You might conceive of the metaverse as an embodied internet, where you are part of the content rather than just seeing it. And you feel as if you're in different places with other people, experiencing different experiences that you wouldn't be able to have on a 2D app or webpage.

As Zuckerberg points out, this corresponds with many of the same topics that Facebook has been working on for years, thus the company is now considering adopting the Metaverse notion as a whole-of-Facebook concept, which may help tie the company's numerous components together. This might also help Facebook escape more stringent regulatory action, such as severing the business into parts. If it's all part of a larger Metaverse, all of the pieces will interact, and Facebook will become the umbrella that covers everything. That's probably why Facebook wants to integrate its messaging apps, and while the Metaverse is a completely different notion, it may help Facebook become a single, all-consuming tech behemoth.

But it's still a long way off - and while Facebook has formed a working group to help it get there, it's still a social media corporation that's trying to strengthen links in a variety of ways to boost engagement, fend off competition, and make its platforms a more important utility in many locations.

Overall, the figures demonstrate that it is still performing in this area, and the fact that user counts are still increasing after 17 years is a huge accomplishment in and of itself. However, there are a few critical marketing factors worth noting that may be hidden under the large income outcome.