wordpress blog stats
Connect with us

Hi, what are you looking for?

Facebook expects ‘significant’ hurdles over ad targeting, competition from Apple, regulatory changes

Facebook’s advertising revenue and net income increased 31% YoY and 53% YoY, respectively in the quarter ended December 31, 2020. But the company expects “significant ad targeting headwinds” in 2021, including from the impact iOS 14 and “evolving regulatory landscape”, including “continuing uncertainty” around viability of transatlantic data transfers in Europe.

The company will also stop recommending political and civic groups to users globally and reduce the amount of political content on the News Feed.

Facebook believes it benefited from the shift to online commerce and the shift in consumer demand towards products from services, providing a tailwind to the advertising business in second half of 2020.

Active users increase by over 10%

  • Daily Active Users: 1.84 billion, up 11% YoY
  • Monthly Active Users: 2.8 billion, up 12% YoY
  • Family Daily Active People: 2.60 billion in December 2020, increasing 14% YoY

Facebook will stop recommending civic, political groups globally

Facebook will permanently stop recommending civic and political groups globally, something it had implemented in the US ahead of the 2020 Presidential Elections. Zuckerberg said that even though the company removed a million groups in 2020 alone, there are still many groups that “we may not want to encourage people to join”, even if they don’t violate the platform’s policies.

“To be clear, this is a continuation of work we’ve been doing for a while to turn down the temperature and discourage divisive conversations and communities.” — Mark Zuckerberg, Facebook CEO

The share of civic and political content is a “small minority of content” and unlike to serve as a headwind; the share of revenue from political ads is in single digits even in an active political quarter. Along with this, Facebook said it is considering steps to reduce the amount of political content in News Feed, based on feedback that “people don’t want politics and fighting to take over their experience” of Facebook’s service.

WhatsApp’s privacy features clearly superior over iMessage: Zuckerberg

Given the recent backlash against WhatsApp privacy policy changes, it’s not surprising that Zuckerberg addressed it. He reiterated that conversations are end-to-end encrypted, but also said that reducing spam matters too, for which the company has to maintain a minimum amount of metadata to build tools to stop bad actors.

Advertisement. Scroll to continue reading.

“We have a lot of competitors who make claims about privacy that are often misleading. Apple recently released so-called nutrition labels which focus largely on metadata that apps collect rather than the privacy and security of people’s actual messages. But iMessage stores non-end-to-end encrypted backups of your messages by default unless you disable iCloud, so Apple and governments have the ability to access most people’s messages. So when it comes to what matters most — protecting people’s messages, I think that WhatsApp is clearly superior.” — Mark Zuckerberg, Facebook CEO

Business messages will only be hosted on Facebook infrastructure should the business choose to do so. Facebook is giving everyone the time to understand what it means by pushing the date forward, he added.

Facebook increasingly sees Apple as one of its “biggest competitors”

Facebook increasingly sees Apple as one of its “biggest competitors”, Zuckerberg said. Facebook has been attacking Apple’s upcoming privacy changes, which will require app developers to ask users for permission in order to use their IDFA — identifiers for ad targeting — by repeatedly maneuvering the focus to impact on small businesses.

The chief executive said iMessage’s dominance in the US can be credited to Apple bundling the app on every device, and giving the app certain advantages that other apps don’t have.

“iMessage is a key linchpin of their ecosystem. It comes pre-installed on every iPhone and they’ve preferenced it with private APIs and permissions, which is why iMessage is the most used messaging service in the US. And now, we’re also seeing Apple’s business depend more and more on gaining share in apps and services against us and other developers. Apple has every incentive to use their dominant platform position to interfere with how our apps and other apps work, which they regularly do to preference their own.” — Mark Zuckerberg, Facebook CEO

Coupled with the iOS 14 updates, Apple’s policies will impact millions of businesses who will not be able to reach customers with targeted ads. The iOS update is a clear move by Apple to track its competitive interests and Facebook and others will be up against this dynamic for the “foreseeable future”.

iOS 14 will be a headwind factor in the ads business. Impact could begin later in Q1, but the timing is uncertain and Apple has not been clear, said chief finance executive David Wehner. Facebook does expect high opt-out rates from iOS 14 as more and more Apple users update their devices.

Apart from the iOS 14 and IDFA changes, Apple presents competition to Facebook in messaging and possibly in building the next computing platform, said Zuckerberg.

Advertisement. Scroll to continue reading.

Clearer rules on moderation needed, Section 230 changes should be thought through: Zuckerberg

Zuckerberg has been vocal about the US government amending (rather considering amendments) to Section 230 of the Communications Decency Act, a provision instrumental to the internet’s functioning and to companies such as Facebook and Twitter.

When asked about the case by the Federal Trades Commission against Facebook and broader regulatory environment, Zuckerberg called for “clearer rules and expectations” on content moderation when it comes to elections. He maintains that private companies such as his should not be responsible for balancing the “trade-offs” between privacy, safety, and social equities. “Congress does need to update Section 230 to make sure its working the way people intended”, but “any changes should be thought through very carefully”.

So I think that any changes should be thought through very carefully. And should be thought through not just from the perspective of what a larger company like Facebook or Google or Twitter could handle in terms of updating their content moderation policies, but also from the perspective of making sure that new companies can continue to emerge.

Back in 2018, we supported a change to prevent sex trafficking. And we’ll support similar efforts to tackle harms like child exploitation imagery and material and opioids. And we’ll also support any push to make content moderation systems more transparent. The details on all this, of course, matter, but we hope to be able to work with the new Congress on this.

Mark Zuckerberg, Facebook CEO

Financial Snapshot

  • Total Revenue: $28 billion, up 33% YoY
  • Net income: $11.2 billion, up 53% YoY
  • Advertising revenue: $27.1 billion, up 31% YoY driven by strong holiday shopping season for retail, which benefited from the shift to online commerce

Ad revenue was strongest in Europe which grew 35% and benefited from currency tailwinds. US & Canada grew 31%, and Asia-Pacific grew 29%. Rest of World growth improved to 25% but continues to be significantly impacted by currency headwinds.

Ad impressions served across the services increased 25%, driven by Facebook and Instagram. Average price per ad increased 5% in the quarter, driven primarily by Facebook mobile feed and pricing improvement in Instagram Stories.

While the company is pleased with the early data on consumption on its TikTok-esque short-video service Reels, there is “more work needed” to make creating and discovering content easier, COO Sheryl Sandberg said. Reels is now in 50 countries and monetising tools such as branded content tags and shopping have been launched.

Advertisement. Scroll to continue reading.

Earnings Call Transcript | Release | Presentation 

Also read:

Written By

I cover health, policy issues such as intermediary liability, data governance, internet shutdowns, and more. Hit me up for tips.

MediaNama’s mission is to help build a digital ecosystem which is open, fair, global and competitive.



While the market reality of popular crypto-assets like Bitcoin may undergo little change, the same can't be said for stablecoins.


Bringing transactions related to crypto-assets within the tax net could make matters less fuzzy.


Loopholes in FEMA and the decentralised nature of crypto-assets point to a need for effective regulations.


The need of the hour is for lawmakers to understand the systems that are amplifying harmful content.


For drone delivery to become a reality, a permissive regulatory regime is a prerequisite.

You May Also Like


Google has released a Google Travel Trends Report which states that branded budget hotel search queries grew 179% year over year (YOY) in India, in...


135 job openings in over 60 companies are listed at our free Digital and Mobile Job Board: If you’re looking for a job, or...


Rajesh Kumar* doesn’t have many enemies in life. But, Uber, for which he drives a cab everyday, is starting to look like one, he...


By Aroon Deep and Aditya Chunduru You’re reading it here first: Twitter has complied with government requests to censor 52 tweets that mostly criticised...

MediaNama is the premier source of information and analysis on Technology Policy in India. More about MediaNama, and contact information, here.

© 2008-2021 Mixed Bag Media Pvt. Ltd. Developed By PixelVJ

Subscribe to our daily newsletter
Your email address:*
Please enter all required fields Click to hide
Correct invalid entries Click to hide

© 2008-2021 Mixed Bag Media Pvt. Ltd. Developed By PixelVJ